(Alliance News) - Shares in Block Energy PLC fell on Wednesday as the company reported the failure of some equipment at a well on the West Rustavi field in Georgia.
The stock was 24% lower on Wednesday at midday in London at 4.86 pence each.
Block said since testing started at the WR-16aZ well, oil and water production "has varied considerably" due to the failure of some downhole equipment when Block tired to cement the well during drilling.
The well is flowing strongly, Block said, but the average water cut stood at 78% between September 17 and September 23. It has, however, delivered gas at rates "significantly higher" than Block had expected.
Since testing began, the well has produced over 9,000 barrels of light, sweet crude oil. However, the mix of water and oil coming out has now delayed stable production.
Elsewhere, Block has started sidetracking work at the WR-38Z well on the same field, targeting the Middle Eocene and Upper Eocene formations.
"Encouragingly, the WR-16aZ appraisal well has proved the productivity of the Middle Eocene naturally fractured oil reservoir. It has also confirmed unassociated gas flows above our expectations. The flow test results have varied over time due to lost drilling fluid and a mechanical failure when drilling the well," said Chief Executive Paul Haywood.
"In the course of drilling WR-16aZ we have strengthened our understanding of the drilling techniques applicable to Georgia which will be invaluable as we begin drilling well WR-38Z, the second of five wells we plan to horizontally sidetrack in our fully-funded campaign. I look forward to updating you on our progress at WR-38Z."
By George Collard; georgecollard@alliancenews.com
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Block Energy P. (BLOE)