Increased production rates at Norio field, Georgia
Block Energy Plc | Index: AIM "ay">· Significant increase in production rate at Norio wells 44 and 27, moving the combined current production rate at the Norio and Satskhenisi fields towards 60 bopd, a four-fold increase
· Preparatory work underway at Norio well 39 targeting a production rate of 10 bopd
· Current results, support the Company's intention to begin workover operations at the currently producing Norio well 31
Block Energy Plc, the exploration and production company focused on the Republic of Georgia, is pleased to report an increase in production rate at its 100%-held Norio field, where the Company is implementing a multi-well workover programme.
The oil production rate at Norio 44 has increased signficantly over the past five days, rising daily to reach 21 bopd on the most recent day for which figures were available (Wednesday 6 March 2019). The Company's initial forecast for the well was 15 bopd.
The well was re-entered and logged in October 2018, and three intervals penetrated with a specialist micro-drilling tool ('the Micro-Drilling Tool' or 'the Tool') chosen by Block to meet the specific challenges presented by the oil bearing formations within the Company's assets. When the first of the three intervals was penetrated 45 barrels of sweet crude oil were recovered during a five hour period, indicating both the Micro-Drilling Tool's effectiveness and the well's potential (RNS: 14 January 2019: https://bit.ly/2H9msFB).
The Tool has also been applied to Norio 27 where, following extensive work to clean and correct the borehole, 20 horizontal holes of approximately six feet were successfully drilled in a single run. The well has tested at 26 bopd, a rate exceeding the Company's initial forecast of 17 bopd.
Norio 39, where the Company is targeting a production rate of approximately 10 bopd, has also been perforated. A further update will follow after the well has been put on production.
The work at wells 44 and 27 moves the combined current production rate at Norio and Satskhenisi towards 60 bopd, a four-fold increase taking the Company to 60% of its breakeven target of 100 bopd (assuming a crude oil price of USD 60/bbl Brent). The Company now looks forward to commencing workover operations at Norio 31, which is currently producing approximately 10 bopd. The well, which initially tested at 800 bopd when first drilled in 1950, has since been a consistent producer, and has produced more than 400 Mbbls during its lifetime.
The Company's ongoing operations in the field continue to yield valuable insights into how best to unlock Norio's potential, particularly in regard to the identification of new workover candidates. Norio has gross 2P oil reserves of 1.631 MMbbls (Source: CPR completed by Gustavson Associates, 1 January 2018 ('CPR')).
Block is pursuing the Norio workover programme in parallel with operations at its West Rustavi field, where a horizontal sidetrack is being drilled in well 16a targeting a base case production rate of 325 bopd.Last week the Company secured an agreement to increase its working interest ('WI') in the asset from 25% to 100%, giving Block full strategic control over the development of the field (RNS: 26 February 2019: https://bit.ly/2H1Eqt5). In addition to an estimated 38 MMbbls of gross contingent resources ('2C') of oil, West Rustavi holds legacy gas discoveries which support a ('2C') contingent resource of 608 BCF (Source: CPR).
Chief Executive Officer Paul Haywood said: 'Our encouraging progress at Norio testifies to the skill, experience and dedication of our operations team as they work towards unlocking the field's potential. We took time to find the right people and source the right technology to meet the technical challenges inherent in re-entering wells first drilled in the 1940s and 50s. We've worked hard to prepare the wellbores of our workover candidates to ensure access to the most promising horizons, following a methodical process that is now bearing fruit.
'In parallel with the Norio recompletions the Company continues to progress its sidetracking operations at West Rustavi well 16a and expects to start drilling the 600m horizontal section within the next few days. Achieving the well's base case initial production forecast of 325 bopd would be sufficient to move the Company well above its corporate production breakeven rate. We look forward to further updates as we continue to realise the value of our assets.'
Roger McMechan, Technical Director, has reviewed the reserve, resource and production information contained in this announcement. Mr McMechan has a BSc in Engineering from the University of Waterloo, Canada and is a Professional Engineer registered in Alberta.
This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation which came into effect on 3 July 2016.
**ENDS**
Further information
For further information please visit http://www.blockenergy.co.uk or contact:
|
Paul Haywood (Chief Executive Officer) |
Block Energy Plc |
Tel: +44 (0) 203 053 3631 |
|
Neil Baldwin (Nominated Adviser) |
Spark Advisory Partners Limited |
Tel: +44 (0) 203 368 3554 |
|
Craig Fraser (Joint Corporate Broker) |
Baden Hill LLP |
Tel: +44 (0) 207 933 8731 |
|
Colin Rowbury (Joint Corporate Broker) |
Novum Securities Ltd |
Tel: +44 (0)207 399 9427 |
|
Frank Buhagiar/Juliet Earl (Financial PR) |
St Brides Partners Ltd |
Tel: +44 (0) 207 236 1177 |
Notes
Block Energy (BLOE.L) is an AIM quoted oil and gas company with a growing portfolio of production, development and exploration assets in the Republic of Georgia. Block holds a 100% WI in the producing Norio licence, a 90% WI in the producing Satskhenisi licence and a 25% WI in the West Rustavi licence, with an agreement to take a 100% WI.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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