Block Energy starts drilling next West Rustavi well

The AIM-traded company said the well would target a fracture system, identified by a high-density of seismic attribute lineations, on the west side of the Krtsanisi anticline on the West Rustavi oil field.

It said the well would be drilled about 500 metres to the west and up-dip of well JKT-01Z, which had been on continuous production for almost a year, with cumulative volumes of more than 73,000 barrels of oil equivalent.

Well WR-B01 ST is part of Project I, which was focussed on the development of the Middle Eocene reservoir within West Rustavi-Krtsanisi.

The well was being funded from the company's cash reserves and ongoing cash flows.

Block said its 2022 competent person's report ascribed 3.01 million barrels of 3P reserves, with a net present value of $57m, to just a portion of the West Rustavi-Krtsanisi Middle Eocene reservoir.

The company's contingent resource report ascribed a total of 19.5 million barrels of 2C contingent resource to the whole of the West Rustavi-Krtsanisi area.

“The spudding of this well represents another solid step forward for Block and further progress on the company's core Project I strategy to deliver meaningful near-term revenues and cash flows, and further value for shareholders. It comes on the back of a farmout of two portions of the company's XIB licence, which adds material exploration upside to Block at no immediate cost,” said chief executive officer Paul Haywood.

“We look forward to providing shareholders with further updates on well WR-B01 ST as progress is made, and we also look forward to reporting on JSR-01 DEEP, where testing continues.”

At 1223 GMT, shares in Block Energy were up 1.76% at 1.27p.

Reporting by Josh White for Sharecast.com.