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Block Energy secures workover equipment for 2019/2020 drilling programme

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Oilfield Technology,

Block Energy has announced that workover equipment has been secured for the company's 2019/2020 back-to-back drilling programme.

This includes multiple high-impact horizontal sidetracks at the West Rustavi licence in Georgia where exceptional production test rates of at least 1100 bpd have been achieved from the 16aZ well, more than three times pre-drill expectations. Earlier this week, the company announced it had entered into an oil storage agreement allowing oil production at well 16aZ to restart (RNS: supporting a significant increase in production.


  • The Agreements ('the Agreements') have been reached with JSC Norio Oil Company ('JSC NOC'), a Georgian drilling contractor, and Georgia Oil and Gas Ltd ('GOG'), a British Virgin Islands company and owner of drilling equipment in the Republic of Georgia.
  • Block will pay JSC NOC and GOG a total of US$750 000 (equivalent to US$2055 per day) for 12 months' exclusive use of a ZJ40 drilling rig, an A50 workover rig and an extensive inventory of drilling and workover-related equipment. This is the same equipment used to successfully drill well 16aZ.
  • Additonally, Block will hire a high resolution flow meter from GOG to aid in the identification of natural fractures during drilling operations for a cost of up to US$100 000.
  • The Agreements supersede the previous contracts Block entered with JSC NOC and GOG last September (RNS:, which expired during April 2019.
  • The rigs and equipment will be used to implement the ambitious work programme announced following the company's £12 million fundraise (RNS: designed to unlock the potential of the West Rustavi licence in which the company intends to exercise its right to increase its Working Interest ('WI') from its current 71.5% to 100%.
  • In addition to well 16aZ, the programme includes the horizontal sidetracking of four other West Rustavi wells targeting historic oil and gas discoveries.

Paul Haywood, Block Energy CEO, said: "We are delighted to enter into new contracts for rigs and drilling equipment with the same Georgian companies from which we hired the equipment last year, again on highly favourable terms. The Agreements give us access to all of the rigs and associated equipment we need to pursue our programme without having to negotiate with individual suppliers or mobilise from abroad, saving the company significant time and cost.

"Last week, we announced an oil storage leasing agreement with Georgian Oil and Gas Corporation, Georgia's state-owned national oil company, allowing us to resume constant production at well 16aZ. We will move the ZJ40 drilling rig onto the sidetracking of West Rustavi well 38, adjacent to and analogous with 16aZ, and go on to sidetrack three of the field's other wells, two of which will also be tested for their historic gas discoveries. We will also acquire a 3D seismic survey to allow us to identify optimal locations for new gas wells and horizontal oil wells across the field, and will expand West Rustavi's surface production facilities to a capacity of 4000 - 5000 bpd.

"We are working hard to put in place the building blocks of our post-fundraise programme. The renewal of our drilling contracts on favourable terms is a key cornerstone. We look forward to updating our shareholders as we enter another exciting time for Block, working through each element of our programme over the coming weeks and months."

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