(Alliance News) - Block Energy PLC said Wednesday it has entered a gas sales agreement with Georgian gas supplier and purchasers Bago LLC, for the offtake of gas produced from Block's onshore West Rustavi field.
The agreement runs until the end of December 2022, under which Bago will purchase gas produced from the field at a price of USD5.24 per thousand cubic feet.
Bago will also pay for costs of installing the infrastructure necessary to connect the gas produced from the field to Georgia's gas distribution network.
The West Rustavi field has gross, unrisked 2C contingent resources of 608 billion cubic feet in the Eocene and Cretaceous formations. Sales are expected to start during the first quarter of 2020.
Operationally, Block Energy is pursuing a multi-well programme to realise West Rustavi's oil & gas potential, including the sidetracking of a second well, WR-38Z, in addition to WR-16aZ.
Block is also planning to sidetrack three other wells, test one of the gas discoveries, and drill a new gas well.
"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," said Chief Executive Officer Paul Haywood.
Shares in Block Energy - which is headquartered in London - were up 4.0% at 7.80 pence on Wednesday.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Block Energy P. (BLOE)