Block Energy PLC (LON:BLOE) has 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.
Block is currently working to understand the geology at West Rustavi better.
A sidetrack, WR-38Z, is currently being drilled, which is the second in a development programme that will see up to three additional wells.
Paul Haywood, chief executive, said: "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.
"When we have made further progress with our campaign, we look forward to providing guidance for West Rustavi oil and gas production for 2020."