London-listed junior Block Energy is preparing for additional drilling on its assets in Georgia, after raising funds to bankroll the programme.

Block raised approximately £12 million ($15.4 million) from institutional investors after placing 100 million new ordinary shares at 11 pence per share.

The funds will be used to develop its fully-owned West Rustavi licence, which contains an estimated 38 million barrels of proven and probable oil resources.

“We are delighted to have secured support for an ambitious work programme to develop our West Rustavi licence, the potential of which was confirmed by last month's excellent oil production test rates at well 16aZ of approximately 1100 barrels per day, more than three times higher than forecast,” chief executive Paul Haywood.

The company plans to upgrade the production facilities, which will then provide capacity for production from three new sidetracked wells.

In the fourth quarter, Block will sidetrack West Rustavi well 38, a neighbour and analogue to 16aZ. Two further wells, West Rustavi 30 and 3 will be sidetracked through the first half of next year, and their associated gas discoveries tested, Block said.

“We will acquire a 3D seismic survey this year which will allow us to identify optimal locations for new gas wells and horizontal oil wells to be explored next year. We will also continue our ongoing workover programme at Norio, and have scheduled the field's well 60 for sidetracking later this year,” Haywood said.

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Block eyes more Georgia drilling