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MOU Agreed for Hire of Drilling and Workover Rigs
MOU Agreed for Hire of Drilling and Workover Rigs.
About this update from Block Energy Plc
[{"type":"text","content":"\n \nRNS Number : 1990A Block Energy PLC 10 September 2018 \n\nBlock Energy Plc / Index: AIM / Epic: BLOE.L / Sector: Oil and Gas\n10 September 2018\nBlock Energy Plc ('the Company' \"Block\" or 'the Group')\nMOU Agreed for Hire of Drilling and Workover Rigs\n \nBlock 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. \n \nWorkover Rig\nSubject 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%.\n \nDrilling Rig\nIn 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%.\n \nRelated Party Transaction\nNOC is connected to Georgia Oil and Gas Limited (\"GOG\"), which...