The company has also decided to suspend the West Rustavi field operations, to conserve its gas reserves until a pipeline project completes later this year. Early production facilities are presently in transit to the field, in the Republic of Georgia.
In a statement, the group said it had US$3.4mln of cash and its crude inventory was worth around US$470,000. Prior to shut-in, West Rustavi was yielding some 325 barrels oil equivalent per day.
"These are unprecedented times for the global economy, in general, and the oil and gas sector, in particular,” said Paul Haywood, Block chief executive.
“We have to navigate our business through a new environment of low oil prices, a slowing wider economy and countrywide lock-downs. With the implementation of the measures announced today, we have made our business significantly more sustainable, as well as conserving our hydrocarbon assets for the future,” he added.
Haywood continued by saying “your company continues to work tirelessly on completing the purchase from Schlumberger. With a determination to achieve first gas sales and the preparation of a comprehensive exploitation plan, leaving it well-positioned as the COVID-19 crisis subsides and oil prices recover".
Block also informed investors that its programme to re-enter and sidetrack the WR-51Z had been abandoned because of the poor condition of the original well.
“While the abandonment of WR-51Z is clearly a disappointment, the decision taken by management is the right one. There are inherent risks when re-entering old wellbores which demand a disciplined approach to cash management,” the group said.
Finally, with an eye towards some desktop work, it noted that the preliminary results of 3D seismic data processing exhibit good subsurface imaging and boosts the company’s ability to identify and high-grade the optimal wells for new horizontal completions.
It pointed out that follow the acquisition of Blocks XI and IX the company is now assessing opportunities to rework existing well stock – as it has at West Rustavi – and it may decide to re-enter the recent deep Pat E-1 gas well in order to sidetrack and complete a horizontal section in one of the Lower Eocene gas zones appraised and tested during 2018/2019.
The Pat E-1 well is estimated to have initial-gas-in-place of around 600bn cubic feet.