The company recently agreed to take 100% ownership of the West Rustavi field – its flagship asset with “company-making potential”.
West Rustavi has an estimated resource of 38mln barrels of oil and 608bn cubic feet (BCF) of gas. It is part of the same play being targeted by oil giant Schlumberger in a neighbouring field.
Block recently finished drilling well 16a which encountered “significant hydrocarbon shows”, which bodes well for the explorer to hit its target production rate of 325 barrels of oil per day (bopd) from the well.
Assuming a US$60 oil price, that initial rate of production would generate free cash flow of US$3.6mln per annum and pay back the well costs within six months.
Closing in on breakeven at Norio
Testing is ongoing at well 16a but Block is already gearing up to drill the nearby well 38, which is ready for re-entering and sidetracking.
Block is advancing the sidetrack campaign at West Rustavi in parallel with its ongoing multi-well workover programme at its Norio field, where it is incrementally increasing output from existing wells.
The company recently announced that production from Norio had increased four-fold to 60 bopd as it continues to move towards its breakeven production marker of 100 bopd.
First results as a listed company
For the half year to 31 December 2018, Block reported a net loss of £582,000 (H1 17: £416,000).
That was higher than the same period of last year due to an increase in business activities following the ramp-up of operations in Georgia during 2018.
The company incurred a net operating cash outflow of £462,000 (H1 17: £444,000) in the six month period. Cash stood at £1.98mln as of 31 December 2018 of (2017: £81,000).