Aral Petroleum Capital LLP: Has Positive Test Results and Starts Limited Production To Generate Positive Operational Cash Flows

Caspian Energy Inc. announces today that its wholly-owned subsidiary, Aral Petroleum Capital LLP (“Aral”), has produced positive results after completing a period of test production on two existing wells at its East Zhagabulak field in Aktobe Oblast, Kazakhstan. After approximately 10 months of inactivity, Aral operating staff performed basic geological and mechanical tests that involved re-opening the wells, removing paraffin, and testing oil pressure. The tests demonstrated a capability to resume production. An aggregate of approximately 3,750 barrels of oil were produced by Aral during the tests. Prior to such tests, production had been temporarily suspended in the first quarter of 2015 because of the dramatic downturn in world oil prices.

After recent positive developments with regard to Aral’s current outstanding trade payables, the board of directors of Caspian (the “Board”) has approved the resumption of limited production of about 750 barrels of oil per day by Aral. As noted in a news release dated November 9th, 2015, Aral has applied for protection from its trade creditors under the Law of the Republic of Kazakhstan On Rehabilitation and Bankruptcy through implementation of rehabilitation procedures (the “Rehabilitation Procedures”). The application for Rehabilitation Procedures resulted in an automatic moratorium of up to two months on claims by creditors, meaning Aral’s bank accounts are currently protected from being embargoed and sales proceeds can flow as intended during the period of the moratorium.

“Oil production by Aral will produce marginal but still positive operational cash flows,” said Michael Nobbs, Chairman of the Board. “Although higher crude oil prices are required to result in meaningful contributions to Aral’s fixed costs and future capital expenditures, it is important for Aral to get back to production to secure its licences and maintain positive relations with the Kazakh government and the local community. The net sales proceeds will make a contribution to overhead, and we will also be well positioned to ramp up production in the future if a sustained increase in the price for our crude oil materialises.”