REG - Block Energy PLC - Q1 Operations Update

Block EnergyAnnouncement

07/04/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220407:nRSG5544Ha&default-theme=true

RNS Number : 5544H  Block Energy PLC  07 April 2022

7 April 2022

 

Block Energy plc

("Block" or the "Company")

Q1 Operational Update

Block Energy plc, the exploration and production company focused on Georgia,
is pleased to announce the following operations update for the three months
ended 31 March 2022.

Highlights

·    Over 92,000 operational man-hours worked in Q1 2022, with no
lost-time incidents

·    Strong exit Q1 production rate of over 630 boepd

·    Q1 production of 46.1 Mboe (Q4: 34.6 Mboe) or an average of 512 boepd

·    Q1 revenue of $2,361,000 (Q4: $2,550,000)

·    Long-lead items received and gathering pipeline being built for well
WR-B01 sidetrack

 

Health and Safety

 

92,000 operational man-hours have been worked by staff and contractors in Q1
(Q4: 110,000 hours) with no lost-time incidents.

 

Operations

 

JKT-01Z commenced production in mid-January 2022. Analysis indicates the well
is in good communication with the in-place volume of 8 MMbbls associated with
long-term producing well KRT-39.

Gas production from JKT-01Z was quickly tied into the gas infrastructure at
well KRT-39 to support rapid monetisation. Since mid-January 2022, oil and gas
production from JKT-01Z has delivered substantial additional cashflows to the
Company, supporting early payback and moving the Company into being cashflow
positive.

Preparations for the drilling of the side-track of well WR-B01 continue to
make good progress. Many of the long-lead items required to drill two
sidetracks have been purchased and already arrived in Georgia. Furthermore,
construction of the pipeline from the WR-B01 to WR-38 wellsites, to enable the
immediate monetisation of any gas produced from the WR-B01 sidetrack, has
commenced.

 

Oil and Gas Production

 

During Q1, gross production was 46.1 Mboe (Q4: 34.6 Mboe), comprising
32.1 Mbbls of oil (Q4: 24.9 Mbbls) and 14.0 Mboe of gas (Q4: 9.7 Mboe).
The average gross production rate for Q1 was 512 boepd (Q4: 376 boepd).

 

Production in Q1 was impacted due to well WR-38Z being off-line. WR-38Z was
brought back into production at the end of March, replenishing lost production
providing a strong Q1 exit rate for daily production of over 630 boepd.

 

Oil Sales

 

In Q1, Block sold 24.4 Mbbls of oil (Q4: 33.6 Mbbls) for $2,168,000
(Q4: $2,441,000), resulting in a weighted average price of approximately $89
per barrel (Q4: $73 per barrel), representing a 22% increase in the realised
price in Q1 compared with Q4.

 

Gas Sales

 

In Q1, the Company sold 48.4 MMcf of gas (Q4: 36.1 MMcf) for $193,000 (Q4:
$109,000), resulting in a weighted average price of approximately $4.00/Mcf
(Q4: $3.03/Mcf).

 

Cash Position

 

As at 31 March 2022, Block had $1.2 million cash at bank (31 December 2021:
$1.2 million).

 

Block Energy plc's Chief Executive Officer, Paul Haywood, said:

"As the first quarter production results demonstrate, the Company is
delivering operationally, which combined with improved commodity prices,
creates a robust financial result. This gives us a stronger platform to
deliver on the inherent value of Block's assets and monetise the wider
reserves and resources within our portfolio. We believe we now have a better
understanding of the subsurface, which we have translated into a practical
plan to grow production and create value for shareholders. While we can do
this with our existing resources, we are also looking into non-dilutive
financing options to accelerate production growth, and other ways to enhance
value for shareholders."

 

Jonathan Bedford (Block's Technical Manager) has reviewed the reserve,
resource and production information contained in this announcement. Mr
Bedford has an MSc in Petroleum Geoscience from the University of
Aberdeen and is a petrophysicist.

 

**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, with 2P oil
and gas reserves of 64 MMboe, comprising 2P oil reserves of 36 MMbbls and 2P
gas reserves of 28 MMboe (Source: CPR Bayphase
Limited: 1 July 2015) and historical production of over 180 MMbbls of oil
from the Middle Eocene, peaking in the mid-1980s at 67,000 bopd.

The Company has a 100% working interest in the highly prospective West Rustavi
onshore oil and gas field with multiple wells that have tested oil and gas
from a range of geological horizons. The field has so far produced 50 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

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

2.    Bcf: billion cubic feet.

3.    boe: barrels of oil equivalent.

4.    boepd: barrels of oil equivalent per day.

5.    bopd: barrels of oil per day.

6.    gross production: including the state of Georgia's share of
production

7.    LTI: lost-time incident.

8.    Mbbls: thousand barrels.

9.    Mboe: thousand barrels of oil equivalent.

10.  MMbbls: million barrels.

11.  MMboe: million barrels of oil equivalent.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDDGGDSIUGDGDL