Sale of partial stake in drilling vessel underway

Caspian Sunrise, an oil and gas company with a focus on Kazakhstan, has inked a deal with Stepping Stone Investments Limited, a company registered in the Seychelles, to sell 50 per cent of its stake in a drilling vessel designed specifically for use in the shallow northern Caspian Sea where traditional deepwater rigs cannot be used.

Caspian Sunrise disclosed on Monday, 12 June 2023, that its board had agreed on a conditional sale of a 50 per cent interest in the UAE-registered Prosperity Petroleum FZE, the holding company of the Kazakh-registered KC Caspian Explorer LLP, which in turn owns the Caspian Explorer drilling vessel, for a cash consideration of $22.5 million.

According to the company, the sale is conditional, among other things, upon the receipt of the payment and the re-registration of the sale of shares in the UAE. In 2020, Caspian Sunrise acquired this vessel for approximately $3.7 million and since then it has undertaken a safety-related contract for the North Caspian Operating Company.

Come March 2023, the firm revealed Caspian Explorer’s first “major” drilling contract, which is scheduled to start in the summer of 2024. This deal enables the vessel to drill a well to a planned depth of 2,500 metres for the Isatay Operating Company LLP, a Kazakh registered explorer, in which Italy’s Eni holds the majority stake.

Furthermore, Caspian Sunrise explains that the carrying value in its 2021 financial statements of its 100 per cent interest in the Caspian Explorer was $3.6 million. Therefore, the disposal would be expected to result in a gross accounting profit of around $20 million. In 2022, the vessel had no revenue but did bring costs of about $850,000.

Caspian Explorer is a drilling vessel capable of drilling exploration wells to depths of up to 6,000 metres in extremely shallow water in the northern Caspian Sea. It can accommodate around 100 people. Assembled in the Ersay shipyard in Kazakhstan between 2010 and 2011, the Caspian Explorer was conceived by a consortium of leading Korean companies, including KNOC, Samsung and Daewoo Shipbuilding.

Clive Carver, Chairman of Caspian Sunrise, commented: “We are naturally pleased that our faith in the Caspian Explorer will result in a significant influx of funding to further develop the group’s assets without any dilution to shareholders.”