Block Energy (AIM:BLOE) said its Early Production Facility, a key component in enabling the company to process and sell gas from its West Rustavi field, has arrived on site from Canada.
The Georgia-focused exploration group said the EPF comprises an inlet manifold for six wells, separators and a gas dehydration and measuring unit.
Gas sales are forecast to commence during H2 2020, once the WR-16aZ and WR-38 wells have been tied into the new inlet manifold and the gas sales pipeline has been installed.
Block reported no Covid-19 cases at West Rustavi where its wells have remained shut in since April. The group’s employees continue to sacrifice 40% of their cash salary, taking a deferred cash payment or share options instead, this morning’s statement detailed.
Meanwhile, Georgia has started to ease its restrictive Covid-19 lockdown measures with a phased approach including the re-opening of its borders to foreign travellers in July.
Shares in Block Energy closed at 2.5p on Wednesday afternoon.
The group said it will also be partnering with consultancy EPI Limited (“EPI”) which it believes ‘will add significant value and technical discipline to future oil and gas development programmes.’
“Their expertise will immediately strengthen our current workstreams, whilst defining our next phase of development,” said Block’s CEO, Paul Haywood, who added that the consultancy’s engagement represented “a strong vote of confidence” in Block Energy’s asset base.
In particular, Block said it sees significant potential for the horizontal side-tracking of existing wells, including the appraisal of the PAT-E1 gas discovery drilled by Schlumberger in 2019.
In this case, EPI will help analyse the geological aspects of horizontal well design and the selection and ranking of previously identified opportunities in Block XIB, the group said.
“The newly-formed relationship with EPI will significantly augment our technical capability and enhance the group's ability to define the optimum development programme for the soon-to-be-acquired XIB asset,” said Haywood.
As Block focuses on its balance sheet management and cash conservation, its engagement with EPI is structured to share risk and reward, partly tied to drilling performance and well productivity.
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