REG - Block Energy PLC - Operations Update
11/12/2023 07:15
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RNS Number : 2538W Block Energy PLC 11 December 2023
11 December 2023
Block Energy plc
("Block" or the "Company")
Project IV Update
Block Energy plc, the development and production company focused on Georgia,
is pleased to provide a Project IV update.
Highlights
- DeGoyler MacNaughton independent resource report covering Didi
Lilo ("Project IV").
- 302.8 MMboe mean unrisked prospective resources identified in the
Martkopi Terrace prospect with over 30% chance of geological success.
- Farm-out discussions with regional oil companies continue to
progress well.
Project IV Background
As announced in March 2023, the Company completed a farm-out agreement for
part of licence XIB to privately-owned Georgia Oil and Gas Limited ("GOGL").
As part of the consideration for the transaction, GOGL acquired and processed
210 km new 2D seismic and reprocessed 1,000 km of existing regional seismic
data.
The portions of the licence that were farmed-out to GOGL (Didi Lilo and South
Samgori) would have been subject to relinquishment obligations due in 2024
under the terms of the XIB Production Sharing Contract.
Project IV Independent Prospective Resource Report
As part of the work programme on Project IV, an independent prospective
resource report was commissioned by the Operator, GOGL, on the Didi Lilo area
as well as nearby GOGL acreage in order to facilitate current farm-in
discussions with regional oil companies, which continue to progress. The
report was authored by DeGolyer MacNaughton, a leading US based petroleum
engineering firm, to Petroleum Resource Management System (PRMS) standards.
The gross prospective resources applicable to the Didi Lilo area (including
portions of the prospect in nearby licences XIM & XIQ) are as follows:
Prospect Licence 1U (Low) Estimate 2U (Best) Estimate 3U (High) Estimate Mean Estimate Probability of Geological Success (%)
Martkopi Terrace Middle Eocene Didi Lilo, XIM & XIQ Gross Oil Resources (MMbbl) 31.4%
135.8 239.4 420.4 267.2
Gros
s
Asso
ciat
ed
Gas
Reso
urce
s
(BCF
)
105.6 193.3 337.9 213.4
Gros
s
Oil
&
;
Gas
Reso
urce
s
(MMb
oe)
153.4 271.6 476.7 302.8
Net P
Pres r
ent o
Valu b
e, a
10% b
(USD i
MM) l
i
t
y
o
f
E
c
o
n
o
m
i
c
S
u
c
c
e
s
s
(
%
)
99.5 223.4 501.8 272.7 28.4%
Additional prospectivity was identified in GOGL's neighbouring acreage,
licences XIK, XIM, XIN and XIQ, of which the state company, Georgia Oil and
Gas Corporation ("GOGC"), acquired a 22% paying interest in 2021.
Commenting, Paul Haywood, Block Energy Chief Executive Officer said:
"We're pleased to report that DeGoyler MacNaughton have identified
substantial prospectivity of over 300MMboe Gross Mean Unrisked Prospective
Resources and project value in excess of US$270MM within the Martkopi Terrace
prospect.
This independent subsurface validation, plus the significant commercial work,
bolsters our confidence in the potential of Project IV and we look forward to
updating shareholders on progress made to crystalise this significant
opportunity in due course."
**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/
(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 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
XIB. Licence block XIB 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 XIB 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 XIF 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 0.9 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).
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.
· MD: measured depth.
· MMbbls: million barrels.
· MMboe: million barrels of oil equivalent.
· MMcf: million cubic feet.
· TVD: True Vertical Depth.
Gross prospective resources: Estimated volumes associated with undiscovered
accumulations. These represent quantities of petroleum which are estimated, as
of a given date, to be potentially recoverable from oil and gas deposits
identified on the basis of indirect evidence but which have not yet been
drilled.
Project I: focused on the West Rustavi/Krtsanisi development and supported by
an independent Competent Person's Report from ERCE. The Rustavi/Krtsanisi
development sits across licence areas XIF & XIᴮ. An internal report
assigns 27.5 MMbbl 3C Contingent Resources.
Project II: evaluation of large, undrained areas of the deeper zones of the
Middle Eocene reservoir within the Patardzeuli field, within licence XIᴮ.
Designed to evaluate and test 200 MMbbl 2C Contingent Resources.
Project III: aimed at the appraisal and monetization of substantial contingent
resources of gas within the XIᴮ & XIF licenses, within the Lower Eocene,
Paleocene and Upper Cretaceous geological formations. Internal estimates
attribute 984 BCF 2C Contingent Resources.
Project IV: exploration of the extensive gas potential within the Company's
wider portfolio, including licence area XIF and exploration license IX, in
partnership with Georgia Oil & Gas limited.
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