REG - Block Energy PLC - CCS Project Update

Block EnergyAnnouncement

14/04/2025 07:00

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RNS Number : 7888E  Block Energy PLC  14 April 2025

14 April 2025

Block Energy plc

("Block" or the "Company")

Phase 2 CCS Update

Key process specific subsurface uncertainties, ahead of the pilot test, now
resolved

Block Energy plc (AIM: BLOE), the production and development company focused
on Georgia, is pleased to announce good progress on Phase 2 of its CCS
project, with the key process specific subsurface uncertainties, ahead of the
pilot test, having been resolved. Work has shifted to the redesign of existing
non-producing wells, and implementation of the pilot injection of CO(2) into
the reservoir.

Work has been ongoing since November 2024 on Phase 2 of the CCS project. Phase
2 comprises of desktop, laboratory and field work, aimed at undertaking a
pilot injection into the Patardzueli Middle Eocene reservoir, to prove
mineralisation and permanent storage of CO(2), and therefore the feasibility
of an industrial level sequestration project. The Company has sufficient cash
resources to fund the pilot programme in collaboration with Indorama, a major
international petro-chemical company, who are Block's partners on this
Project.

Highlights

 

·     Results from the analysis of Middle Eocene reservoir rock samples
exceeded expectations. They suggest the reservoir is suitable for CO(2)
mineralisation at depths shallower than forecast, reducing expected costs.

 

·     A successful water injection test showed that well PAT-92 (an
abandoned former production well) and well PAT-49 (currently used for water
disposal) are in pressure communication and therefore can be used as injector
and monitoring wells (critical for the monitoring and verification plan) for
the pilot test.

 

·     Work is ongoing to finalise the surface facility design at the
PAT-49 well site as well as the monitoring and verification plan to commence
injection of CO(2) into the reservoir in mid-2025.

 

Commenting, Paul Haywood, Chief Executive Officer said:

"We continue to make good progress with our CCS project, with the main
subsurface uncertainties now resolved. This was achieved through operational
and laboratory work. The original analysis undertaken in Q4 2023
(https://www.londonstockexchange.com/news-article/BLOE/ccs-update/16781068)
with respect to the project's storage potential, has been validated.

"We're excited for the next stage in the project, being the injection of CO(2)
into the reservoir, which will occur later this year once the surface facility
modifications have been completed by our engineering team and once we conclude
on the methodology to be used to verify the mineralisation of CO(2). With the
project broadly on schedule and within budget, I look forward to updating
shareholders in due course."

Phase 2 Work to Date

 

The original study by OPC, which examined the potential for the Middle Eocene
to store carbon dioxide through mineralisation, was relied upon, along with
logs and analogue outcrop data, to predict the presence of Zeolites (reactive
minerals) within the Middle Eocene. As part of Phase 2, samples of Middle
Eocene rock from two wells were analysed by Stratum Reservoir, to further
define the project and prepare for injection of carbon dioxide. The results
were above expectation, with rock samples proving the reservoir suitable for
CO(2) mineralisation at shallower depths than originally forecast, with the
distribution of Zeolite concentrations relatively consistent throughout the
reservoir.

The initial log and analogue based estimates of Zeolite concentrations had
suggested that only deeper sections of the reservoir had significant
concentrations of Zeolites. The laboratory rock sampling studies confirmed the
initial estimates, with a mid-case 151.5 Mt CO(2) storage potential, as
previously announced.

The field monitoring and verification that CO(2) is mineralised and
permanently stored in the reservoir is a key milestone for defining a
commercialisation route. As such, Block Energy has now conducted a successful
water injection test on PAT-49 (the well selected for the pilot injection of
CO(2)) and seen a strong pressure response in PAT-92 (the well selected to
monitor the CO(2) mineralisation process). The operation also demonstrated
that water injection rates of over 5,000 barrels per day are achievable, a
positive result for potential development scale storage.

The water injection test on PAT-49 and the preparation of PAT-92 were
conducted by Block's in-house drilling and engineering team, using the
Company's own A-80 rig. The Company has identified a number of other abandoned
legacy wells that could be suitable for reinjection or monitoring in the
future.

Finally, a corrosion study with respect to PAT-49 has been completed with the
results determining that the well is suitable for pilot injection without any
downhole modifications.

Phase 2 Further Work

 

With the key process specific subsurface uncertainties for the pilot test
resolved, work has shifted to the design and implementation of the injection
of carbon dioxide into the reservoir. CO(2) will be mixed with water and
pumped into PAT-49 to commence mineralisation. PAT-92 will act as a
monitoring/surveillance well.

The monitoring and verification plan for the pilot (to ensure that the carbon
dioxide is sequestered as planned into solid calcium carbonate) is currently
being designed. Once this is done, then injection will begin. CO(2) will be
supplied by Indorama, a major international petro-chemical company, who are
Block's partners on this Project.

**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.

Stephen James BSc, MBA, PhD (Block's Subsurface Manager) has reviewed the
reserve, resource and production information contained in this
announcement. Dr James is a geoscientist with over 40 years of experience in
field development and reservoir management.

 

For further information please visit 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)
 Mark Antelme                Celicourt Communications         Tel: +44 (0)20 7770 6424

 Philip Dennis

 Ali AlQahtani

 (Financial PR Adviser)

 

Notes to editors

Block Energy plc is an AIM quoted independent oil and gas production and
development company with a strategic focus on unlocking the energy potential
of Georgia. With interests in seven Production Sharing Contracts in central
Georgia, covering an area of 5,516 km(2), including the XIB licence which has
over 2.77TCF of 2C contingent gas resources, with an estimated Net Present
Value 10 ("NPV") of USD 1.65 billion, in the Patardzueli-Samgori, Rustavi and
Teleti fields. (Source: IER, OPC 2024 & Internal estimates).

The Company has structured its operations around a four-project strategy.
These projects, characterized by development stage, hydrocarbon type, and
reservoir, are pursued concurrently to achieve multiple objectives. This
includes increasing existing production, redeveloping fields, discovering new
oil and gas deposits, and capitalizing on the substantial, yet untapped, gas
resource across its licences. The goal is to deliver on multi TCF gas assets,
strategically well located for the key EU market, supported by partner funding
and cash from existing producing assets.

Located near the Georgian capital of Tbilisi, Block Energy is well-positioned
to contribute significantly to the region's energy landscape. This proximity
facilitates seamless operations and underscores our commitment to the economic
and energy development of Georgia.

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.

 

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