REG - Block Energy PLC - Q2 Operational Update; Change of Registered Office

Block EnergyAnnouncement

05/07/2023 07:00

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RNS Number : 9191E  Block Energy PLC  05 July 2023

05 July 2023

 

Block Energy plc

("Block" or the "Company")

Q2 Operational Update; Change of Registered Office

Block Energy plc, the development and production company focused on Georgia,
is pleased to announce its operations update for the three months ended 30
June 2023.

Highlights

·    Average production of 664 boepd during the quarter (Q1: 400 boepd)

·    US$2.0m loan secured to ensure drilling momentum is maintained

·    Planned spud of the next Project I well, this month

·    Dr Ken Seymour moves to Senior Advisor, with Guram Maisuradze
progressing to Chief Operations Officer ("COO")

·    Termination of the Salary Sacrifice Scheme

 

 

 

Health, Safety & Emissions

 

Over 80,300 operational man-hours were worked by staff and contractors in Q2,
with no LTIs.

 

The Company continues to minimise emissions, in-line with its commitments,
flaring only 71,604 m(3) of gas over the period as a result of facility
shutdowns and maintenance.

 

Operations

 

Following the back-to-back success of drilling under Project I, the second
quarter of the year saw Block deliver record production with an average rate
of 664 boepd.

 

The success of wells JKT-01Z and WR-B01Za demonstrates the strength and
ability of the Company's operating team in Georgia and has boosted the
Company's confidence in drilling productive wells into the Middle Eocene
reservoir.  Consequently, the Company intends to advance its Project I, phase
one strategy and drill two further side-tracks and a new well, potentially
consisting of multi-lateral technology, targeting production rates some 2-3x
those achieved in previous horizontal wells.

 

Corporate

 

The Company's financial position improved materially following the increase in
production during the period, enabling the Board to terminate the Salary
Sacrifice scheme from 1 April. The scheme was established in April 2020 to
support the Company's financial position during the pandemic and collapse in
crude oil price.

 

In April, Block entered a Memorandum of Understanding ("MoU") with the
Ministry of Economy and Sustainable Development in Georgia. The MoU covers
government support and initiatives to assist in the development of the
Company's Project I, II, III, and IV plans through data sharing, cooperation,
and the facilitation of meetings with national and regional large oil
companies.

 

The MoU also envisages the concept of a long-term gas offtake agreement, which
is an important element of delivering value from the 1 TCF of contingent
resource identified by Block's subsurface team under Project III.

 

In order to maintain the drilling programme and avoid cash flow fluctuations
associated with intermittent crude oil liftings, the Company secured a loan
facility of US $2m, of which the entirety has been drawn down. These funds
have enabled the Company to maintain momentum with drilling plans in pursuit
of significantly enhancing total production by this year-end.

 

As part of the Company's career progression plan for its top performers, Guram
Maisuradze is promoted to Chief Operating Officer, with Dr Ken Seymour
transitioning to Senior Advisor, where he will focus on Block's medium and
long-term projects. Guram has served the Company for five years, holding the
role of Operations Manager, where, supported by the broader team in Georgia,
he has been responsible for successfully planning and executing the drilling
of new wells and for the overall management of production operations.

 

With effect from today, Block has also engaged Orana Corporate LLP to act as
the Company's designated administrator and Company Secretary. The Company's
registered office will also change to: Eccleston Yards, 25 Eccleston Place,
London SW1W 9NF.

 

Oil and Gas Production

 

During Q2, gross production was 60.4 Mboe (Q1: 36.0 Mboe), comprising
48.5 Mbbls of oil (Q1: 26.8 Mbbls) and 11.9 Mboe of gas (Q1: 9.2 Mboe).
The average gross production rate for Q2 was 664 boepd (Q1: 400 boepd).

 

Oil Sales

 

In Q2 2023, the Company sold 36.0 Mbbls of oil (Q1: 13.3 Mbbls) for
US$2,568,000 (Q1: US$ 999,000).

 

As of 30 June 2023, the Company had c. 11.7 Mbbls of oil in storage.

 

Gas Sales

 

In Q2 2023, the Company sold 50.3 MMcf of gas (Q1: 37.7 MMcf) for US$ 266,000
(Q1: US$ 194,000).

 

Block Energy plc's Senior Advisor, Dr Ken Seymour, said:

 

"It is a pleasure to welcome Guram to his new COO role. It has been a joy
working with him and achieving our 2023 objectives. Guram's leadership,
knowledge and innovation have been critical success factors in reaching and
sustaining record production. His knowledge of Georgian production operations
is unsurpassed, and his promotion is well and truly deserved. I look forward
to working with the Company's Executives by providing operational well
assurance on our Project I, Middle Eocene Oil Development and developing
longer-term strategic objectives."

 

 

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

"The second quarter of the year is characterised by a significant increase in
production. This saw the Company's financial position improve materially,
providing the Company with additional investment funds to drive further value
from its assets. Our next Project I well will spud later this month."

 

"I am delighted to welcome Guram to Block's leadership team. His knowledge of
our operations and his experience within Georgia will prove invaluable as we
progress our plans. I am also looking forward to continuing to work closely
with Ken as he moves into his new role as Senior Advisor."

 

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.

 **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 / 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.

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