First Gas Sales at West Rustavi Field

RNS Number : 1805P

Block Energy PLC

16 February 2021

 

16 February 2021

Block Energy plc

("Block" or the "Company")

First Gas Sales at West Rustavi Field

Block Energy plc, the development and production company focused on Georgia, is pleased to provide an update regarding operations at its West Rustavi field. Block announces that, f ollowing Georgian Oil & Gas Corporation ("GOGC") completing the tie-in of Bago LLC's gas pipeline into GOGC's main gas pipeline, gas sales from its West Rustavi field in Georgia have commenced .

West Rustavi wells WR-38Z and WR-16aZ (the "Wells") have been on continuous production since 28 January 2021 and 3 February 2021 respectively and production rates are currently 790 boepd, comprising 423 bopd and 1.9 MMcf/d of gas, representing a substantial increase when compared to the rates achieved before the wells were shut-in during April 2020. 

Production across all of Block's portfolio is currently approximately 940 boepd, resulting in estimated future revenue for the Company of approximately US$920,000 per month at current oil and gas prices.

Production from the Wells is currently constrained as the Company continues its production testing programme, monitoring reservoir production and facility parameters, in order to determine the maximum flow potential and optimum production rates. The testing programme will continue into Q2 this year and, on completion, stable production rates will be communicated to the market.

As well as being a major milestone for Block's growth, the commencement of gas sales also represents a significant step change for the Company's progression towards becoming a sustainable energy provider to Georgia. Block's onshore, low-cost gas production is distributed to independent gas stations, where it is compressed for fuel in motor vehicles. Block's gas production represents an important contribution to Georgia's harnessing of an otherwise unutilised energy source, which has the potential to replace the more carbon-intensive forms of hydrocarbons being imported and used in the country.

Block Energy plc's Chief Executive Officer, Paul Haywood, said:

"The commencement of gas sales is a great achievement, as Block has managed to deliver its gas project in a safe manner, with zero LTIs, in the face of a very challenging global environment. The expected revenue from our assets now puts us in a strong position as it is expected to more than cover our operating and administrative expenditure and, therefore, we can look to deploy the surplus cash into further increasing our production rate throughout 2021. Our decision to shut in our production at the West Rustavi field in April 2020 has proven to be an astute one, as we can now sell our oil based on a Brent price above US$60/bbl. By commencing gas sales, we have started to deliver on our ESG strategy of limiting flaring and consequently reducing our carbon footprint.  We look forward to updating the market further as we embark on our production enhancement plan across our mature fields and prepare for the drilling new wells soon."

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED.  ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

-Ends-

For further information please visit http://www.blockenergy.co.uk/ or contact:

Paul Haywood (Chief Executive Officer)	Block Energy Plc	Tel:  [phone]
Neil Baldwin (Nominated Adviser)	SPARK Advisory Partners Limited	Tel: [phone]
Peter Krens (Corporate Broker)	Tennyson Securities Limited	Tel: [phone]
Owen Roberts / Violet Wilson (Financial PR)	Camarco	Tel: [phone]

Notes to editors

Block Energy plc is an AIM-listed independent oil and gas company focused on production and development in Georgia, applying innovative technology to realise the full potential of previously discovered fields.

Block has recently acquired a 100% working interest in Georgian onshore licence blocks IX and XI^B. Licence block XI^B is Georgia's most productive block, with 2P oil and gas reserves of 64 million boe and historic production of over 180 MMbbls of oil from the Middle Eocene, peaking in the mid-1980s at 67,000 bopd.

The Company has a 100% working interest in the highly prospective West Rustavi onshore oil and gas field with multiple wells that have tested oil and gas from a range of geological horizons. The field has so far produced 50 Mbbls of light sweet crude and has 0.9 MMbbls of gross 2P oil reserves in the Middle Eocene. It also has 38 MMbbls of gross unrisked 2C contingent resources of oil and 608 Bcf of gross unrisked 2C contingent resources of gas in the Middle, Upper and Lower Eocene formations (Source: CPR Gustavson Associates: 1 January 2018).

Block also holds 100% and 90% working interests respectively in the onshore oil producing Norio and Satskhenisi fields.

The Company offers a clear entry point for investors to gain exposure to Georgia's growing economy and the strong regional demand for oil and gas.

Glossary

1.  bbls: barrels. A barrel is 35 imperial gallons.

2.  boe: barrels of oil equivalent.

3.  bopd: barrels of oil per day.

4.  boepd: barrels of oil equivalent per day.

5.  Mbbls: thousand barrels.

6.  MMbbls: million barrels.

7.  MMcf/d: million cubic feet per day.

8.  Bcf: billion cubic feet.

9.  LTI: lost time incident.

 

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