Block Energy PLC (LON:BLOE) W Rustavi Well 16a : test rate exceeds forecast

Chief Executive Officer Paul Haywood said: ‘We are delighted to report such encouraging test results from the first well we have sidetracked at our flagship West Rustavi field, delivering a production rate significantly higher than that initially presented.

Current performance, complemented by the Company’s increased working interest in the licence, looks set to deliver great value to our shareholders.
 

 

Testing rate of 1,100 bbl/d (‘barrels per day’) on a one-eighth inch ( inch) choke significantly exceeds base case production rate

·    Well performance ranks amongst some of the best drilled in Georgia

Block Energy Plc, the exploration and production company focused on the Republic of Georgia, is pleased to announce that production testing at well 16a (‘the well’) at its West Rustavi field (‘West Rustavi’) delivered a test flow rate of an average 1,100 bbl/d versus the previously announced target production rate of 325 bbl/d.

The well test indicates an initial well performance that is better than any well drilled in Georgia in the last 50 years, including the horizontal sidetracks drilled in the Ninotsminda field, near and analogous to West Rustavi.

The well is completed in a horizontal section, 522 metres long, in the Middle Eocene formation with a 4½ inch slotted liner. It was opened on 26 March 2019 and, after a short period of swabbing, began flowing naturally, producing a combination of oil and returned drilling fluid at average rates of 1,500 bbl/d through a ¼ inch choke. During the initial six hour clean-up phase stable wellhead flowing pressures of 500 to 550 psig were observed.

The formal testing programme was started on 30 March 2019, after downhole pressure recorders had been installed, with a six hour flow period on a 5/64 inch choke. After a 12.5  hour shut-in period the well was flowed for 11 hours on an  inch choke. The flow, limited by the capacity of the testing facilities, quickly stabilised to a rate of 1,100 bbl/d through the 2inch tubing with a well head flowing pressure of 590 psig. The well is now shut in for a 72 hour period. On recovery of the downhole gauges pressure transient analysis will be performed and reported by RNS.

Following the current build-up phase the well will be placed on production using the field’s existing test facilities, and the oil trucked to a nearby oil storage facility where it will be stored until sale. The initial production rate will be based on the analysis of the production and pressure build-up tests.

The Company currently has a 71.5% working interest (‘WI’) in West Rustavi, having secured an agreement in February to acquire a 100% WI giving Block full strategic control over the asset’s development (RNS: 26 February 2019: https://bit.ly/2H1Eqt5). The field contains an estimated 38 MMbbls of gross contingent resources (‘2C’) of oil which, consequent to results at 16a, the Company hopes to mature to 2P reserves. In addition, it holds legacy gas discoveries supporting a gross contingent (‘2C’) resource of 608 BCF (Source: CPR).

Chief Executive Officer Paul Haywood said: ‘We are delighted to report such encouraging test results from the first well we have sidetracked at our flagship West Rustavi field, delivering a production rate significantly higher than that initially presented. Current performance, complemented by the Company’s increased working interest in the licence, looks set to deliver great value to our shareholders.

‘Management will now digest this extaordinary result and crystalise a development strategy beyond that already outlined to the market on Well 38. This is truly an exciting time for Block Energy, and we look forward to updating the market shortly.’

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.

For further information please visit http://www.blockenergy.co.uk

 


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