UK-listed Block Energy has toasted a key milestone for an onshore oil project in Georgia.
Block said this morning that 200 barrels were recovered during a 10 hour period from an exploration well at the West Rustavi field, with another 300 barrels recovered in the following days.
The prospect is estimated to hold 38million barrels of oil, along with 606 billion cubic feet of gas, with Block holding 25% as part of an agreed earn-in to 75%.
Block will now begin a two-well drilling programme targeting 650 barrels per day by Q1 next year.
West Rustavi is one of three licences the firm holds in Georgia, including the Norio field which has proven reserves of 1.6million barrels of oil.
Chief executive Paul Haywood said: “The recovery of more than 500 barrels of oil from the legacy vertical wellbore at West Rustavi 16a is highly encouraging and bodes well for our horizontal sidetrack programme at the field which is due to begin early next year.
“Having raised £5 million by the time of our IPO we are fully funded to undertake our work programmes at West Rustavi and Norio, which together target a combined 900 bopd net to Block by Q1 2019. With our existing production at Norio selling for Brent minus US$10, a production rate of 900 bopd has the potential to generate circa US$13 million in annual revenues at current oil prices, a level that far outstrips our existing £7 million market valuation.
“And we do not intend to stop at 900 bopd. With four more existing wells identified as suitable sidetrack opportunities at West Rustavi, an inventory of historic wells at Norio, and a potential 28 MMbbl of contingent resources at Satskhenisi, the opportunity to significantly scale our cash flow further is clear.”