Dear Sir,

Following good shows recorded in the main reservoirs (Beds V & VII) in Mailisu III #6, the well was cased as

a future oil producer in November 2009. During December 2009 perforations were undertaken over Bed VII.

After the initial test of Bed VII failed larger, deeper-penetrating charges were ordered and used to reperforate

the zone. The re-perforation was successful and an inflow into the wellbore was observed with oil

being recovered on the perforating line. Swabbing of the well will be undertaken to confirm oil quantity.

Following this tubing will be run, the zone acidized and production testing undertaken to determine flow

rates.

Caspian is pleased to announce that it has signed two Area of Mutual Interest Agreements (AMIs) – one

with Audax Petroleum and Sibinga Petroleum with respect to Romania and another with Sibinga Petroleum

with respect to the Republic of Kazakhstan.

After entering the European Union (EU) in 2007 the Romanian Government released production and

exploration licences for bid throughout 2007 and 2008. In Q2 2009 the largest petroleum licence

relinquishment in Romania’s history took place (approximately 40,000sqkm relinquished by Petrom &

Romgaz). These blocks will become available through future bidding rounds. Bids for the first tranche (30

blocks in Pannonian, Danube Delta & Black Sea) are due in May 2010 with the winning bids notified in early

July 2010.

AuDAX (ADX), an ASX listed company, is operator of the AMI and throughout 2008 and 2009 has

undertaken studies to identify the regions and key productive reservoirs with the greatest future hydrocarbon

potential. Significant remaining undiscovered hydrocarbon potential has been identified in all four major

hydrocarbon basins with the AMI group able to leverage off publicly available data and local in-country

experience and networks.

The emerging eastern European economies are a ready market for both oil and gas, with currently regulated

gas prices being in the order of 5 USD/mscf whilst the near term expectation is in the order of free market 10

USD/mscf due to the European accession treaty to which Romania is a signatory. Romania itself is an

emerging hydrocarbon market (240,000bbls/d & 644BCF/year domestic consumption) with an extensive and

interconnected pipeline network of high pressure and low pressure (40psia) grids. Romania has a large

refining capacity of 517,000bbls/day from its 10 refineries.

Caspian has a 20% position in the AMI group.

Following discussions which identified a shared interest in Central Asia, Caspian (operator) has formed an

AMI (50/50) with Sibinga Petroleum. Sibinga Petroleum is a private organisation actively pursuing

producing asset opportunities in Central Asia and Eastern Europe.

During the last 6 months Caspian has been evaluating various opportunities in Kazakhstan which will allow

Caspian’s regional expertise and operating capacity in Central Asia to be fully utilized. During 2010 it is

planned to highgrade and bid on several opportunities following technical and commercial evaluation.

Caspian has a 50% position in the AMI group.