14 May 2024

Caspian Sunrise PLC

("Caspian Sunrise", the "Group" or the "Company")

Proposed Sale of the BNG shallow structures for $83 million

Introduction

The Board of Caspian Sunrise is pleased to announce it has entered into an agreement to grant exclusivity to Absolute Resources LLP ("Absolute Resources") a Kazakh registered company, in connection with the proposed conditional sale of the MJF and South Yelemes structures at the BNG Contract Area for a consideration of $83 million ("Proposed Disposal").

The exclusivity period extends to 8 August 2024. Caspian Sunrise and Absolute Resources intend to move quickly to a conditional sale and purchase agreement ("SPA") incorporating the key commercial principles set out in the exclusivity agreement, which would be subject to regulatory and shareholder consent. Until a binding agreement has been entered into and its conditions been met there can be no certainty a sale will complete.

Under the proposed terms set out in the exclusivity agreement, the Group would continue to hold the licences for what the Board considers to be the much more valuable deep structures at the BNG Contract Area.

Commercial rationale

The Board believes that the Group has a competitive advantage in the identification and acquisition of new projects in Kazakhstan, which it does not necessarily have to the same degree in the day to day operation of maturing assets.

Also, with production expected from both Block 8 and West Shalva later this year, the Board believes that now is a good time to consider offers on the shallow structures at the BNG Contract Area.

Accordingly, in the opinion of the Board, the funds released from the sale of the MJF and South Yelemes structures could be better utilised elsewhere to enhance longer term shareholder value.

Background

Caspian Sunrise owns 99% of BNG Ltd LLP, the Kazakh entity which holds all the licences issued to develop both the shallow and deep structures at the BNG Contract Area. BNG Ltd LLP has granted Absolute Resources an exclusivity period up to 8 August 2024 to conclude its due diligence in connection with its proposed acquisition of a new corporate entity which would hold the licences for the shallow MJF and South Yelemes structures on the BNG Contract Area.

The MJF structure is the principal shallow structure on the BNG Contract Area. Since first oil in 2016 it has produced more than 4 million barrels, thereby providing the bulk of the funding for the development of the rest of the Group.

In 2023 the MJF structure produced 576,368 barrels of oil at an average of 1,579 bopd representing approximately 87% of total production from the BNG Contract Area. MJF production is currently approximately 1,350 bopd.

The first wells were drilled on the South Yelemes structure during the Soviet era, with test production commencing in 1994.

The South Yelemes structure has four operational wells from which in 2023 approximately 88,746 barrels were produced at an average of 243 bopd representing approximately 13% of total production from the BNG Contract Area. The recent focus at South Yelemes has been preparation for and drilling of horizontal side tracks from the existing wells, targeting the shallow dolomite intervals. South Yelemes production is currently approximately 250 bopd.

Proposed disposal terms

The exclusivity agreement sets out that Absolute Resources would acquire a new entity to be established to own the licences for the MJF and South Yelemes structures. This new entity would not include Airshagyl and Yelemes Deep the two deep structures at the BNG Contract Area.

The headline consideration less the amount then outstanding for the assessed Historic Costs (which are currently approximately $17 million but would be expected to be nearer $15 million by the likely date of completion) would be payable in cash, on satisfaction of all the SPA conditions with Absolute Resources assuming responsibility for the payment of the balance of the assessed Historic Costs then due. On completion Absolute Resources would become the operator at the MJF and South Yelemes structures.

The Company has received a $1 million deposit from Absolute Resources in respect of the exclusivity agreement.

AIM Rules and other Regulatory conditions

Under the AIM Rules for Companies the proposed disposal would require the approval of Caspian Sunrise shareholders. Following the signing of a conditional SPA the Company would therefore need to convene a general meeting for shareholders to consider and, if thought fit, approve the proposed disposal.

Completion would then also be dependent on the receipt of all appropriate regulatory and tax consents in Kazakhstan, the UAE and the UK.

Comment

Clive Carver, Chairman said

"There is a price at which even the best performing asset is better sold.

With production expected from both Block 8 and West Shalva later this year, we believe now is a good time to consider disposing of the maturing shallow structures at the BNG Contract Area.

The Group's skills are the identification and acquisition of undervalued assets and knowing when to let them go, rather than necessarily being conventional operators of maturing fields.

While the MJF structure has plenty of oil still to be produced it has reached a stage of maturity where maintaining production levels may well take an increasing amount of time, effort and funding.

In summary, while we remain proud owners of the BNG shallow structures, we recognise that the funds released from the sale of the MJF and South Yelemes structures may be better used in other projects to increase shareholder value."

Contacts:

Caspian Sunrise PLC

WH Ireland, Nominated Adviser & Broker

Qualified person

Mr. Assylbek Umbetov, a member of the Association of Petroleum Engineers, has reviewed and approved the technical disclosures in this announcement.

This announcement has been posted to:

www.caspiansunrise.com/investors

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.