Atlantic Caspian Resources Plc Announces Acquisition of 20% Interest in East Caspian Oil, Inc.

LONDON--(BUSINESS WIRE)--Nov. 16, 1998--Atlantic Caspian Resources Plc (OTCBB/ADR:ALCRY), announced that it partially exercised its option over 20% of the issued share capital of East Caspian Oil, Inc. ("East Caspian").

Atlantic Caspian has entered into an agreement to vary the terms of the option agreement dated April 7, 1998 under which Atlantic Caspian was granted an option to acquire all or part of the issued share capital of East Caspian. East Caspian is the majority shareholder in a Kazak company, TOO BN Munai, which has the exclusive right to explore for oil and gas from the Akkulkovsky fields in the Republic of Kazakhstan.

The unrisked potential oil reserves from the Akkulkovsky fields have been independently estimated to be 1.068 billion barrels of oil and the unrisked potential oil in place as being 4.998 billion barrels.

The option agreement was modified so as to fix the price for the exercise of the option over all of East Caspian as the issue of 240 million ordinary shares (24 million ADR equivalents) of the Company at market price at time of exercise.

At the same time as varying the option agreement, Atlantic Caspian partially exercised its option to acquire 20% of East Caspian's issued share capital. The consideration for the acquisition was satisfied by the issuance of 48 million ordinary shares (4.8 million ADR equivalents) in Atlantic Caspian which valued the 20% interest in East Caspian at $7,192,800. The company now owns 20% of East Caspian and 5% of East Caspian's subsidiary, TOO BN Munai.

The new shares were allotted to Lynch Talbot Limited, which is the general partner of two Jersey based funds which are shareholders in East Caspian. Lynch Talbot Limited, as general partner of those funds, now owns 27.2% of the issued share capital of the Company.

Atlantic Caspian is continuing its due diligence on the Akkulkovsky fields so as to determine whether or not to exercise its option to acquire the balance of East Caspian's share capital.

Atlantic Caspian separately announced it has raised $2,775,000 before expenses by the issuance of 16,666,667 ordinary shares (1,666,667 ADR equivalents) in Atlantic Caspian to Marmara Resources Limited. Mr. Salahi Ozturk, a substantial shareholder in Atlantic Caspian, and Marmara Resources Limited are associated and now together hold 15.2% of Atlantic Caspian's issued share capital.

Both Lynch Talbot Limited and Marmara Resources Limited have agreed to lockup provisions whereby shares acquired by them will not be sold until November 11, 1999, except with the prior consent of Atlantic Caspian.

Pursuant to Securities & Exchange Commission guidelines, reserve estimates must comply with the reserve categories in Regulation S-X. The reserves estimate for the Akkulkovsky fields referred to in this press release do not comply with Regulation S-X. The Akkulkovsky fields do not contain proved reserves.

Atlantic Caspian Resources Plc is an oil production and exploration company specializing in the Central Asian regions of the former CIS -- particularly Kazakhstan. The Company's Ordinary Shares are traded on the London AIM Exchange under the ticker symbol ACA. In addition to its activities with the Akkul field, Atlantic Caspian Resources owns an 80% interest in the Kamenistoye oil field in Kazakhstan which boast proved undeveloped reserves of 8.7 million barrels of oil of which 6.96 million barrels are attributable to the Company. None of the Kamenistoye reserves are proved developed. The Company recently formally filed Form 20F with the U.S. Securities and Exchange Commission to become a United States reporting company. It intends to file an application shortly with NASDAQ to seek a listing of its ADRs on the NASDAQ National Market System (NMS).

The information in this release includes certain forward looking statements that are based upon assumptions that are subject to a number of uncertainties and risks and actual results may differ materially. The uncertainties and risk include, but are not limited to, actual production, the price of oil and the ability to sell the product produced.