REG - Block Energy PLC - Independent Engineering Report

Block EnergyAnnouncement

08/02/2024 07:15

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RNS Number : 3907C  Block Energy PLC  08 February 2024

8 February 2024

Block Energy plc

("Block" or the "Company")

Independent Engineering Report Confirms Prospects for Project III Farm-out
Process

Block Energy plc, the development and production company focused on Georgia,
is pleased to announce an Independent Engineering Report indicating over 1 TCF
of 2C contingent gas resources in the Patardzueli and Samgori fields in
licence XIB with a Net Present Value of more than USD 500 MM.

Highlights

 •    Independent Engineering Report (IER) by a leading geoscience and reservoir
      engineering consultancy covering the Lower Eocene and Upper Cretaceous
      reservoirs in the Patardzueli-Samgori field.
 •    IER indicates over 1 TCF of 2C Contingent Resources with a NPV exceeding USD
      500 MM.
 •    Block's subsurface work and proposed development plan validated.
 •    Key pathway document for Project III farm-out process.
 •    Prospect of increased contingent resources in proven gas resources in the same
      reservoir sequences across additional fields in licences XIB and XIF.

Project III Background

The Company's Project III is focused on the appraisal and development of gas
resources within the Lower Eocene and Upper Cretaceous reservoirs.

The reservoirs contain extensive gas-bearing natural fracture systems hosted
by a stratigraphy over one and a half kilometres thick, spanning Block's XIB
and XIF licences, across three fields, Patardzueli-Samgori, Teleti and
Rustavi. The Company's farm-out campaign is supported by the major studies it
has undertaken on all three fields, and historic well tests proving the
presence of gas across each field.

Project III Independent Engineering Report (IER)

The IER, covering the Patardzueli and Samgori fields, was undertaken by
Oilfield Production Consultants (OPC) Limited, a leading geoscience and
reservoir engineering consultancy.

The IER was performed according to Petroleum Resource Management System
guidelines. OPC undertook a comprehensive evaluation of Block's technical
work, including geology, geophysics, petrophysics, reservoir engineering,
development plan, well design, costings, commercialisation and economics.

The Report's volumetric estimates, outlined below, are in line with those of
Block and confirm the Company's technical and economic case for the appraisal
and development of the Patardzueli and Samgori fields. With this validation of
Block's subsurface and development plan, the IER is a cornerstone document for
the Project III farm-out process.

 

 Patardzueli-Samgori  Recoverable Contingent Resources (BCF)
 Reservoir            1C (Low)    2C (Mid)    3C (High)   Mean
 Lower Eocene         782         901         1,023       902
 Upper Cretaceous     143         171         199         171
 Total                926         1,072       1,222       1,073

 

 Patardzueli-Samgori  Economic Value (USD MM)
 Case                 Low       Mid       High
 Total                227       501       745

 

Rustavi and Teleti Fields

The IER was commissioned to review Block's evaluation of the
Patardzueli-Samgori Lower Eocene and Upper Cretaceous reservoirs, the primary
target for the initial Project III appraisal and development campaign,
including the proposed early production facilities associated with the first
phase of the development.

In addition, the Company has identified substantial proven gas resources in
the same reservoir sequences in the Rustavi and Teleti fields, opening the
prospect of material developments beyond Patardzueli-Samgori.

Block is currently reviewing the internal contingent resource estimates for
these fields, employing the same methodologies as used by OPC in the
Patardzueli-Samgori IER. Revised estimates will be announced in due course.

 

 

 Figure 1: Patardzueli-Samgori, Rustavi and Teleti fields (at Lower Eocene) and
 key pipeline infrastructure

 

Commenting, Paul Haywood, Block Energy Chief Executive Officer said:

"We are delighted to receive an IER from OPC validating the significant
multi-disciplinary work we have undertaken to define the full scope of Project
III.

"With independent 2C Contingent resources of over 1TCF of gas, robust
economics, proximity to Georgia's major industrial hub, strategically located
by the South Caucasus Gas pipeline, connecting Turkey to European gas markets,
this project has the potential to make a significant regional impact. The gas
resources in Project III and across our licences have already been declared a
strategic asset by the Georgian state.

"Our team has worked hard to deliver the technical product required for a
successful farm-out process, including a full appraisal plan and early
development concept.

"Beyond Patardzeuli-Samgori we have also identified significant volumes of gas
within the Rustavi and Teleti fields. I look forward to updating the market on
further progress across every element of our evolving Project III appraisal
and development campaign in due course."

**ENDS**

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.

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 / Ali AlQahtani   Celicourt Communications         Tel: +44 (0)20 7770 6424

 (Financial PR)

 

Notes to editors

Block Energy plc is an AIM-listed 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 4,256 km(2), including the XIB licence which has
over 1TCF of 2C contingent gas resources in the Patardzueli and Samgori
fields. (Source: IER, OPC 2024).

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.

·    MD: measured depth.

·    MMbbls: million barrels.

·    MMboe: million barrels of oil equivalent.

·    MMcf: million cubic feet.

·    TVD: True Vertical Depth.

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