REG - Block Energy PLC - Project III Resource Upgrade

Block EnergyAnnouncement

04/03/2024 07:00

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RNS Number : 3236F  Block Energy PLC  04 March 2024

4 March 2024

Block Energy plc

("Block" or the "Company")

Project III Resource Upgrade

Block Energy plc, the development and production company focused on Georgia,
is pleased to announce upgraded internal resource estimates for the Rustavi
and Teleti fields.

Combined with the independently audited 2C recoverable resources on the
Patardzueli-Samgori field, the total Project III 2C Contingent Recoverable
Resource figure for Patardzueli-Samgori, Rustavi and Teleti fields now stands
at over 2.77 TCF, with an estimated Net Present Value (10) ("NPV") of USD 1.65
billion.

Internal Resource Upgrade

Following the announcement of the Independent Engineering Report ("IER") by
Oilfield Production Consultants ("OPC") on Patardzueli-Samgori, the Company
has reviewed and updated its internal estimates for the Rustavi and Teleti
fields in line with the methodologies applied by the OPC report.

Both the OPC IER and the Block Energy Internal Contingent Resource report only
consider gas volumes within the natural fracture system. Upside exists within
the tight matrix in both the Lower Eocene and Upper Cretaceous reservoirs.
Both reports were completed according to Petroleum Management Resource System
("PRMS") standards.

The upgraded internal contingent resources for these fields are as follows:

 Field    Reservoir         Recoverable Contingent Resources (BCF)
                            1C (Low)    2C (Mid)    3C (High)   Mean
 Rustavi  Lower Eocene      884         1,062       1,245       1,064
          Total             884         1,062       1,245       1,064
 Teleti   Lower Eocene      149         203         272         208
          Upper Cretaceous  344         435         530         436
          Total             493         638         802         644
 Total                      1,377       1,700       2,047       1,708

(Block Energy Internal Contingent Resource Report, Rustavi & Teleti)

The full Project III volumes are therefore as follows:

 

 

 Field                Recoverable Contingent Resources (BCF)
                      1C (Low)  2C (Mid)  3C (High)  Mean      Source
 Patardzueli-Samgori  926       1,072     1,222      1,073     OPC IER, 2024
 Rustavi              884       1,062     1,245      1,064     Block Energy Internal Report, 2024
 Teleti               493       638       802        644       Block Energy Internal Report, 2024
 Total                2,303     2,772     3,269      2,781     -

(Project III Recoverable Contingent Resources by Field)

 Field                Economic Value (Net Present Value (10); USD MM)
                      Low           Mid           High          Source
 Patardzueli-Samgori  227           501           745           OPC IER 2024
 Rustavi              209           769           932           Block Energy, Internal Report, 2024
 Teleti               203           388           487           Block Energy, Internal Report, 2024
 Total                639           1,658         2,164         -

(Project III Net Present Value (10) by Field and Case)

The development plan for each field in the mid case sees an early production
scheme delivering 30 MMCF/d gas production, rising to plateaus of 200 MMCF/d
(each of Patardzueli-Samgori and Rustavi) and 100 MMCF/d (Teleti). Development
costs are anticipated to be low on a USD/MMCF basis, given the onshore
location of the fields and the proximity of sales infrastructure.

Gas quality in all three fields has consistently high CH(4) content and no
H(2)S or CO(2) detected within the gas tests undertaken to date. The Company
has developed fully costed appraisal programmes for all three fields, with a
near-term focus on Patardzueli-Samgori in light of the results of the PAT-E1
well drilled by Schlumberger.

New Corporate Presentation

The Company is also pleased to announce publication of a new corporate
presentation. No material new financial or other information has been
provided. The presentation is available on the Company's website and can be
found by following this link:
https://www.blockenergy.co.uk/investors/circulars-presentations-and-reports/
(https://www.blockenergy.co.uk/investors/circulars-presentations-and-reports/)

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

"I am pleased to announce upgraded contingent resources across Rustavi and
Teleti, which together with the recent IER further confirm our confidence in
Project III.

"Project III offers a 2C recoverable contingent resource of nearly 3 TCF, with
an NPV of USD 1.65 billion. The Project has the potential for significant gas
production rates: 200 MMCF/d for each of Patardzueli-Samgori and Rustavi at
plateau, an additional 100 MMCF/d from Teleti, and 30 MMCF/d from early
production facilities following the Patardzueli-Samgori appraisal campaign.

"The subsurface team has identified additional prospectivity within the area,
which would add further running room to the long-term development of the
Project. The recently announced commercial Carbon Capture Storage (CCS)
opportunity also highlights the Project's sustainability credentials. Further
work is being undertaken on the CCS opportunity and announced in due course.

"Today's announcement underlines the Project's potential to meet Georgia's
urgent demand for energy and make a wider regional impact. The proximity of
our fields to the South Caucuses Pipeline (SCP) opens up competitive export
opportunities in Turkish and Southern European gas markets - including Italy
and Greece - through the connection to the Trans Anatolian Natural Gas
Pipeline (TNAP) and the Trans Adriatic Pipeline (TAP).

"The farm-out campaign is on schedule with ongoing discussions with a range of
interested parties."

**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 km2, 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.

·    MD: measured depth.

·    MMbbls: million barrels.

·    MMboe: million barrels of oil equivalent.

·    MMcf: million cubic feet.

·    TVD: True Vertical Depth.

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