REG - Block Energy PLC - Amended Loan Facility & Related Party Transactions

Block EnergyAnnouncement

12/05/2023 07:00

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RNS Number : 1784Z  Block Energy PLC  12 May 2023

12 May 2023

 

Block Energy plc

("Block" or the "Company")

Amended Secured Loan Facility & Related Party Transactions

As announced on 2 February 2023, Block Energy plc, the production and
development company focused on Georgia, closed a senior secured loan facility
("Loan Facility") of USD 1.06 million (c. £0.86 million on 2 February 2023).

The Loan Facility permitted the Company to borrow an additional contingent
amount of up to USD 2.00 million during the term of the loan from the USD 1.06
million already committed, with the existing lenders having a right of first
refusal for a period of 20 business days to participate in any extension.

The Company has now increased the Loan Facility by USD 0.94 million (c. £0.75
million on 10 May 2023), and entered into an updated Loan Agreement, with the
only changes made to reflect the increased amount of the Loan Facility and to
allow new lenders to participate in the current tranche, together with those
of the existing lenders who have elected to participate.

The funds raised will provide liquidity to maintain momentum around scheduled
crude liftings allowing the Company to accelerate the procurement of
materials for the drilling of its next Project I wells. The first in the
drilling sequence is KRT-45Z, located approximately 1,500 metres from the
recently drilled and successful WR-B01Za well and will be spud in July.

Commenting, Phil Dimmock, Chairman of Block Energy plc, said:

"Existing Group production is now over 620 boepd (April average rate), and it
is important that we keep the momentum going with the drilling campaign. The
success of both JKT-01 and WR-B01Za has given us great confidence as to the
full potential of Project I. These additional funds assist in the timely
procurement and execution of the next development wells. We look forward to
updating shareholders on further developments in due course."

 

The further USD 0.94 million is being lent on the same terms as the initial
Loan Facility, that being for a term of 18 months from the date on which the
Loan Facility was initially drawn down (2 February 2023), at which point the
principal is repayable in full. The Loan Facility carries an interest rate of
16% p.a., payable quarterly in arrears in cash.  The Company may elect to
repay amounts outstanding under the Loan at the end of each quarter, in part
or in full, subject to a 2% early repayment fee concerning the outstanding
principal amount.

The Company has provided a debenture to the lenders as security, providing a
fixed and floating charge over the Company's property and assets.

Each lender will receive warrants exercisable at any point during the three
years from the Closing Date of the original agreement (2 February 2023). The
exercise price of each warrant shall be 1.92 pence per ordinary share. The
number of warrants issued to each lender shall correspond to an
exercise value equal to 50% of their respective loan commitment under the
Loan Facility. Therefore, the number of warrants to be issued to lenders as
part of the USD 0.94 million loan in aggregate is 19,352,394.

Related Party Transactions

The Company's Chief Executive Officer, Paul Haywood, has provided a further
USD 25,000 of the Loan Facility (in addition to the USD 90,000 already
committed). Its current Chief Operating Officer and former board director, Ken
Seymour, has provided a further USD 25,000 of the Loan Facility (in addition
to the USD 100,000 already committed).

Mr Haywood and Dr Seymour are each treated as a related party of the Company
pursuant to the AIM Rules. Consequently, the participation of Mr Haywood and
Mr Seymour in the provision of the Loan Facility constitutes related party
transactions for the purposes of AIM Rule 13.

The Independent Directors (Jeremy Asher and Philip Dimmock) consider, having
consulted with SPARK Advisory Partners Limited, the Company's nominated
adviser, that the terms of the amended Loan Facility and the related parties'
participation in the Loan Facility are fair and reasonable insofar as
Shareholders are concerned.

**ENDS**

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER
THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF
ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED.  ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

For further information please visit http://www.blockenergy.co.uk/
(http://www.blockenergy.co.uk/)  or contact:

 Paul Haywood                   Block Energy plc                 Tel: +44 (0)20 3468 9891

 (Chief Executive Officer)
 Neil Baldwin                   Spark Advisory Partners Limited  Tel: +44 (0)20 3368 3554

 (Nominated Adviser)
 Peter Krens                    Tennyson Securities              Tel: +44 (0)20 7186 9030

 (Corporate Broker)
 Philip Dennis / Mark Antelme   Celicourt Communications         Tel: +44 (0)20 8434 2643

 (Financial PR)

 

Notes to editors

Block Energy plc is an AIM-listed independent oil and gas company focused on
production and development in Georgia, applying innovative technology to
realise the full potential of previously discovered fields.

Block has a 100% working interest in Georgian onshore licence blocks IX and
XI(B). Licence block XI(B) is Georgia's most productive block. During the
mid-1980s, production peaked at 67,000 bopd and cumulative production reached
100 MMbbls and 80 MMbbls of oil from the Patardzeuli and Samgori fields,
respectively. The remaining 2P reserves across block XI(B) are 64 MMboe,
comprising 2P oil reserves of 36 MMbbls and 2P gas reserves of 28 MMboe.
(Source: CPR Bayphase Limited: 1 July 2015). Additionally, following an
internal technical study designed to evaluate and quantify the undrained oil
potential of the Middle Eocene within the Patardzeuli field, the Company has
estimated gross unrisked 2C contingent resources of 200 MMbbls of oil.

The Company has a 100% working interest in licence block XI(F) containing the
West Rustavi onshore oil and gas field. Multiple wells have tested oil and gas
from a range of geological horizons. The field has so far produced over
75 Mbbls of light sweet crude and has 1.07 MMbbls of gross 2P oil reserves in
the Middle Eocene. It also has 38 MMbbls of gross unrisked 2C contingent
resources of oil and 608 Bcf of gross unrisked 2C contingent resources of gas
in the Middle, Upper and Lower Eocene formations (Source: CPR Gustavson
Associates: 1 January 2018, ERCE 2022).

In 2022, a Competent Person's Report provided by ERCE, ascribed 3P reserves of
3.01 million barrels, with an NPV project value of USD 57 million, to just a
portion of the West Rustavi/Krtsanisi Middle Eocene reservoir.

Block also holds 100% and 90% working interests respectively in the onshore
oil producing Norio and Satskhenisi fields.

The Company offers a clear entry point for investors to gain exposure to
Georgia's growing economy and the strong regional demand for oil and gas.

Glossary

·    bbls: barrels. A barrel is 35 imperial gallons.

·    Bcf: billion cubic feet.

·    boe: barrels of oil equivalent.

·    boepd: barrels of oil equivalent per day.

·    bopd: barrels of oil per day.

·    Mbbls: thousand barrels.

·    Mboe: thousand barrels of oil equivalent.

·    Mcf: thousand cubic feet.

·    MMbbls: million barrels.

·    MMboe: million barrels of oil equivalent.

·    MMcf: million cubic feet.

 

 

 

 

 

 

Notification and public disclosure of transactions by persons discharging
managerial responsibilities ("PDMRs") and persons closely associated ("PCA")
with them.

 

 

 

 1   Details  of  the  person  discharging  managerial  responsibilities  /  person  closely
     associated
 a)  Name                                                              Paul Haywood
 2   Reason for notification
 a)  Position / status                                                 CEO
 b)  Initial notification                                              Initial notification

     /Amendment
 3   Details of the issuer,  emission allowance market participant, auction platform,
     auctioneer or auction monitor
 a)  Name                                                              Block Energy plc
 b)  LEI                                                               213800E2J8QA1J6KN415
 4   Details of the transaction(s):
     section to be repeated for (i) each type of instrument; (ii) each type of transaction;

     (iii) each date; and (iv) each place where transactions have been conducted
 a)  Description of the financial instrument, type of instrument       Issue of warrants to acquire ordinary shares in Block Energy plc

     Identification code                                               ISIN GB00BF3TBT48
 b)  Nature of the transaction                                         Grant of warrants as part of subscribing in the Loan Facility
 c)  Price(s) and volumes(s)

Price(s)  Volumes
                                                                       1.92p     514,691
 d)  Aggregated information                                            n/a
 e)  Date of the transaction                                           12 May 2023
 f)  Place of the transaction                                          Outside a trading venue

d)

Aggregated information

n/a

e)

Date of the transaction

12 May 2023

f)

Place of the transaction

Outside a trading venue

 

Notification and public disclosure of transactions by persons discharging
managerial responsibilities ("PDMRs") and persons closely associated ("PCA")
with them.

 

 1   Details  of  the  person  discharging  managerial  responsibilities  /  person  closely
     associated
 a)  Name                                                                 Kenneth Seymour
 2   Reason for notification
 a)  Position / status                                                    Chief Operating Officer (PDMR)
 b)  Initial notification                                                 Initial notification

     /Amendment
 3   Details of the issuer,  emission allowance market participant, auction platform,
     auctioneer or auction monitor
 a)  Name                                                                 Block Energy plc
 b)  LEI                                                                  213800E2J8QA1J6KN415
 4   Details of the transaction(s):
     section to be repeated for (i) each type of instrument; (ii) each type of transaction;

     (iii) each date; and (iv) each place where transactions have been conducted
 a)  Description  of  the financial instrument, type of instrument        Warrants to acquire ordinary shares in Block Energy plc

     Identification code                                                  ISIN GB00BF3TBT48
 b)  Nature of the transaction                                            Grant of warrants as part of subscribing in the Loan Facility
 c)  Price(s) and volumes(s)

Price(s)  Volume
                                                                          1.92p     514,691

 

 d)  Aggregated information                                               n/a
 e)  Date of the transaction                                              12 May 2023
 f)  Place of the transaction                                             Outside a trading venue

 

 

d)

Aggregated information

n/a

e)

Date of the transaction

12 May 2023

f)

Place of the transaction

Outside a trading venue

 

 

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