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(Sharecast News) - Caspian Sunrise announced the start of production from the Block 8 contract area in Kazakhstan on Wednesday, with Deep Well P2 producing at an initial rate of about 250 barrels of oil per day.
The AIM-traded firm said the development marked a key step as it neared the completion of its acquisition of the 2,823 square kilometre block.
Drilling and testing activity had resumed at Block 8 following the renewal of the licence for the Sholkara structure in the fourth quarter of 2024.
At Deep Well P1, testing had begun after perforation of a three-metre interval at a depth of 3,400 metres.
Until the acquisition was formally completed, proceeds from oil sales at Block 8 would be used to repay the loan associated with the transaction.
Once completed, all net income from oil production - after a $5 per barrel royalty, capped at $60m - would accrue to the group.
The company said that ongoing production at Block 8 would enable it to continue oil trading activities, following the expected disposal of the MJF and South Yelemes shallow structures at its BNG Contract Area.
Block 8 is located around 160 kilometres from BNG.
At 1123 BST, shares in Caspian Sunrise were up 9.09% at 2.4p.
Reporting by Josh White for Sharecast.com.
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