Block Energy plc plans to drill a sidetrack using directional pilot ‘slim hole’ technology in late September-October on the West Rustavi/Krtsanisi field, onshore Georgia.
FARM-OUTS
Operations, funded from existing cash resources, are part of project I, one of four running simultaneously in the company’s portfolio.
Block said that the technology would be used for the first time in Georgia and expects drilling and completion costs of around 40% of previous conventional sidetracks in the project.
“The well is being drilled as a pilot for the company’s ‘slim hole’ technology.
“If successful, it has the potential to unlock significant additional low-cost drilling opportunities across projects I and II.”
Block’s current production rates are of approximately 480 barrels of oil equivalent per day, based on July’s average, and it remains operationally “cash-flow positive.
Farm-out talks continue on all the projects.
The company’s project I focuses on developing oil production from the Middle Eocene reservoir of the West Rustavi/Krtsanisi field.
ERCE estimates are of gross 3P reserves of 3.01 million barrels of oil and Block’s internal contingent resources estimate for the entire field is 19.5 MMbbl 2C.
Project II aims to redevelop the Middle Eocene reservoir of the Patardzeuli and Samgori fields.
Block assigns gross 2C contingent resources of 235 MMbbl, with further potential in the Upper Eocene reservoirs within the area.
Project III concentrates on the undeveloped gas-bearing natural fracture system within the Lower Eocene and Upper Cretaceous reservoirs, each one-kilometre thick, across blocks XIB and XIF.
Independent estimates of the Lower Eocene and Upper Cretaceous reservoirs in the Patardzueli-Samgori field show more than one trillion cubic feet of 2C contingent resources.
The company said that farm-out talks were progressing, including advanced due diligence with “multiple parties”.
Project IV involves further exploration on all Block’s licences, while the XIQ licence is also subject to farm-out negotiations with a “leading international” exploration and development company.
The company already has a 2023 farm-out agreement with Georgia Oil and Gas Ltd (GOG) over the Markopi Terrace prospect.
New opportunities are under evaluation and Block might exercise its option to acquire a 20% working interest in the XIH production sharing contract, awarded to GOG.
The company is also looking at other international opportunities.
Operations on its carbon capture storage projects are due to begin this quarter.