Australia listed Skyland Petroleum announced a gas discovery in Georgia on its license Block XIG on the outskirts of the capital, Tbilisi.
Skyland, which holds 20% interest in the project, said July 7 that testing the exploration Kumisi-2 well had resulted in gas flow with good pressure from the Lower Eocene interval. The well reached a total depth of 2,357 metres.
This has significantly de-risked this prospect and gas produced to surface during the testing programme proves the presence of gas in the licence area, the company said adding that no precise flow rate could be measured at this time.
Skyland is in discussions with the operator – Georgia Oil and Gas – for the next steps on this discovery well, while saying that “this stage of testing has been completed.”
“We are very encouraged by the discovery of gas from this well. Although further work will be required to establish the full potential, given the location of the well and adjacent infrastructure, any commercial development of gas within the licence area should be relatively simple,” Skyland CEO Mark Sarssam said.
Kumisi-2 lies about 10 km from the Georgian capital of Tbilisi and prior to drilling was claimed to hold a best estimate prospective resource of 319bn ft³ in the Eocene sequences. The independent resources evaluation was carried out by Gustavson Associates in the end of 2015.
Georgia is reported to be paying high international market price for gas supplied by Azerbaijan and this gas is being used for domestic purposes due to local demand, Skyland said.
Skyland completed its acquisition of interest in Block XIG in April, 2016 from Georgia Oil & Gas, which holds 60% of the license. A government entity – Georgian Oil and Gas Corporation – also has a financed conversion right over 20% of the project. The production-sharing contract in relation to Block XIG expires in 2037.
The exploration block covers an area of 289 km² and is in the Kura Basin, stretching from the middle of Georgia to the Caspian Sea with significant potential for both conventional and non-conventional oil and gas production.
Additional prospectivity exists in the block, with three other drill-ready structures identified, Skyland said. Skyland is primarily focused on projects in Central Asia, the Caucasus and Russia.