Block Energy has exited Africa to focus its efforts on the Republic of Georgia.
The company announced this morning that it had sold its Ghanaian assets to Star Goldfields Limited, a private Ghanaian mining company, for $600,000.
The proceeds of the sale will go towards the implementation of low cost work programmes across the company’s portfolio of assets in Georgia to rapidly scale up production and reserves.
The company currently holds three licences in Georgia all of which are proven fields that are either currently producing or have historically produced significant quantities of oil:
Norio field has produced 1.9 million barrels to date and currently produces approximately 15-20bopd
Satskhenisi has produced more than 310,000 barrels of oil and is currently producing approximately 5-10bopd
The West Rustavi Block XIf Permit, which has historically produced 500,000 barrels of oil, has been estimated to hold most likely contingent resources of 38mmbbls of oil and over 600bcf of gas.
West Rustavi shares the same geology and play types as the adjacent Schlumberger’s XIb Permit , where approximately 200 million barrels of light oil have been produced to date
Paul Haywood, director of Block Energy, said: “Today’s sale of our assets in Ghana sees Block Energy become a 100% focused Georgian oil and gas company, one which already has modest production as well as an extensive pipeline of low cost development opportunities.
“Through the implementation of a multi-well workover and sidetrack programme of existing wells, we believe we can increase production to 1,300 bopd within 12 months of the commencement of work.
“At this level, we estimate Block Energy will be generating monthly revenues of US$1.7 million.
“In addition to this we also have proven gas appraisal targets in our portfolio such as the 600bcf West Rustavi gas prospect which the Company believes is a continuation of the gas development plays being targeted by our neighbour, Schlumberger in block XIb immediately to the north.
“The economics for these gas projects are especially compelling and highly material to Block Energy thanks to local gas prices of US$5 per mcf and development costs of <US$1 per mcf.
"Gas development is a high priority of the Georgian government in their strategic drive to gain more energy security for their country. As a result, Block Energy is not only a low risk oil development play but one which also has significant appraisal and exploration potential."