Shares rally as oil producer Block Energy hits gold

Shares in Aim’s Block Energy have surged 60% after the oil explorer announced testing at a well in the Republic of Georgia had exceeded expectations.

Block Energy said production testing at well 16a in the West Rustavi field delivered a test flow rate of an average of 1,100 bbl/d. The previously announced target production rate was 325 bbl/d.

The company added: “The well test indicates an initial well performance that is better than any well drilled in Georgia in the last 50 years.”

Shares in Block Energy were trading up 2.32p at 6.22p by 1600 BST.

Chief executive 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 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 extraordinary result and crystallise a development strategy beyond that already outlined to the market.”

Block Energy currently has a 71.5% working interest in the West Rustavi field, but secured an agreement in February to acquire a 100% working interest.