Block Energy , an oil and gas exploration company focused on Georgia, recovered more than 200 barrels of oil from a legacy vertical well at the company’s West Rustavi permit. Over the following days, an additional 300 barrels of light oil flowed to a temporary wellsite production facility.
Tests confirmed the well lies in an active hydrocarbon system and the Middle Eocene reservoir, previously producing, still contains reserves and is pressurised. Block Energy now plants to continue its programme, restarting production at the field by drilling two initial horizontal sidetracks.
Block Energy’s target in West Rustavi is to hit a combined gross production of 650 barrels of oil per day (bopd) by Q1 2019.
Since the release of this news, Block Energy’s share price has jumped 11.54% reaching 2.9p.
In addition to West Rustavi, the company’s other licences are also maintaining strong output. In Norio field, in which the company hold 100% interest, gross proven oil reserves sit at 1.63 million barrels and a programme is underway to reach 250 bopd by Q1 2019.
Paul Haywood, Block Energy’s CEO, celebrated the news: “The recovery of more than 500 barrels of oil… at West Rustavi 16a is highly encouraging and bodes well for our horizontal sidetrack programme at the field.”
He also pointed out how the programme’s success has been strategically in the making. “Having raise £5 million by the time of our IPO we are fully funded to undertake our work programmes at West Rustavi and Norio, which together target a combined 900 bopd net to Block by Q1 2019.”
2019, then, is gearing up to be momentous for the company. Haywood reinforced this message, arguing, “With our existing production at Norio selling for Brent minus US$10, a production rate of 900 bopd has the potential to generate circa US$13 million in annual revenues at current oil prices, a level that far outstrips our existing £7 million market valuation.”
And Block Energy doesn’t plan on stopping there; “With four more existing wells identified as suitable sidetrack opportunities at West Rustavi, an inventory of historic wells at Norio, and a potential 28 MMbblof contingent resources at Satskhenisi, the opportunity to significantly scale our cash flow further is clear.”
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