Block Energy (BLOE ) says gas sales have commenced from the KRT-39 well located in the Georgian-based onshore licence Block XIB, which the development and production company says will provide “a dual benefit” to the business and the wider community around its assets.
Prior to Block acquiring Block XIB, the associated gas produced (currently 140,000 scf per day) from KRT-39 has been flared. Its monetisation is expected to reduce Block’s environmental footprint in Georgia as part of its strategy to minimise carbon emissions.
The sale of gas from KRT-39 commenced following the installation of two gas separators and the construction of a 4.2km pipeline to the Company’s early production facility (“EPF”).
Since acquiring the licence block in November 2020, it has been one of the Company’s goals to monetise gas associated with oil production from Block XIB, the firm outlined to investors.
In the case of West Rustavi in Block XIF, Block commenced gas sales in February 2021, following the installation of the EPF and the construction of a gas gathering flow line.
Meanwhile, preparatory operations, utilising the ZJ-40 drilling rig, for the JKT-01 sidetrack, the next well in the fully funded drilling campaign, are making ‘good progress’, Block reported.
The company informed investors that the spudding of the well is expected during early December 2021 and that further operational updates will be provided ‘in due course.’
Block Energy’s Chief Executive Officer, Paul Haywood, commented: “Commencing gas sales from well KRT-39 provides a dual benefit to the Company and the wider community around Block’s assets. It supports our ambition to create a sustainable energy company that minimises its environmental footprint while supporting the energy demands of Georgia.
It also delivers a further stream of revenue that can be reinvested into supporting operations and creating future value for shareholders. Furthermore, the infrastructure now in place will enable the rapid monetisation of any associated gas produced from the JKT-01 sidetrack.”
He added, “I am pleased with the operational progress at the wellsite of JKT-01, and with the technical design of landing the horizontal completion high in the Middle Eocene, where multiple fracture corridors are expected to provide the best chance of high productivity.”
During 3Q, well WR-B1a was successfully drilled to a total depth of 2,483m, penetrating 478m in the target Middle Eocene reservoir in the West Rustavi field. Until recently, the well was undergoing clean-up operations to recover drilling mud components from certain fractures.
Block has 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.
Block said the drilling of the well has benefitted from its partnership with Baker Hughes, signed in June this year, as well as the high-quality 3D-seismic data obtained in 2019.
Following the interim installation of a rod pump, which was installed by the company to clean-up operations at the 1R-B1a well, the Georgian-focused production firm said the WR-B1a well has produced an average of 50 barrels of oil per day over the last eight days.
At this rate and current oil price, the WR-B1a well is expected to generate $1m in cash revenue to Block per year, in addition to baseline production estimates outlined last month.
Following the deliberate drilling of WR-B1a into a less fractured zone, Block said a greater understanding of the reservoir has now informed the placement of the JKT-01 wellbore, in order to change the orientation to target the larger fractures observed in the attribute analysis.
Looking ahead, Block said the JKT-01 side-track well is fully-funded and ‘on target’ to commence drilling in the second half of November. The drilling rig is on the newly refurbished wellsite, and undergoing a final planned rehabilitation before drilling operations commence.
As at 30 September 2021, the Company had $2.7m cash at bank (30 June 2021: $5.5 m).
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