Juniors Red Emperor Resources, Strait Oil & Gas and Range Resources have agreed with Georgian Industrial Group to jointly develop the gas resources at the Tkibuli-Shaori field.
The trio and GIG will create a 50/50 joint venture to explore the coal-bed methane (CBM) and conventional gas potential of the site in the Republic of Georgia.
The venture will start with feasibility and technical studies followed by three to four initial wells to clarify flow rates and other key parameters.
Full development of six CBM wells a year is envisaged with forecasted production rates of between 300,000 and 500,000 cubic feet of gas per well.
The work programme is expected to start in the second half of the year, with predominantly debt financing at first followed by production financing.
Gas production and sales are targeted to begin within 18 months.
Tkibuli has been estimated by Advance Resource International to contain around 400 billion cubic feet of CBM gas in contingent resources.
Sand horizons have also been identified around the coal beds, which could add conventional resources, the venture partners said.
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