Block Energy Eyes Farm-Out of Georgia Asset
Block Energy plc has announced that Project III in the onshore fields of Georgia is ready to support a farm-out plan at the asset level.
Block is adjusting its strategy to “accelerate the significant commercial opportunity offered by Project III, focused on the multi-TCF [trillion cubic feet] undeveloped gas resource within the Lower Eocene and Upper Cretaceous reservoirs of Blocks XIB and XIF”, it said in a recent London Stock Exchange announcement. The two blocks contain internal estimates of 984 billion cubic feet of 2C contingent resources, the company said.
Block has designed a multi-stage appraisal and development plan that is being used to facilitate discussions with possible partners regarding the broader development of its assets in Georgia, including a farm-out of Project III, according to the release.
"I would like to thank the entire Block team for their continued effort and focus, which has supported the safe delivery of this year's plan and ensured we remained cashflow positive while allocating capital to advance our high-impact Projects III and IV”, Block CEO Paul Haywood said. “Our strategy is now evolving to accelerate the delivery of value from the company's high-impact projects which, in addition to Projects III and IV, include Project II, where the team continues to advance plans for secondary recovery that promise to trigger yet another high-impact and near-term CF farm-out process, supported by a CCS pilot program. This shift in focus also allows us to restructure our cost base and set our Project I program within the context of our wider strategy”.
"The company remains focused on delivering a quantum leap for our shareholders and has an extremely busy first quarter planned in 2024, when we will continue to implement our strategy, which is being funded by current cashflows, Haywood added.
In 2023, Block completed an integrated full field development study of the Lower Eocene and Upper Cretaceous reservoirs, identifying gas-bearing natural fracture systems spanning the Company's XIB and XIF blocks across three fields, which included reinterpreting two 3D seismic surveys, well design and planning, third-party conceptual development engineering and cost estimation of a pilot scheme and full field processing facilities. Block also signed a memorandum of understanding with the State of Georgia to support commercialization of the company's Project III gas resources.
Block said it is also currently completing a study on a potential carbon capture and storage (CCS) project throughout XIB, integrated into Project III development plans, supporting the company's longer-term sustainability goals.
The company noted that growing industry interest in Georgia is spurring an increase in exploration activity. Block said that the Chinese state-owned integrated energy group CNPC has been contracted to deliver a firm work program comprising two deep wells, using a modern rig and a full suite of integrated services in an onshore location between the Black Sea and Block's Project III. “Positive results from this work program would have an instant read-through to the value of Project III, which stands to benefit from access to a drilling rig and integrated services capable of drilling deep directional wells promising to reduce mobilization and demobilization time and costs”, the company said.
Block added that it is considering drilling additional Project I wells next year as it advances its farm-out strategy.
Block is an independent oil and gas company focused on production and development in Georgia and has a 100 percent working interest in Georgian onshore license blocks IX and XIB, which it said was Georgia's most productive block. The Company has a 100 percent working interest in license block XIF containing the West Rustavi onshore oil and gas field. It also holds 100 percent and 90 percent working interests respectively in the onshore oil producing Norio and Satskhenisi fields.
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