Block Energy assets in Georgia Map source: Block Energy

Block Energy notes that ExxonMobil is set to carry out a comprehensive review of western Georgia's hydrocarbon resource base and potential, following the signing of an agreement with the LEPL State Agency for Oil and Gas of the Ministry of Economy and Sustainable Development of Georgia. 

Block's directors believe the Agreement, which follows the entry into Georgia of leading oil and gas services company Schlumberger, further highlights the growing interest among major oil and gas operators in Georgia's hydrocarbon resources.

Exxon has agreed to build an integrated database of west Georgia's hydrocarbon potential based on the examination of historic geological and geophysical data provided by the Agency. 

In May 2017 Schlumberger gained a 100% owned position in Georgia comprising Production Sharing Contracts ('PSC') for three permits including Block XIb from which 210 MMBbls of oil at rates of up to ~70,000 bopd have historically been recovered. Schlumberger's position is contiguous to the north and south of Block's three licences in Georgia: the Norio field (100% net to Block), the Satskhenisi field (90%) and the West Rustavi permit (currently 25% and building to 75% under an earn-in agreement). All of Block's licences are producing or have historically produced and all have significant development potential: 2P gross oil reserves of 2.5 MMbbl; gross contingent oil resources (2C) of 72.9 MMbbls of oil and 626 BCF of gas.  As announced on 15 October 2018, Block commenced a multi-well workover and sidetrack programme at Norio targeting a 15-fold increase in production to 150 bopd by Q1 2019.  At the same time, Block is preparing to drill horizontal sidetracks and test the gas resource base on its West Rustavi licence with net contingent resources of 456 BCF. Previous gas discoveries at West Rustavi lie on trend to the same play being targeted by Schlumberger on neighbouring fields.

Block Energy Chief Executive Officer Paul Haywood said:
"The Georgian Government's Agreement with Exxon further validates the country's credentials as a secure and stable place to do business, and an emerging hydrocarbon jurisdiction in terms of naturally occurring oil and gas.  Thanks to our positioning and excellent relationships in Georgia, we have already secured a high-quality asset base, which includes multiple low risk development opportunities as well as a huge gas discovery that we estimate is potentially worth US$600 million to Block.  Having raised £5 million at the time of our IPO in June this year, we are well placed to play our part in realising the potential of Georgia's energy industry.  Work is already underway at Norio to increase production to 150 bopd by Q1 2019, and we will drill sidetracks and test the gas discovery at West Rustavi shortly.  With so much activity on the near horizon we look forward to a high-impact newsflow over the coming months."