Oil group Caspian Holdings says new Kazakhstan reserve figures this October could set it on track to meet and exceed prospectus reserve estimates of 13 million barrels.

Michael Masterman, Australian executive chairman of AIM-quoted Caspian, says the company had been mystified at what appeared to be a succession of dry wells in the Zhengedly license area towards Kazakhstan's Caspian shore. However, when oil services giant Schlumberger was called in to advise, it argued there had been faults with the logging and segmentation techniques used in London-based Caspian's earlier drilling, which could explain these apparently perverse results.

Caspian is now paying Schlumberger £295,000 for a new study of its reserves and reservoir, which should be ready in October. Masterman says this could take the company's potential reserves above 13 million barrels, adding that it has applied for new areas in the Caspian region, which could increase prospective reserves even further.

Caspian is already producing from other wells in the area and its license allows it to export up to 90 per cent at world prices, rather than selling into the domestic Kazakhstan market at controlled prices. Masterman says an export terminal now being built at Makat on the Caspian Sea should therefore enable the company to increase wellhead prices from $18 to $40 a barrel, against a market price of nearly $60, claiming anyway that the company can still make money at $18.

Floated last November at 23p, Caspian shares have swung since then between 54.5p and 21.5p and now trade at 29.5p. If the present programme does rectify previous reverses, they could prove cheap.

Caspian Holdings	AIM	£0.67m	0.62p	0.00p
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