LONDON (Alliance News) - Block Energy PLC on Monday said it can get started on drilling work in Georgia after signing contracts for equipment.
Block has agreed contracts with Georgian contractor JSC Norio Oil Co and drilling equipment owner Georgia Oil & Gas Ltd.
The agreement, it continued, gives it "unlimited and exclusive" access to two A50 workover rigs and a ZJ40 drill rig for six months, which can be extended by a further six months. The first rig will be mobilised "in the next few days".
Block hopes to increase its production in Georgia to around 900 barrels of oil per day within 24 months, and it will also re-test some gas on the West Rustavi licence.
Managing Director Paul Haywood commented: "The signing of this agreement represents the culmination of a considerable amount of work by the team since our AIM IPO in June.
"Importantly, the work programmes across our three licences in Georgia can now get underway in the knowledge that we have secured access to the required rigs on favourable terms," Haywood continued.
"As well as generating significant cost savings for the company and mitigating equipment availability risks, the agreement provides us with full control over forthcoming operations as we look to embark on our low risk, low cost work programmes to scale up oil production to 900 barrels of oil a day within 18 to 24 months."
Block Energy shares were down 3.8% midday Monday at 3.03 pence.
Block Energy P. (BLOE)