Caspian Energy Inc. has announced the signing of a number of agreements that enable its Kazakhstan subsidiary to immediately implement the previously announced testing of certain wells within the next 90 days, according to a news release.

Pursuant to the transaction agreements, additional financing has been committed to Aral Petroleum Capital LLP, a Kazakhstan partnership in which Caspian indirectly holds a 40% interest, to cover operating expenses, as well to Caspian to cover ongoing overhead and accounts payable, the release said. The financing will permit drilling, which will allow APC to meet its 2013-14 license drilling commitments in the North Block.

The agreements provide for the availability of a loan of US $20 million to APC for the purpose of funding APCs operations, according to the release. It is intended that proceeds from this loan will, in part, be used to fund the work prescribed in the work program agreed with the Ministry of Oil and Gas in Kazakhstan. This work program envisages the drilling of a deep exploration well in the Baktygaryn and Aransay area. In addition, one shallow well is planned to be drilled in Itassay.

APC has two existing wells for which testing has been approved, the release said. Of particular note is well 316, which is to be tested first, and for which $2 million of $20 million loan has been allocated. All required approvals to test well 316 have been granted. Negotiations are underway with local contractors with a view to commencing testing in the very near future and a rig is currently available for this purpose.

The agreements amend the loan agreement between Caspian’s wholly-owned subsidiary, Caspian Energy Ltd., and Asia Sixth Energy Resources Ltd. to allow CEL to draw $100,000 each month from now until November and to draw an additional $1.4 million as early as Dec. 28, 2013, the release said. These funds will enable Caspian to bring current all of its existing payable and to cover its budgeted operating expenses over the next 18 months.

In return for raising the financing, CEL's partners in APC, Asia Sixth Energy Resources and its subsidiary Groenzee BV, require CEL to transfer to them part of its ownership interest in APC resulting in CEL's interest in APC reducing from 40% to 33.5% provided CEL's Partners comply with their obligations under the agreements, the release said.