Block Energy (LON:BLOE) is an AIM listed exploration and production company focused on the Republic of Georgia.
Block Energy joined AIM in June 2018 raising £5m at 4p during IPO for their stage one programme which is currently underway, comprising of multi-well workover and sidetrack programme at their Norio field targeting an increase in production to 250 bopd by H1 2019. In tandem with the Norio operations Block Energy have a potentially high impact programme at West Rustavi, where they are aiming to produce 650 bopd through the drilling of two sidetrack wells in Q1 2019, and to re-test a historic gas discovery (1).
As it stands now 9 months since IPO the company and CEO are clearly focused and determined and so far doing what they said they will, the next 4 months to end of H1 will tell us a lot whether this company will be a hit or a miss. The next few updates from Norio and West Rustavi will give us a good indication as to how realistic the H1 900bopd target is (2). As it is now pre-results and at IPO level, as early stage investors we take the risk. To counter this risk the work programme is clearly not targeting 'wild cat' wells and we can take confidence from previous field history and tests to date, also taking confidence from seeing ExxonMobil recently entering the country and ongoing operations across Schlumberger's 100% owned position next to Block Energy licences.
Let’s see in 4 months’ time what the share price will be, if Block Energy do hit the target production of 900 bopd on this fully funded programme in H1 then it will be considerably higher than today’s current £10m Market Cap at the IPO level.
I recently put the following questions to the Block Energy Chief Executive Officer Mr Paul Haywood:
Q1. Briefly, could you provide the background to Block Energy and why the focus on Georgia?
Before establishing Block Energy the executive team had accumulated significant experience working in Georgia: I had worked as a consultant for Georgian Oil and Gas (GOG) since 2011.
In 2016/17 GOG was in financial difficulty and was seeking cash for assets to remedy corporate debt. Our relationship with GOG helped facilitate a timely acquisition facilitated by a unique…
