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Block Energy keen to flesh out potential at West Rustavi

Snapshot

  • Owns oil and gas assets in Georgia
  • A sidetrack at West Rustavi among best wells yet in Georgia
  • Second sidetrack underway at West Rustavi
oil rig

Quick facts: Block Energy PLC

Price: 5.1 GBX

AIM:BLOE
Market: AIM
Market Cap: £20.07 m
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What it owns

West Rustavi

Block 100% with the field holding an estimated 38 MMbbls (million barrels) of gross contingent resources ('2C') of oil which the company hopes to mature to 2P reserves.

In addition, there are legacy gas discoveries supporting a gross contingent ('2C') resource of 608 BCF (Source: CPR).

Following the current build-up phase, the 16a sidetrack will be placed on production using the field's existing test facilities and the oil trucked to a nearby oil storage facility.

The 16a horizontal sidetrack at West Rustavi was the first of two at the prospect targeting a combined gross production of 650 bopd.

In October, Block spudded well 38Z, the next sidetrack at West Rustavi and said subsequently that it had now successfully installed and cemented new casing through the build section of the well.

Schlumberger

Schlumberger is drilling across the licence adjacent West Rustavi targeting a potentially huge discovery.

"With ExxonMobil recently entering the country and ongoing operations across Schlumberger's 100% owned position next to our own licences, Georgia's potential as a hydrocarbon region is being recognised by the industry.

Norio

Block is undertaking a programme of workovers and sidetracks at Norio, also in Georgia, to boost production to 250 barrels per day.

Satskhenisi

A potential 28mln barrels where exploration is in the process of getting underway.

How it's doing

in October, Block Energy PLC (LON:BLOE) signed a gas sales agreement with Bago, one of the largest private gas suppliers and purchasers in Georgia for output from the West Rustavi field.

Bago will pay US$5.24 per thousand cubic feet and cover the costs of installing the infrastructure to connect the field to the Georgian grid network.

Sales are expected to start in the first quarter of 2020.

What the boss says: Paul Haywood

"We are delighted to sign this Agreement with Bago, one of Georgia's largest domestic private gas traders with ready access to extensive infrastructure capable of handling large volumes of gas.

“West Rustavi is the site of multiple historic gas discoveries, which we will test in the course of our work programme."

Watch video interview 

Inflexion points

  • Stable production from West Rustavi legacy and sidetrack wells
  • More horizontal sidetracks scheduled for West Rustavi
  • Exploration at Satskhenisi to confirm new prospective resources
  • Company moves cashflow positive as production ramps up

Blue Sky 

Production rises eventually to between 8-10,000 barrels per day.

Schlumberger can prove up major oil play in Georgia

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