Block Energy
Ticker (LON: BLOE)
Shares: 624m
Share Price: 2.7p
Market Cap: £16.8m
Block Energy (LON:BLOE) is an AIM listed exploration and production company focused on the Republic of Georgia and was listed on AIM in June 2018.
Fair to say the first three years on AIM have been a steep learning curve for the company and following a hibernation on the production side due to covid in 2020, Block is now well positioned for a transformational 2021.
The company is debt free and has as of 31 March 2021, has $6.8m cash in the bank. During Q1 2021 the company connected its early production gas facility to the Georgian network and at the same time restarted oil production and produced a combined total of 44,394 boe of oil and gas during Q1 2021 (report). The average production achieved during Q1 was 573 boepd, and this rate of production generates sufficient revenue, at current oil and gas prices, to cover over 95% of operating and administration costs, importantly allowing almost all of the cash in the bank for new wells and facilities. Maintaining the base production rate is key and will hopefully be increased significantly as the year progresses with the drilling of two fully funded wells, each targeting 600 boepd starting in May.
Block also hopes to shortly announce an increase in the base production rate, with the figures of the WR-16aZ well, which is currently undergoing an intervention to be added. In addition Block continues to execute a low-cost workover programme in its newly acquired Block XIB oil fields which has so far seen a net positive impact.
The technical knowledge and strength within the company has improved considerably over the past 12 months, both via the key appointed personnel, 3D and via the Schlumberger acquisition. The new corporate presentation maps out the objectives and plan to reach c. 1,800 boepd during 2021 and the plan to 6,000 bopd to year end 2022. The new presentation can be found here.
Tennyson in their recent broker note forecast calculate a core NAV of 7.9p, which is a 193% upside on the current share price on a fully diluted bases and based on the existing producing assets within the portfolio plus a risked value for the three upcoming wells, when taking the undeveloped 2P reserve base, Tennyson have a risked…
