One to Watch: Block Energy

Sunday, Feb 17 2019 by
5

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…

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Disclaimer:  

This content has been created for information purposes only, and is NOT, in any way, a recommendation to invest.  This communication is a snapshot of a certain aspect of a discussed business at a moment in time, and is merely a basic starting point for research.  The article/thread has been created with honesty and integrity in mind and is based on publically available information sourced in relation to the title, such as from, RNS announcements, published reports, management comments, analyst reports, media coverage etc.  To this extent the author who has written the piece in good faith accepts no liability for the accuracy of the information and urges all readers to verify the content independently.  Please note that the value of investments may fall or rise and you may not get back the amount originally invested, or in some cases your investment may be wiped off altogether.  When investing, bear in mind that past performance is not a guide to future performance and that qualified independent financial advice should be sought before buying or selling shares.  The Author of this article may hold shares in the companies discussed.


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Block Energy plc, formerly Goldcrest Resources plc, is an oil and gas company. The Company’s projects include norio onshore oil field, east kavtiskhevi (block VIII), akoko asheba gold project and Mauritania copper. Norio project is 35 kilometres from the centre of Tbilisi, requiring low capex recompletions of existing wells and new horizontal wells, to existing production. East kavtiskhevi (block VIII), which consist 36.9 MMbbl risked resources in Cretaceous, 4,700 kilometers area and multiple prospective horizons. Asheba project is located at the southern end of the Ashanti belt 15km east of Endeavour Mining's Nzema mine and 30 kilometers south of the world class Tarkwa mine. At Asheba, mineralisation is centered on the old Cheriamen and Atinasi mining sites within multiple parallel steep dipping zones associated with intense silicification, disseminated pyrite and a stockwork of quart veinlets. Mauritania project is an exploration concept. more »

LSE Price
13.58p
Change
28.4%
Mkt Cap (£m)
29.2
P/E (fwd)
n/a
Yield (fwd)
n/a



  Is LON:BLOE fundamentally strong or weak? Find out More »


3 Posts on this Thread show/hide all

Elias Jones 23rd Mar 1 of 3

Reaches Total Depth at West Rustavi Well 16a with significant hydrocarbon shows, results due over the next two weeks.  

  • Total Drilled Depth of 2,659 metres reached at well 16a following successful horizontal sidetracking operations
  • Significant oil and gas shows in the Upper and Middle Eocene formations with testing in the Middle Eocene to begin later this week
  • Seeking to increase the Company's gross production by 325 bopd and to add USD 3.6m of free cash flow to annual revenue
  • Follow-on West Rustavi candidate well 38, in close proximity to 16a, is primed for sidetrack operations subject to 16a results

https://m.londonstockexchange....

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Elias Jones 1st Apr 2 of 3
2

Further to the production testing mentioned above the results today were to say the least astounding, and for me personally validates the research, conviction and commitment as a shareholder. The company treats its shareholders with the upmost respect and really deliver what they say with excellent shareholder communications.
Another reason I have backed Block Energy is, that all the infrastructure is in place with immediate production from the wells. The company gets at the well head Brent Crude minus $10. At current price it is therefore $59.08 per barrel. The economics really work for quick free cashflow.
This is only the start for Block, as they make progress towards the objective of becoming Georgia's leading independent oil and gas producer.
---------
Todyas news
West Rustavi 16a well test significantly exceeds forecast delivering over 1,100 bbl/d
1 April 2019
· Testing rate of 1,100 bbl/d ('barrels per day') on a one eighth inch (⅛ inch) choke significantly exceeds base case production rate
· Well performance ranks amongst some of the best drilled in Georgia
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BLOE/14022495.html

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donald pond Mon 3:04pm 3 of 3

Thanks for your work on this Elias, I've taken a position as the SP retraced following the recent placing and believe this is now primed for explosive growth. It is a little unfortunate that Stocko doesn't cover O&G companies as they can be fantastic investments if the team behind the company are focused an they are drilling in prospective areas.

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