Caspian Holdings(AIM:CSH) has progressed its expansion in the United States with the acquisition of a 50% interest in Black Gold of Kentucky Inc. (“Black Gold”). Caspian will be issued shares in Black Gold for a cash payment of US$400,000. Following this purchase of shares, Caspian will hold 50% of the issued share capital of Black Gold.
Black Gold is a new company, focusing on the fast track redevelopment of oil fields with its initial project being the Irvine oil field in Kentucky, USA. The Barnett lease, near Ravenna, is the first lease in the field to be reopened and contains 8 wells. All the wells have been worked over and production is expected to start in July 2008. Target initial production rates are 5 barrels of oil per well per day. The Irvine field contains approximately 1000 old wells which were put into production by the major oil companies in the 1930s and 1940s and then left abandoned when they were deemed uneconomic. The Company believes that in today’s oil market that is no longer the case.
Placing
In order to fund the acquisition, the Company has raised £285,000 net of costs through the placing of 9.5 million new ordinary shares at an issue price of 3 pence each with existing and new shareholders.
The Company has also issued 200,000 to an employee as part of their remuneration package in financial year to 31 December 2007.
Application has been made for these 9,700,000 new ordinary shares to be admitted to AIM which is expected to occur on 15 July 2008.
Commenting on the acquisition, Michael Masterman, CEO of Caspian Holdings said: “We are delighted to be able to announce the acquisition of Black Gold. Rising oil prices have made it possible for companies such as Caspian to capitalise on opportunities which would have otherwise been marginal. Indeed, many of the major oil companies did the initial work on these fields but abandoned them for fields in Saudi Arabia, with higher flow rates. Black Gold is a great asset for our company, requiring limited capital investment and can cumulatively make a strong contribution to oil production.
With Black Gold and Pine Meadows in the USA and Zhengeldy in Kazakhstan we can potentially have three oil fields in production within six months. Our focus, with current oil prices at around USD145 per barrel, is oil production.”
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