Block Energy says WR-B1 well remains ‘on target and as planned’
(BLOE ) said the drilling of well WR-B1 within its West Rustavi onshore oil and gas field has reached the 9 ⅝" casing point and remains “on target and as planned” to date.
Block Energy holds a 100% working interest in the West Rustavi onshore oil and gas field with multiple wells that have tested oil and gas from a range of geological horizons. Block spudded the WR-B1 well at the WR-BA location on the West Rustavi field back in June 2021.
The well is targeting the Middle Eocene reservoir with a horizontal section around 800 metres long for 2.1 MMboe of recoverable oil and gas. WR-BA is the first well to be drilled using the data from Block’s 3D-seismic survey acquired over the West Rustavi licence area in 2019.
Today, the Company told investors that well WR-B1 has successfully reached the 9 ⅝" casing point, having drilled ahead from the kick-off point earlier in the month, and that the casing has now been installed and cemented in place at the top of the Middle Eocene reservoir.
The reservoir was encountered within two metres of the depth prognosed using the data from the Company's 3D-seismic survey. The Company will now commence drilling the horizontal 8 ½" reservoir section of the well which is expected to reach total depth later in August 2021.
Block Energy believes the WR-B1 well at West Rustavi is potentially transformative for the Company, targeting 2.1 MMboe of recoverable oil and gas. If WR-B1 is successful, it will be tied into Block's Early Production Facility for processing both oil and gas produced, it said.
Commenting on today’s news, Block Energy’s Chief Executive, Paul Haywood, said: "The drilling of well WR-B1 remains on target and as planned. Reaching the second casing point represents a significant milestone in the successful delivery of this well. The team on the ground has undertaken the drilling operations safely and efficiently and we can now look forward to commencing the horizontal section of the well to the target depth."
Block said technical planning and engineering screening of well candidates are in ‘advanced stages’ to enable it to press forward with its second well after the completion of WR-B1.
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If the spudding of WR-B1 proves successful, WR-B1 will be ‘rapidly tied’ into Block's Early Production Facility, processing both oil and gas produced from the well, it told shareholders.
The drilling results are expected to strengthen Block’s understanding of the Middle Eocene, thereby bolstering its design of a full field development plan, the group highlighted. It added that future drilling will incorporate results and lessons learned from the WR-B1w well.
Block Energy announced back in June 2021 that it had signed an MoU with global energy technology company, Baker Hughes, to support the group’s drilling operations in Georgia.
The company believes that its MoU with Baker Hughes will also provide a broader partnership on developing significant oil and gas opportunities throughout the group’s entire portfolio.
During 2Q21, Block produced 25.7 Mbbls of oil (Q1: 29.8 Mbbls) and 16.9 Mboe of gas (Q1: 14.6 Mboe), resulting in a combined total of 42.6 Mboe of oil and gas (Q1: 44.4 Mboe).
During 2Q21, Block sold 15.6 Mbbls of oil (Q1: 26.3 Mbbls) for $960,000 (Q1: $1,370,000), resulting in a weighted average price of approximately $62 per barrel (Q1: approximately $52 per barrel), which represents an 18% increase in the realised price in Q2 compared with Q1.
In 2Q21, Block's first full quarter of gas sales, it sold 64.6 MMcf of gas (Q1: 38.4 MMcf) for $209,000 (Q1: $123,000) with a weighted average price of c. $3.24/Mcf (Q1: $3.20/Mcf).
As at 30 June 2021, Block had $5.4 million cash at bank (31 March 2021: $6.8 million).
Block holds 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 oil resources and 608 BCF of gross unrisked 2C contingent gas resources in the Middle, Upper and Lower Eocene formations (Source: CPR by Gustavson Associates: 1 January 2018).
In addition, Block also holds 100% and 90% working interests in the onshore oil producing Norio and Satskhenisi fields. In March 2020, it entered into a conditional sale and purchase agreement to acquire a company that owns Georgian onshore licence Block IX and XIB.
In a half-year report to 30 June 2020, the company said it expects gas sales to commence in Q4 from West Rustavi despite the coronavirus pandemic proving “very hard to predict”.
The group’s shut-in of the West Rustavi field's production at wells WR-16aZ and WR-38Z was done to conserve valuable gas resources until the gas sales pipeline is soon completed.
Proceeds from sales of crude oil from its West Rustavi, Norio and Satskhenisi licences were $0.313m during 1H2020 and $0.568m following the period end in August and September.
Paul Haywood, Chief Executive of Block Energy, said, “Block Energy remains strong and agile, with cash on the balance sheet and near-term realisation of its gas reserves.”
He added, “Through these gas sales, we will generate more cash from our production base. We look forward to the remaining months of 2020, to continue our mission of value creation for our shareholders, through growing the business and unlocking Georgia's potential."
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