Block Energy, NOC ink MOU for hire of drilling and workover rigs

LONDON -- Block Energy Plc, the exploration and production company focused on the Republic of Georgia, has announced 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 utilized on the 2018-2019 work programs across Block’s three license 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 MMbbl plus 61 MMbbl of oil and c.473 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 license, where eight candidate wells have been selected for workover. Block is aiming for the eight Norio wells to be completed and on production by first-quarter 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 neighboring licenses 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 license 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 fourth-quarter 2018/first-quarter 2019. Targeting initial oil production of ~600 bpd. The two side-tracks will increase the Company’s working interest in the West Rustavi licence to 75% from 50%.