LONDON (ShareCast) - (Sharecast News) - Exploration and production company Block Energy announced on Tuesday that the production sharing contract (PSC) terms for its West Rustavi licence have been accepted by the government of the Republic of Georgia.
The AIM-traded firm holds a 25% working interest in West Rustavi, which it said had proven reserves and gross, unrisked contingent resources of 608 BCF gas and 37.9MMBbls of oil.

It said the PSC would become effective on 1 September, and would allow Block to conduct planned operations within the licence area.

As it had previously announced, service inspections for one workover rig and one drilling rig were complete, with final negotiations for contracts underway ahead of mobilisation to Block's licence areas.

Drilling of the first high impact horizontal side-track was expected to commence during the fourth quarter of 2018, and to be completed and on production by early in the first quarter of 2019.

Initial oil production from the well was forecast to be approximately 300bbls per day, and Block had identified four other existing wells that could be re-entered and side-tracked in a similar manner.

"We are delighted to have received the production sharing contract for West Rustavi which will allow us to hit the ground running with our high-impact work programme," said Block Energy director Paul Haywood.

"With multiple discoveries already made within the licence which lie on trend with the same play currently being drilled by Schlumberger on neighbouring licence, West Rustavi represents significant development potential and value uplift for the company.

"I look forward to updating shareholders as further progress is made."

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