Block Energy Plc : MOU Agreed for Hire of Drilling and Workover Rigs

Source Press Release
Company Block Energy Plc 
Tags Exploration, Strategy - Upstream, Upstream Activities
Date September 10, 2018

lock Energy Plc, the exploration and production company focused on the Republic of Georgia, is pleased to announce execution of a non-binding Memorandum of Understanding ('MOU') with Georgia-based drilling contractor, JSC Norio Oil Company ('NOC'), for the provision of a drilling and a workover rig.  Subject to a final agreement, these will be utilised on the 2018/2019  work programmes across Block's three licence areas: Norio (100% working interest), Satskhenisi (90% working interest) and West Rustavi (75% working interest after earn-ins described below) which collectively have net proven oil reserves of 1.5 million barrels plus 61 million barrels of oil and c.473 billion cubic feet ('bcf') of gas classified as net unrisked 2C contingent resources. 

Workover Rig

Subject to a final binding agreement, NOC will provide an A50 workover rig that will be used to undertake a short three well workover programme at Satskhenisi before being moved to the nearby Norio licence where eight candidate wells have been selected for workover. Block is aiming for the eight Norio wells to be completed and on production by Q1 2019. It is anticipated that the rig will also be used at West Rustavi, where two wells will be prepared for side tracks and the re-testing of a legacy gas discovery in the Lower Eocene, a play being targeted on neighbouring licences by Schlumberger, the leading oil and gas services provider and operator. Under an existing agreement, the preparation of the two wells at West Rustavi will trigger an increase in the Company's working interest in the West Rustavi licence to 50% from 25%.

Drilling Rig

In addition, it is planned that NOC's ZJ40 drilling rig will drill two high impact horizontal side tracks in the West Rustavi permit during Q4 2018 / Q1 2019. Targeting initial oil production of c. 600 barrels per day.  The two side tracks will increase the Company's working interest in the West Rustavi licence to 75% from 50%.

Related Party Transaction

NOC is connected to Georgia Oil and Gas Limited ("GOG"), which currently owns 32,762,415 shares in the Company representing 12.64% of Block's current issued share capital.  As such, GOG and NOC are regarded as related parties under the AIM Rules for Companies. Completion of the final agreement relating to matters envisaged by the MOU will be a related party transaction, and subject to the usual Rule 13 requirements of the AIM Rules. It is expected that a final agreement will be announced shortly.

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd