Block Energy plc announced it had a strong cash position of $6.8 million as it prepares to drill two wells as part of its 2021 objectives at West Rustavi in Georgia.
OIL AND GAS PRODUCTION
In its operational report for Q1 2021, the company said it was currently producing across all its licences (excluding WR-16aZ well which is undergoing intervention) at a rate of 555 boepd (30-day average).
During Q1 2021, Block produced total of 29.8 Mbbls of oil and 14.6 Mboe of gas.
The average production rate for February and March 2021, after WR-38Z had started production, was 573 boepd (excluding WR-16aZ).
Block said that the rate of production generated sufficient revenues to cover more than 95% of operating and administration costs, leaving most of the company’s existing cash for new wells and facilities.
OIL SALES
During Q1 2021, Block sold 26.3 Mbbls of oil for $1.37m, with some sales included from the inventory of the Block Rustaveli Ltd acquisition (previously owned by Schlumberger).
Since the acquisition on 23 November 2020, Block has sold 30,603 bbls of processed Block XIB crude oil, netting $1.54 million.
This has reduced the cost to the company of acquiring Blocks XIB and IX by a “significant amount” and adds to the balance sheet.
GAS SALES
Block Energy achieved its first gas sales during Q1 2021 and, from 15 February to 31 March, sold 38.4 MMcf of gas for $125k.
DRILL PROGRAMME 2021
For the year ahead, Block Energy’s two new wells will each target 600 boepd.
The first will be a new horizontal well in West Rustavi at WR-BA location, which is expected to spud in May/June 2021.
The well is close to the early production facility, meaning its tie-in will be low cost and fast.
Block will await the results from WR-BA before deciding on a number of options for the second well.
The company has ready a ZJ-40 drilling rig and aims to drill both wells and spud a third well by the end of 2021
WELL INTERVENTION
Well intervention has also started, including WR-16aZ and various Block XIB wells.
Block is executing a “low-cost workover programme” in its newly acquired Block XIB oil fields.
So far, extra production has been gained, more than offsetting the natural decline of the production in Block XIB, said the company.
STAFFING
The integration of Block Rustaveli Limited (BRL) is nearly complete with all 120 employees of the enlarged company in Georgia located at the newly renovated Lilo base.
Block Energy chief executive Paul Haywood said the company’s stronger drilling team and objectives had taken it potentially to the next level.
“We have several options to pursue in the West Rustavi licence, each targeting approximately 600 boepd, and have significant remaining reserves to access in Block XIB.
“We enter the drilling campaign with a healthy balance sheet, as our cash and ongoing oil and gas sales means we can plan a sustainable growth strategy for the company.”