With over 110,000 operational man-hours worked in 4Q21 with no lost-time incidents, Block Energy (BLOE ) said its JKT-01Z well has reached a target depth of 2,565m measured depth.

In an operations update for the three months to 31 December 2021, the Georgian-focused exploration and production firm said JKT-01Z, the second well in the current two-well drilling programme, reached TD at 2,565m MD following the end of 4Q, in early January 2022.

‘Considerable’ mud losses were encountered with drilling, suggesting the well has intersected multiple open fractures. Block noted that completion operations are now underway and will be followed by clean-up operations to unload the mud losses, ahead of the well being put on test.

To support effective management of costs and minimise drilling time of well JKT-01Z whilst maintaining the same exposure to an oil-in-place of approximately 8 MMbbls, the well has been drilled via a sidetrack from a vertical well drilled in 2011 by a previous operator.

Located in Block XIB, JKT-01Z is close to and targets the same area of the Middle Eocene reservoir as KRT-39, which has been a sustained producer of oil and gas for over 20 years. 

Addressing its shareholders, Block explained that unlike well KRT-39, well JKT-01Z has been drilled as a horizontal well, in a move that will maximise the chance of intersecting fractures. 

Block said JKT-01Z has benefitted from data gathered from the drilling of previous wells - which enabled a recalibration of high-quality 3D-seismic data acquired in 2019 - as well as from refinement of the company’s geomechanics model and horizontal drilling practices.

Additionally, JKT-01Z has been tied into the recently installed gas infrastructure at KRT-39, which will enable the rapid monetisation of the gas production from JKT-01Z, it reported.

In 4Q, gross production (including the state of Georgia’s share) was 34.6 Mboe (Q3: 34.6 Mboe), comprising 24.9 Mbbls of oil (Q3: 21.0 Mbbls) and 9.7 Mboe of gas (Q3: 13.6 Mboe).

The average gross production rate for 4Q remained the same as 3Q21 at 376 boepd.

In 4Q, Block sold 33.6 Mbbls of oil (3Q: 11.2 Mbbls) for $2.4m (3Q: $0.742m, resulting in a weighted average price of around $73 per barrel, a 10% rise in the realised price from 3Q.

In addition, the Company sold 36.1 MMcf of gas in 4Q (3Q: 52.4 MMcf) for $0.109m (3Q: $0.159m), resulting in a weighted average price of around $3.03/Mcf (Q3: $3.03/Mcf).

As at 31 December 2021, Block had $1.2m cash at bank (30 September 2021: $2.7 million).

Block Energy’s Chief Executive Officer, Paul Haywood, commented: “We are pleased with the progress being made at JKT-01Z. Having encountered hydrocarbons and experienced significant mud losses whilst drilling, the early signs are encouraging. If JKT-01Z proves to be successful, side-track operations funded by production revenue will be initiated back at WR-B01, adopting the same geological approach employed at JKT-01Z.

Strong sales, stable production and the ability to take advantage of enhanced sales pricing during the quarter, combined with encouraging initial signs from JKT-01Z, all add to the Board’s confidence in Block’s ability to improve performance as we look to the year ahead”.

Drilling at JKT-01Z, which is targeting “a substantial pool of oil and gas” of around 8 million barrels ( MMbbls) of oil-in-place, officially started last month. The second well is located near the vertical well KRT-39, which has produced c.450 Mbbls of oil over the last 20 years.

Both wells are in Block XIB, which the Georgian-focused development and production company acquired from the oilfield services company Schlumberger in November 2020.

Block said the drilling of JKT-01Z has been optimised by the recalibration of its 3D-seismic data ‘with data gathered from recent wells, the use of horizontal drilling technology and geomechanics, and the ability to optimise the well trajectory in real time whilst drilling.’

It said the trajectory and horizontal nature of the well design ‘will maximise the chance of intersecting fracture attributes identified in the same reservoir interval in KRT-39, the producing interval near the fractured volcanic tuff at the top of the Middle Eocene.’Follow News & Updates from Block Energy: