TIDMBLOE
RNS Number : 9846E
Block Energy PLC
02 November 2022
2 November 2022
Block Energy plc
("Block" or the "Company")
Operational Update
Block Energy plc, the exploration and production company focused
on Georgia, is pleased to provide the following operational update
on its three-project strategy.
JSR-01 DEEP (Project II)
As previously announced, well JSR-01 DEEP has been safely
drilled and completed below budget. It is the first of a series of
Project II wells targeting a wide range of opportunities designed
to exploit large, undrained areas of the deeper zones of the Middle
Eocene reservoirs in Block XI(B) and test contingent resources
defined by Block's technical team of over 200 MMbbls.
The Company drilled the naturally fractured 600m vertical
section of the Middle Eocene in the Patardzeuli Oil Field with
total losses of drilling fluid, a drilling technique not previously
employed in Georgia. This technique was used deliberately to avoid
wellbore damage from Lost Circulation Material. During drilling,
high losses (cumulative of 45,000 bbls of fluid) were recorded,
which is a positive indicator of highly transmissible natural
fractures. During the staged testing programme, both oil and gas
have been produced to the surface.
The ongoing JSR-01 DEEP testing programme has been designed to
systematically evaluate three independent intervals of the
reservoir, with different fracture characteristics and, as such,
differs from the programmes used in the Company's West
Rustavi/Krtsanisi oil field. The primary objective of the testing
programme is the accurate definition of the oil-productive zones,
to support the optimal design of future horizontal wells in the
Project II full-field redevelopment.
West Rustavi/Krtsanisi (Project I)
In the Krtsanisi anticline of the West Rustavi/Krtsanisi oil
field, the development of the Middle Eocene reservoir will continue
this month with the side-track of well WR-B01, which will be an
analogue to the successful well JKT-01Z.
WR-B01 ST will be drilled some 500m to the west and up-dip of
JKT-01Z. As with JKT-01Z, WR-B01 ST will target a fracture system
identified by a high density of seismic attribute lineations but on
the west side of the anticline. JKT-01Z has already produced a
cumulative volume of 64,000 boe over 11 months of continuous
production, providing an approximate 2.5x return on capex and
therefore supporting the Company's final investment decision, on
Project I.
WR-B01 ST is the first new development well associated with the
ERCE 2022 Competent Person's Report, which ascribed 3.01 MMbbl 3P
reserves, and an NPV10 project value of US57MM, to just a portion
of the West Rustavi/Krtsanisi Middle Eocene reservoir. The
Company's contingent resource report ascribes a total of 19.5 MMbbl
2C contingent resources to the whole West Rustavi/Krtsanisi Middle
Eocene reservoir.
The Company is well placed to fund WR-B01 ST from cash reserves
and ongoing cashflows, enabling Project I to commence. Discussions
relating to non-dilutive financing for Project I remain ongoing.
Given Georgia's strategic location and close links to European
energy markets, there remains strong interest in the petroleum
potential of the region.
Gas development (Project III)
Whilst Block's immediate focus is on developing cash flow from
Project I and defining potential company-making reserves in Project
II, the Company is also laying the foundations for Project III.
Project III seeks to appraise and monetise the 860 BCF of
contingent resources, identified by Block's technical team, across
licences XI(F) & XI(B) . Natural gas produced from a successful
Project III development will support Georgia's growing domestic
energy market and be suitable for export to Europe via Turkey.
The work programme for Project III includes 3D seismic
interpretation and correlation of seismic attribute lineations with
legacy production test data. The Company has upgraded its service
rig to support the advancement of Project III with low-cost
drilling and workover activities. Project III workover and retest
candidates are being selected. An update will follow when
operations commence.
Commenting, Paul Haywood, Chief Executive Officer of Block
Energy plc, said:
"The JSR-01 DEEP testing programme continues and it's pleasing
to announce the commencement of Project I with the spudding of well
WR-B01 ST later this month. I am encouraged by the positive support
received from government agencies in Georgia whilst our Company
remains active on many fronts. All of which underpin the strategy
we communicated earlier this year of offering our valued
stakeholders direct exposure to multiple high-impact events. We
look forward to providing further updates as additional progress is
made."
Stephen James BSc, MBA, PhD (Block's Subsurface Manager) has
reviewed the reserve, resource and production information contained
in this announcement. Dr James is a geoscientist with over 40
years' of experience in field development and reservoir
management.
**ENDS**
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.
For further information please visit
http://www.blockenergy.co.uk/ or contact:
Paul Haywood Block Energy plc Tel: +44 (0)20
(Chief Executive 3468 9891
Officer)
Neil Baldwin Spark Advisory Partners Tel: +44 (0)20
(Nominated Adviser) Limited 3368 3554
Peter Krens Tennyson Securities Tel: +44 (0)20
(Corporate Broker) 7186 9030
P hilip Dennis C elicourt Communications Tel: +44 (0)20
/ M ark Antelme 8 434 2 643
(Financial PR)
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 a 100% working interest in Georgian onshore licence
blocks IX and XI(B) . Licence block XI(B) is Georgia's most
productive block. During the mid-1980s, production peaked at 67,000
bopd and cumulative production reached 100 MMbbls and 80 MMbbls of
oil from the Patardzeuli and Samgori fields, respectively. The
remaining 2P reserves across block XI(B) are 64 MMboe, comprising
2P oil reserves of 36 MMbbls and 2P gas reserves of 28 MMboe.
(Source: CPR Bayphase Limited: 1 July 2015). Additionally,
following an internal technical study designed to evaluate and
quantify the undrained oil potential of the Middle Eocene within
the Patardzeuli field, the Company has estimated gross unrisked 2C
contingent resources of 200 MMbbls of oil.
The Company has a 100% working interest in licence block XI(F)
containing the West Rustavi onshore oil and gas field. Multiple
wells have tested oil and gas from a range of geological horizons.
The field has so far produced over 75 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
-- bbls: barrels. A barrel is 35 imperial gallons.
-- Bcf: billion cubic feet.
-- boe: barrels of oil equivalent.
-- boepd: barrels of oil equivalent per day.
-- bopd: barrels of oil per day.
-- Mbbls: thousand barrels.
-- Mboe: thousand barrels of oil equivalent.
-- Mcf: thousand cubic feet.
-- MMbbls: million barrels.
-- MMboe: million barrels of oil equivalent.
-- MMcf: million cubic feet.
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END
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