Block Energy Secures Storage Agreement to Allow Oil Production to Restart

Source: www.gulfoilandgas.com 7/1/2019, Location: Asia

Block Energy Plc, the exploration and production company focused on the Republic of Georgia, is pleased to announce it has entered into an oil storage leasing agreement ('the Agreement') with Georgian Oil and Gas Corporation ('GOGC'), the state-owned national oil company of Georgia, that will allow oil production to restart in approximately 7 days, at the Company's West Rustavi field ('West Rustavi').

The Agreement secures for the Company immediate access to up to 90,000 bbls of storage capacity at GOGC's main facility near the town of Sartichala, located some 30 km from West Rustavi and readily accessible from the Khakheti motorway that runs by the field, one of Georgia's main transport arteries. Removing oil storage limitations is a critical element in Block's fully-funded back to back drilling programme, which has been designed to ramp up existing oil production and advance a contingent gas resource of over 600Bcf.

The next step in the Companys programme includes sidetracking of the adjacent and analogous well 38, and three of the field's other wells, two of which will also be tested for their historic gas discoveries. In parallel to the immediate drilling programme, a 3D seismic survey will be acquired to identify optimal locations for new horizontal oil and gas wells across the field.

Paul Haywood, Block Energy Chief Executive Officer said: 'We are delighted to have secured first-class oil storage capacity at competitive rates close to West Rustavi, at a major facility where GOGC safeguards some 350,000 bbls on behalf of several well-established operators. We can now allow well 16aZ to flow to its full potential, opening the prospect of excellent netbacks of US$36/bbl at US$65/bbl Brent and US$3.40/MCF for gas.

'We are preparing a detailed operations update which we look forward to sharing with the market shortly, setting out our busy schedule for the next 12 to 18 months.'

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.


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