Company Information for Caspian Oil & Gas Limited

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Company Statement

Caspian Oil & Gas Limited has a strategic acreage position in the historic and oil rich Fergana Basin in the Kyrgyz Republic, located in a one of the world's major oil provinces which stretches from the Caspian Sea to the Tarim Basin in China.

There are two separate facets to Caspian’s Kyrgyz operations. Caspian operates its 650hp drilling rig to explore and appraise prospects in its own right and in joint venture with other players, while Australian oil and gas major Santos is conducting a seismic program across seven of Caspian’s leases under a separate farm-in arrangement  to assess the potential for large structures at depth.

Santos is in the second of a three stage US$24 million farmin to earn an 80% interest in all of the licences, excluding the shallow production potential down to 1,000m depth on the northern Fergana licences of Charvak, Ashvaz, East Mailisu and West Mailisu.

Caspian already produces oil from some of these shallow leases, though currently in limited quantities. Caspian has a regional headquarters in Bishkek, the capital of the Kyrgyz Republic, and operational offices in Mailisu. It currently employs either directly or indirectly over 100 people.

Caspian holds a 70% interest in a company owning the Mailisu III oilfield under another joint venture agreement, with the Kyrgyz Government oil company KNG.  Mailisu III is an existing oilfield and has produced about 700,000 bbls of oil to date. Existing production wells are excluded from the joint venture licence.  Caspian has discovered oil and confirmed the presence of gas from wells drilled in 2007 and 2008.

Caspian owns a drilling rig capable of drilling to around 2,500m  which in July 2009 is drilling wells in southern Kyrgyz Republic on a contract basis.

Focus -the Kyrgyz Republic

• Caspian’s licences cover a significant Fergana Basin acreage position
• The Fergana Basin - intermontainebasin with up to 8km of sediment
  
  - prolific oil province > 1 billion barrels of oil and 1.7 TCF gas ultimate recovery
  - first production in 1901, more than 60 oilfields
  - under-explored by modern techniques
  - 250 million barrel Minbulakfield highlights the potential for substantial new discoveries

2009 plans

• Seismic by farm-in partner testing for deeper drilling targets
• Shallow drilling with contract and own rig –northern Fergana leases
• Production optimisation from Mailisu and Charvak wells
• Seeking contract work or drill for equity proposals for Caspian’s rig

Operations and Technology

Caspian holds a large acreage position around the Fergana Basin in the Kyrgyz Republic.  There are numerous oilfields in the Fergana Basin, the earliest of which began producing oil in the early 1900s.

A re-interpretation of Soviet era seismic has led to the identification of a number of previously untested targets on Caspian's licence areas, and on-ground exploration has confirmed the presence of oil, reservoir rocks and structures in areas previously untested by seismic.  Santos is completing an extensive seismic program in the 2nd half of 2009.

Mailisu III Project

Separate from the joint venture with Santos, Caspian has acquired a 70% interest in the Mailisu III oilfield under a joint venture with the Kyrgyz Government's oil company, KNG.

Caspian has completed four exploration wells on Mailisu III and encountered oil in each well from shallow Palaeogene limestone beds, with modest flow rates to date.  Further assessment work is required before the possibility of using production enhancement techniques is assessed.  One of Caspian's wells confirmed the presence of gas in a partially depleted gas field below the shallower oil horizons.
Mailisu III adjoins the southern boundary of Caspian's Ashvaz exploration licence.

Charvak Project

Caspian has three wells at Charvak capable of producing small amounts of oil from the limestone Bed V (of Tertiary age) at depths of between 93m and 178m. The existence of oil in shallow sandstone and conglomerate reservoirs has been established by exploration drilling. 

Deeper and larger prospects have been identified and a seismic survey, in progress in mid-2009, as part of Santos' farmin programme should better define these structures.

The 744 sq km Charvak licence surrounds three small excised oil and gas fields:

• Changyrtash - (9 sq km excision) recoverable 13.0 million barrels (MMbbl) of oil, production to date 11.8MMbbl of oil;
• Chigirchik - (4 sq km excision) recoverable 27.6 MMbbl oil, 2.0 billion cubic feet (Bcf) of gas; and
• Suzak - (3 sq km excision) 171.9 Bcf gas.

In the productive Changytrash Field, oil is found at shallow depths (300-800m) in two pay zones within the Paleogene: Bed III (sandstone) and Bed V (limestone).

Mailisu Project

The Mailasu project consists of the Ashvaz and adjoining East Mailisu and West Mailisu licence areas.  Test production of up to 50 barrels of oil per day has been achieved from relatively shallow limestone reservoirs found within the adjoining Mailisu III licence area.

To this day, oil continues to naturally seep from limestone reservoirs into the Mailisu River and from early mine workings and diamond core holes drilled between 1939 and 1966.

The Ashvaz oilfield lies directly up-dip of the Mailisu IV, Mailisu III and Izbaskent oilfields. These fields produce from Paleogene reservoirs which are oil bearing within the Ashvaz exploration licence. The Mailisu and Izbaskent fields, which were discovered between 1948 and 1972, contained total reserves of 97.5 million barrels (MMbbl) of oil, 45.5 billion cubic feet (Bcf) of associated gas and 323.7Bcf of non-associated gas (all figures in terms of ultimate recovery USGS, 1994) prior to production.

The Mailisu-Izbaskent fields occur over anticlinal structures where oil accumulations occur within Paleogene fossiliferous and fractured limestones above the oil-water contact. The Ashvaz oil field is a monoclinal structure although some components of fault trapping are likely to influence the structure.

The Ashvaz field potentially has three reservoir zones of Paleogene age, beds (denoted as V, VIIa and VIIb), each of which are 7 to 15m thick, with porosity ranging between 3-30%. The porosity is primarily moldic and the reservoir is formed whent the shell fragment voids are connected. The Ashvaz field crude oil tested to date ranges from 21.47 degrees API to 30.21 degrees API.

Seismic shot over the East and West Mailisu blocks in mid-2009 is expected to be processed by September 2009.

Ak-Bura Project

The large Ak-Bura prospecting licence covers prospective beds from Silurian to Palaeogene in age. The prospective reservoir beds identified include the Permian, Middle Jurassic and Palaeogene beds that contain the pay zones within oil fields of the Fergana Basin and Silurian and Carboniferous beds which contain pay zones of oil fields within the Tarim Basin, located 200 km to the south-east in China. 
 
While the large Ak-Bura project is only partially mapped, a number of prospective structures have been identified.

Several large thrust-related structures have been identified on Ak-Bura by detailed mapping traverses and two covering 305sq km have been mapped in detail (Naukat and Aravan). All elements necessary to entrap oil were found in these two structures:

• source rocks with high C-organic content and highly porous reservoir rocks are outcropping on both sides of the structures; and
• live liquid oil in the pore system and bitumen crusts have been described, mapped or encountered in mineral exploration drilling in the overthrusted Palaeozoic rocks and along thrust faults
  The target Paleogene and Cretaceous beds consisting of thick, porous sandstone, conglomerate and limestone beds are situated at 1,500m to 2,500m from surface. The plays are essentially ready for seismic traverses followed by drilling.

Several other prospective areas have been located on the extensive licence area. Santos has carried out regional seismic at Ak-Bura in 2009 and the processed data should be available by September 2009.

Sulukta Project

Sulukta, in the far south-western corner of the Kyrgyz Republic, has numerous oil seeps, evidence of prospective structures and existing oilfields excised from the licence area. Several large prospects and leads have been identified have recently been covered by Santos' seismic programme.

The Sulukta permit is highlighted by analogue fields and discoveries to the north in Kyrgyzstan and Uzbekistan which help confirm that several attractive prospects are present in Sulukta. These include potential stacked reservoirs starting at depths of 1,500m, but typically 2,500m and deeper. Recent work has upgraded this block and several lower risk, medium sized prospects resemble adjacent existing oilfields.

Katran Project

The Katran licence covers approximately 25km strike of the southern flank of the Fergana Basin.  Although overthrust rocks prevent the use of surface mapping to identify targets, they remain prospective for oil.

Santos is undertaking seismic over targets on the Katran licence in mid-2008.

Drilling Rig: Caspian Rig

Caspian operates its own 650hp drilling rig in the Kyrgyz Republic.  The rig, which is capable of drilling to 2,500m, has been focussed on drilling shallower wells around the Mailisu III field in the northern Fergana Basin.

The Company is negotiating a farmin arrangement which would enable it to earn a share of production revenue by drilling a series of wells to 2,000m into projects on the southern edge of the Fergana Basin.

Geographical Spread

Board of Directors and Key Management

Directors
Reg Gillard	Chairman
Graeme Parsons	Executive Director, Chief Executive Officer
Colin Carson	Executive Director
Mike Sandy	Non-Executive Director
Juerg Walker	Non-Executive Director
Management
Graeme Parsons	Chief Executive Officer
Colin Carson	Finance director
Mike Sandy	New business development
Oleg Gaponenko	Kyrgyz country manager

Company Address 30 Ledgar Road Balcatta, Western Australia, Australia 6021 Telephone: +61 8 9240 2405 Facsimile: +61 8 9240 2406 Email: info[at]caspianogl.com Website: http://www.caspianogl.com

Additional Address/Key Contact

Capital Fully paid ordinary shares - 1,111,739,580 (29th June 2009)

Major Shareholders

ANZ Nominees Limited	161,366,628	15.991
Santos Limited	140,000,000	13.873
Bell Potter Nominees Ltd	71,313,232	7.067
Ashling Development Incorporated	50,000,000	4.955
Bond Street Custodians Limited	47,369,820	4.694

Most Recent Statement

23/11/09 - GOOD OIL SHOWS - MAILISU III WELL #6
16/11/09 - DRILLING ACTIVITY ANNOUNCEMENT - MAILISU III WELL #6
12/10/09 - East Mailisu Well No1/Santos Farm-In
01/10/09 - Full Year Statutory Accounts
30/09/09 - DRILL RIG MOBILIZING TO EAST MAILISU - KYRGYZ REPUBLIC
05/08/09 - June 2009 Quarterly ASX Report