Last checked at 1 Jul 2019 07:00
Block Energy Plc | Index: AIM | Epic: BLOE.L | Sector: Oil and Gas
Block Energy Plc ('the Company' or 'Block') Secures Storage Agreement to Allow Oil Production to Restart at West Rustavi Well 16aZ
1 July 2019
Block Energy Plc, the exploration and production company focused on the Republic of Georgia, is pleased to announce it has entered into an oil storage leasing agreement ('the Agreement') with Georgian Oil and Gas Corporation ('GOGC'), the state-owned national oil company of Georgia, that will allow oil production to restart in approximately 7 days, at the Company's West Rustavi field ('West Rustavi').
The Agreement secures for the Company immediate access to up to 90,000 bbls of storage capacity at GOGC's main facility near the town of Sartichala, located some 30 km from West Rustavi and readily accessible from the Khakheti motorway that runs by the field, one of Georgia's main transport arteries. Removing oil storage limitations is a critical element in Block's fully-funded back to back drilling programme, which has been designed to ramp up existing oil production and advance a contingent gas resource of over 600Bcf.
The next step in the Companys programme includes sidetracking of the adjacent and analogous well 38, and three of the field's other wells, two of which will also be tested for their historic gas discoveries. In parallel to the immediate drilling programme, a 3D seismic survey will be acquired to identify optimal locations for new horizontal oil and gas wells across the field.
Paul Haywood, Block Energy Chief Executive Officer said: 'We are delighted to have secured first-class oil storage capacity at competitive rates close to West Rustavi, at a major facility where GOGC safeguards some 350,000 bbls on behalf of several well-established operators. We can now allow well 16aZ to flow to its full potential, opening the prospect of excellent netbacks of US$36/bbl at US$65/bbl Brent and US$3.40/MCF for gas.
'We are preparing a detailed operations update which we look forward to sharing with the market shortly, setting out our busy schedule for the next 12 to 18 months.'
Roger McMechan, Technical Director, has reviewed the reserve, resource and production information contained in this announcement. Mr McMechan has a BSc in Engineering from the University of Waterloo, Canada and is a Professional Engineer registered in Alberta.
This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation which came into effect on 3 July 2016.
**ENDS**
Further information
For further information please visit http://www.blockenergy.co.uk/ or contact:
Paul Haywood (Chief Executive Officer) | Block Energy Plc | Tel: +44 (0)20 7997 6136
|
Neil Baldwin (Nominated Adviser) | Spark Advisory Partners Limited | Tel: +44 (0)20 3368 3554 |
Peter Krens (Corporate Broker) | Mirabaud Securities Limited | Tel: +44 (0)20 3167 7221 |
Frank Buhagiar/Juliet Earl (Financial PR) | St Brides Partners Ltd | Tel: +44 (0)20 7236 1177 |
Glossary
1. Block currently has a 71.5% WI in West Rustavi, having secured an agreement in February 2019 to acquire a 100% WI that will give the Company full strategic control over the field's development (RNS: https://bit.ly/2H1Eqt5).
2. West Rustavi has an estimated 0.9 MMbbls 2P oil reserves, 38 MMbbls of gross unrisked 2C contingent resources of oil in the Middle, Upper and Lower, Eocene and 608 BCF of legacy gross unrisked 2C contingent resources of gas in the Eocene and Cretaceous (Source: CPR Gustavson Associates : 1 January 2018).
3. Bbls; Bbl/d: Barrels per day. A barrel is 35 imperial gallons.
4. Well 16aZ has been referred to as well 16a in previous updates. The Company is now referring to the well as 16aZ to reflect the addition of the horizontal sidetrack to the vertical well.