Caspian Sunrise agrees first major hire of Explorer rig

7th Mar 2023 16:47

(Sharecast News) - Caspian Sunrise announced the signing a contract chartering the Caspian Explorer, its bespoke drilling vessel, to the Isatay Operating Company on Tuesday, for a well set to be drilled in summer 2024.

The AIM-traded company said the well would be drilled to a planned depth of 2,500 metres in the shallow northern Caspian Sea.

Italy's ENI is a leading participant in the Kazakh-registered explorer.

The Caspian Explorer is the only drilling vessel of its kind currently operating in the shallow northern Caspian Sea, and is capable of drilling to depths of 6,000 metres from shallow water.

It operates primarily between May and November when the northern Caspian Sea is not subject to winter ice, in water depths between 2.5 and 7.5 metres.

The total amount to be paid under the contract would depend on the number of drilling days, but it was expected to result in a net income of around $15m spread over the life of the contract.

If the well is successful, the contract provides for a second well to be drilled on similar terms to the first.

Caspian said it is in discussions with potential hirers for other charters of the Caspian Explorer.

On the financial front, the firm had now four monthly dividends of £1m, and said it was now moving to quarterly dividend payments to bring it closer in line with other dividend-paying companies and allow for better management of significant receipts and payments.

The next dividend announcement was expected to be made with its 2022 audited accounts in May, with payment expected in June.

Caspian said the dividend declared on 20 February remained due to be paid on 23 March.

"We are naturally delighted to have signed the first major drilling contract for the Caspian Explorer," said chairman Clive Carver.

"This is a significant separate source of funding for the group and demonstrates the potential value of this unique asset.

"The funds generated are planned to be used to fund the group's further development."

At 1624 GMT, shares in Caspian Sunrise were down 13.81% at 6.68p.

Reporting by Josh White for Sharecast.com.