Block Energy (BLOE) announced that it has completed drilling operations on the “potentially transformative” WR-B1a well which is targeting an estimated 2.1 MMboe of recoverable oil and gas, meaning it will now progress to test the well within the onshore West Rustavi field.
The Georgia-focused development and production firm explained that the WR-B1 well was initially drilled to a measured depth of 2,180m, encountering hydrocarbon shows higher in the Middle Eocene reservoir than expected. Whilst shows continued to increase in frequency and magnitude, wellbore stability challenges required this section to be re-drilled, it explained.
This has now been successfully achieved, with Block extending the drilling of WR-B1a to 2,483m over a reservoir interval of 478m and after a careful evaluation of the frequency and magnitude of fractured zones penetrated, the Company informed investors that its subsurface team has now decided to call total depth, rather than to extend the horizontal section further.
After encountering multiple shows and indications of hydrocarbon-bearing fracture zones, the well was successfully completed. Drilling operations were also optimised through Block’s strategic partnership with Baker Hughes and the adoption of several drilling technologies.
A 7" pre-perforated liner with fracture-isolating swellable packers was set down to a measured depth of 2,161m and a 4½" slotted liner extends from 2,161m to 2,483m. The reservoir was encountered within 2m of the prognosed depth, having used the latest 3D-seismic technology.
Preparations for rigging down the ZJ40 drilling rig are now underway, to enable the installation of the Christmas tree over the wellhead. Following this, a production test will then commence.
Block believes that the WR-B1a well, which is targeting an estimated 2.1 MMboe of recoverable oil and gas, is “potentially transformative”. In the event of a commercial well, production from the well will be tied into Block’s Early Production Facility for processing.
The Company also highlighted to investors that preparations are already underway for Block's second well of its 2021 drilling programme. It added that more details were to follow ‘shortly.’
Block’s CEO, Paul Haywood, said: "We are delighted to announce the safe completion of drilling operations on well WR-B1a, whereby zero LTIs were recorded out of a total 280,000 man-hours worked this year, against the added challenges presented by Covid-19.
The operational team in Georgia has made significant progress with drilling operations on well WR-B1a, allowing the Company to now progress to the testing phase. It is well known that the Kura basin is a complex and challenging drilling environment and to have successfully reached TD is a solid reflection of Block's capacity to undertake such operations.”
He said that if the WR-B1a well proves to be commercially viable, which it hopes to establish soon, Block could readily realise the return on its investment in well WR-B1a, having established Early Production Facilities, which will enable rapid monetisation of both oil & gas.
Haywood added, “The Company continues with its activity on many fronts, including preparations now underway for the drilling of the second well in the campaign".
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In July 2021, Block said the drilling of the WR-B1 well within its West Rustavi onshore oil and gas field had reached the 9 ⅝" casing point and remained “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.
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.
In addition, Block believes that its MoU with Baker Hughes will 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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