Block Energy spuds WR-B1 well at West Rustavi field
(BLOE ) announced that it has initiated its latest drilling campaign in Georgia with the spudding of WR-B1 on its West Rustavi field which occurred on Wednesday.
The well will target the West Rustavi Middle Eocene reservoir with a horizontal section c.800m long which will be completed with a production packer and a slotted horizontal liner fitted with external swellable packers to provide water shut off capability, Block noted.
The company highlighted that the WR-B1 well, which will target 2.1 million barrels of oil equivalent (MMboe) of recoverable oil and gas, will be the first well to be drilled using the data from the 3D-seismic survey acquired over the West Rustavi licence area back in 2019.
If the spudding of the well 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 Georgian-focused development and production company said its drilling team, in collaboration with Baker Hughes reservoir technical services team, had conducted a geomechanical study to de-risk potential operational challenges in preparation of drilling.
Addressing shareholders, it said ‘To ensure safe wellbore construction, particular attention has been paid to drilling fluids and cementing design due to potential faults and fractures.’
The well placement has been optimised to maximise hydrocarbon recovery and the time to drill and the execution risk have been optimised with detailed engineering. Rotary steerable systems and logging-while-drilling will also be deployed, which are firsts in Georgia.
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 said technical well planning and engineering screening of several well candidates are in advanced stages. The Group said it is committed to adding ‘significant production to its operations through a combination of new wells and re-entry and side-track of existing wells.’
Commenting on the spud Block Energy's Chief Executive, Paul Haywood said: “On success, the WR-B1 well will be rapidly tied into our production facilities and significantly boost our production in Georgia. I look forward to updating the market further as we progress.”
Block Energy is an oil and gas company focused on production and development in Georgia. The Company believes that it offers ‘a clear entry point’ for investors to gain exposure to Georgia's growing economy and the strong regional demand for oil and gas.
The Company believes that its activity offers ‘a clear entry point’ for investors to gain exposure to Georgia's growing economy and the strong regional demand for oil and gas.
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Block Energy announced earlier this month 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.
Shares in Block Energy, which have increased by 10% in value over the past month, were trading 3.64% higher this morning at 2.85p following the news of the spudding of WR-B1.
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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