Projects
Block Energy’s assets in Georgia blend production with development and exploration potential.
- Our West Rustavi (100% working interest), Norio (100%), and Satshenisi (90%) licences are a significant resource and reserve base in a low cost, stable fiscal regime
- In November 2020 we concluded a transformative sale and purchase agreement with Schlumberger to acquire two new blocks neighbouring our existing assets
- Block XIB has produced over 180 million bbls of oil from the Middle Eocene, peaking in the mid-1980s at 67,000 bopd
- Exploration Block IX has 38 legacy wells with two drilled wells with oil and gas shows
- The agreement boosts Block's 2P reserves of oil and gas by 64 million boe and initial production by around 200 bopd
- Potential of 100% owned West Rustavi licence confirmed by encouraging oil production test rates at well WR-16aZ
- Currently appraising 3D seismic survey of West Rustavi undertaken in 2019
- Positioned to serve the energy demand of Georgia's fast growing economy
- Low-cost services available in close proximity to all assets – Block is partnered with Georgia Oil and Gas Limited, one of Georgia’s most respected oil companies and biggest licence owners
Key Facts on Blocks XIB & IX
Highlights
- 64 million boe of 2P reserves of oil and gas
- Block XIB (615 km2) is Georgia's most productive block, with over 180 million bbls of oil produced from the Middle Eocene, peaking in the mid-1980s at 67,000 bopd
- Block XIB offers a cost recovery pool of around US$133 million
- Exploration Block IX (1,925 km2) has 38 legacy wells with two drilled wells with oil and gas shows
- Approximately 600 BCF of initial-gas-in-place in the Lower Eocene and Upper Cretaceous
- 2C contingent resources of 29 million boe, offering significant upside potential of 245 million boe of prospective resources
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The acquisition of Blocks XIB and IX was completed in November 2020 through options over share capital to conserve Block's cash reserves
- Central production facility with storage for 36,000 barrels of oil, a workshop, a laboratory, and a compound with an office and warehouse
- The permits share synergies with Block's other operations
- Minimum work programme completely fulfilled on Block XIB and Block IX
- A term of 12 years remaining on both permits with possible extensions of five year
West Rustavi Onshore Oil and Gas Field
Company-making oil and gas potential
- 100% working interest
- 36.5 km2 with multiple wells that have tested oil and gas from multiple geological horizons
- A high-quality 3D seismic survey covering the entire licence was processed in Q1 2020 using a state of the art processing sequence
- The interpretations derived from the exceptionally high quality seismic dataset will identify high-grade future development well targets
Proven oil field
- Has produced 41 Mbbl light sweet crude with remaining 0.9 MMbbls gross oil reserves in the Middle Eocene
- 38 MMbbls of gross unrisked 2C contingent oil resources in Middle, Upper and Lower Eocene (condensate)
- First horizontal sidetrack WR-16aZ tested up to 1,040 bbl/d from the Middle Eocene – more than three times higher than 325 bbl/d target
- $36/bbl netback at $65/bbl Brent – $16.6 NPV10 per barrel
Attractive PSC licence terms
- Very low cost production and good fiscal terms: 25(+5) year term effective from 1 September 2018 with CPR to be updated once 3D seismic programme completed and interpreted
- Industrial gas market less than 10 km at Rustavi industrial complex
- No taxes or discovery bonus applicable
Company-making gas resource
- 608 BCF gross unrisked 2C contingent gas resource target in the Eocene/Cretaceous – vertical wells tested at 1-1.5 MMscf/d
Strategy
- Horizontal sidetracks at up to five wells to scale up oil production and fund future capital programmes
- Appraise two of the field’s existing gas discoveries and drill a new gas well
Reserves and Future Cash Flow Projections, West Rustavi
| Gross Oil Reserves, Mbbls | Net Oil Reserves, Mbbls | Net Cash Flow, MM$ | NPV10, MM$ | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reserve Classification | P90 1P | P50 2P | P10 3P | P90 1P | P50 2P | P10 3P | P90 1P | P50 2P | P10 3P | P90 1P | P50 2P | P10 3P |
| Producing | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Developed Non-Producing | 470.8 | 906.8 | 1,606.2 | 210.7 | 347.8 | 565.2 | 6.1 | 13.6 | 25.6 | 4.1 | 9.6 | 18.4 |
| Undeveloped | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total | 470.8 | 906.8 | 1,606.2 | 210.7 | 347.8 | 565.2 | 6.1 | 13.6 | 25.6 | 4.1 | 9.6 | 18.4 |
Based on completion of farmin for 75% working interest. Net is net of government share and partner’s interests. (Mbbls = thousand barrels of oil; MM$ = millions of US$).
Source: CPR Gustavson Associates: 1 January 2018.
Gross Unrisked Contingent Resource Estimates, West Rustavi
| Contingent Oil/Condensate Resources, MMbbls | Contingent Associated/Free Gas Resources, BCF | Risk Factor | ||||
|---|---|---|---|---|---|---|
| P90 1C | P50 2C | P10 3C | P90 1C | P50 2C | P10 3C | |
| 18.6 | 37.9 | 69.3 | 314 | 608 | 1,000 | 75% |
MMbbls = million barrels of oil; BCF = billion cubic feet.
Source: CPR Gustavson Associates: 1 January 2018.
Norio Onshore Oil Field
Low cost production and development with established facilities and marketing process
- 100% working interest
- Low cost production and development with established facilities and marketing process
- 35 km from the centre of Tbilisi, requiring low-capex recompletions of existing wells and new horizontal wells to significantly increase existing production
- Storage facilities onsite, well maintained and in use, and currently using a fraction of their capacities
Proven oil field
- 1.8 MMbbls of light sweet crude oil produced to date
- Specialist drilling tool used to increase production during ongoing recompletion programme
Significant reserve/resource potential
- 1.6 MMbbls of gross 2P oil reserves
- 7.2 MMbbls gross unrisked 2C contingent oil resources
Attractive PSC licence terms
- Operating costs recovered 100%
- Of remaining production Block retains 50% as cost oil and the residual profit oil is split 50:50 with the state during cost recovery phase
- Terms are valid until 2026 with optional five year renewal
Reserves and Future Cash Flow Projections, Norio
| Gross Oil Reserves, Mbbls | Net Oil Reserves, Mbbls | Net Cash Flow, MM$ | NPV10, MM$ | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reserve Classification | P90 1P | P50 2P | P10 3P | P90 1P | P50 2P | P10 3P | P90 1P | P50 2P | P10 3P | P90 1P | P50 2P | P10 3P |
| Producing | 28.1 | 32.7 | 37.2 | 16.4 | 21.7 | 28.5 | 0.2 | 0.2 | 0.4 | 0.1 | 0.2 | 0.3 |
| Developed Non-Producing | 65.8 | 93.0 | 167.5 | 61.6 | 80.9 | 133.5 | 1.0 | 2.3 | 5.7 | 0.6 | 1.5 | 3.8 |
| Undeveloped | 805.2 | 1,505.3 | 2,328.6 | 603.5 | 1,005.2 | 1,334.9 | 20.0 | 43.1 | 61.3 | 10.9 | 27.8 | 41.0 |
| Total | 899.2 | 1,630.9 | 2,533.3 | 681.8 | 1,107.8 | 1,496.9 | 21.2 | 45.6 | 67.4 | 11.6 | 29.5 | 45.1 |
For 100% working interest. Net is net of government share. (Mbbls = thousand barrels of oil; MM$ = millions of US$).
Source: CPR Gustavson Associates: 1 January 2018.
Gross Unrisked Contingent Resource Estimates, Norio
| Contingent Oil/Condensate Resources, MMbbls | Contingent Associated/Free Gas Resources, BCF | Risk Factor | ||||
|---|---|---|---|---|---|---|
| P90 1C | P50 2C | P10 3C | P90 1C | P50 2C | P10 3C | |
| 3.1 | 7.2 | 13.9 | 0.8 | 1.9 | 3.7 | 75% |
MMbbls = million barrels of oil; BCF = billion cubic feet.
Source: CPR Gustavson Associates: 1 January 2018.
Satskhenisi Onshore Oil Field
Cumulative production 500,000 bbl from vertical wells drilled 1956-1964
- 90% working interest
- Production from the Maikop and shallow Sarmatian lithologies
- Maikop is believed to have considerable unconventional potential
- Similar geological setting and formations to Norio
- Learnings from one permit apply to the other
- 2D seismic acquired over last 20 years
- Reprocessed in 2014
- Well depths 600-1500m
Proven oil field
- Currently producing circa 6 bopd and cash flow positive
- Norio results to inform forward plan for Satskhenisi
- Significant reserve/resource potential
- circa 14 Mbbls of gross 2P oil reserves
- 27.8 MMbbls gross unrisked 2C contingent oil resources
- 16.4 BCF gross unrisked 2C contingent gas resources
Attractive PSC licence terms
- Operating costs recovered 100%
- Of remaining production Block retains 50% as cost oil and the residual profit oil is split 50:50 with the state during cost recovery phase
- Terms are valid until 2026 with optional five year renewal
Reserves and Future Cash Flow Projections, Satskhenisi
| Gross Oil Reserves, Mbbls | Net Oil Reserves, Mbbls | Net Cash Flow, MM$ | NPV10, MM$ | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reserve Classification | P90 1P | P50 2P | P10 3P | P90 1P | P50 2P | P10 3P | P90 1P | P50 2P | P10 3P | P90 1P | P50 2P | P10 3P |
| Producing | 4.4 | 4.4 | 4.4 | 2.3 | 2.3 | 2.4 | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 |
| Developed Non-Producing | 7.2 | 9.4 | 12.9 | 5.6 | 7.3 | 10.3 | 0.19 | 0.26 | 0.39 | 0.16 | 0.2 | 0.29 |
| Undeveloped | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total | 11.6 | 13.8 | 17.3 | 7.9 | 9.6 | 12.7 | 0.22 | 0.29 | 0.42 | 0.18 | 0.23 | 0.32 |
For 90% working interest. Net is net of government share. (Mbbls = thousand barrels of oil; MM$ = millions of US$).
Source: CPR Gustavson Associates: 1 January 2018.
Gross Unrisked Contingent Resource Estimates, Satskhenisi
| Contingent Oil/Condensate Resouces, MMbbls | Contingent Associated/Free Gas Resouces, BCF | Risk Factor | ||||
|---|---|---|---|---|---|---|
| P90 1C | P50 2C | P10 3C | P90 1C | P50 2C | P10 3C | |
| 16.4 | 27.8 | 43.7 | 9.3 | 16.4 | 26.5 | 75% |
MMbbls = million barrels of oil; BCF = billion cubic feet.
Source: CPR Gustavson Associates: 1 January 2018.