LONDON: Block Energy plc announced that following 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 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.”
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. www.blockenergy.co.uk