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05 Oct 2018 | 08:38

Block Energy signs agreement to sell gas produced at West Rustavi project

Block Energy said Friday it had signed an agreement with to sell gas to Bago, a private gas suppliers and purchasers in Georgia, at the West Rustavi project in Georgia.

Under the proposed terms of the agreement, Bago would acquire the total amount of gas produced from West Rustavi, above 1,000 Cubic Metres of gas per day.

Bago was considering a proposal to either or part finance the required gas infrastructure for the project, Block Energy said.

A final offtake agreement would be subject to final price negotiation that was expected to be at a similar level to those agreements already in place with neighbouring contractors, Block Energy added.

The final agreement would also be subject to successful gas appraisal work on existing discoveries located within West Rustavi and all relevant government permissions being obtained. Block held a 25% working interest in West Rustavi, which had proven reserves and gross, unrisked contingent resources of 608 billion cubic feet of gas and 37.9m barrels of oil. As well as its holdings in West Rustavi, Block's held a 100% working interest in the Norio licence and a 90% interest in the Satskhenisi licence. A low cost, multi well workover programme was due to commence shortly at Norio and Satskhenisi, as part of the company's strategy to increase net production of oil to 900 barrels of oil a day within 18-to-24 months, the company said. 'I am highly encouraged by progress we have made towards securing a final offtake agreement with Bago, one of Georgia's largest domestic private gas traders with extensive infrastructure capable of handling large volumes of gas,' said Paul Haywood, Director of Block Energy. 'West Rustavi offers huge value potential for Block and with rig contracts now in place, we are all set to commence work programmes to unlock this potential and upgrade resources to proven reserves.'

At 8:38am: (LON:BLOE) Block Energy Plc Ord Shs Gbp0.0025 share price was +0.05p at 3p

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