West Rustavi Early Production Facility Update and Appointment of EPI

Source: www.gulfoilandgas.com 6/18/2020, Location: Asia

Block Energy Plc, the exploration and production company focused on Georgia, is pleased to issue an update on the progress of its West Rustavi Early Production Facility ("EPF"), the re-opening of Georgia's borders, the Company's operations and the engagement of EPI Limited ("EPI"), a leading independent geoscience and geophysical consultancy.

Block Energy's EPF, a key component in enabling the Company to process and sell gas from its West Rustavi field, has arrived on site from Canada. The EPF comprises an inlet manifold for six wells, separators and a gas dehydration and measuring unit. As previously announced, gas sales are forecast to commence during H2 2020, once the WR-16aZ and WR-38 wells have been tied into the inlet manifold and the gas sales pipeline has been installed.

In relation to the Covid-19 pandemic, Georgia is beginning a phased approach to returning to business, with restrictive measures having been relaxed for its citizens. The re-opening of borders to allow foreign travellers to enter the country is expected in July. As at 17 June 2020, Covid-19 cases in Georgia numbered 888 and 14 deaths were associated with the virus. There have been no Covid-19 cases at the Company's operations. Block's wells at West Rustavi remain shut in, as announced on 7 April 2020, and the Group's employees continue to sacrifice 40% of their cash salary, taking a deferred cash payment or share options instead.

Block is delighted to announce the engagement of EPI, whose expertise encompasses geophysical and geological interpretation, petrophysics and reservoir engineering. It is intended that EPI will add significant value and technical discipline to Block's oil and gas future development programmes. The specific service is the provision of an outsourced sub-surface reservoir development department, fully integrated into the Block organisation within an innovative strategic partnership. EPI has an exceptional track record for quality, innovation and success, working with small independents, supermajors and national oil companies in over 90 countries.

Block now has an even more exciting portfolio of assets to evaluate and EPI will be part of the team defining new development well activity in our existing fields, such as West Rustavi, and in our soon-to-be-acquired assets within the Block XIB area. In particular, Block sees significant potential for the horizontal side-tracking of existing wells, including the appraisal of the PAT-E1 gas discovery drilled by Schlumberger in 2019. EPI will bring their expertise to the analysis of the geological aspects of horizontal well design and the selection and ranking of previously identified opportunities in Block XIB, where over 180MMbbls of oil have been produced, with a peak production rate of 67,000 barrels of oil equivalent per day.

As Block Energy's current focus is on balance sheet management and cash conservation, the engagement is structured to share risk and reward, partly tied to drilling performance and well productivity. EPI's commitment to Block further underlines today's value proposition and integrating EPI into the Company has already begun.

Block Energy Chief Executive Officer Paul Haywood said:
"The Block team remains enthusiastically active on many fronts. I am pleased to report the arrival of our West Rustavi Early Production Facility in the field getting us closer to achieving gas sales, a significant milestone for the Company. It is also welcome news that Georgia is easing the Covid-19 restrictions and is forecast to re-open its borders in July.

"We are delighted to welcome the EPI team, whose engagement expresses a strong vote of confidence in our Company's asset base. Their expertise will immediately strengthen our current workstreams, whilst defining our next phase of development. Our Georgian portfolio is an undervalued resource base. The newly-formed relationship with EPI will significantly augment our technical capability and enhance the group's ability to define the optimum development programme for the soon-to-be-acquired XIB asset."

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