TIDMBLOE
RNS Number : 3413W
Block Energy PLC
17 April 2023
17 April 2023
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 its operations update for the
three months ended 31 March 2023.
Highlights
-- Over 106,976 operational man-hours worked in Q1 2023, with
one minor Lost Time Incident ('LTI').
-- As announced after the quarter end, drilling operations on
well WR-B01Za proved successful, providing back-to-back drilling
successes on Project I.
-- Completion of farmout of non-core areas of licence XIB in
exchange for work programme valued at c. US$3m gross to Georgia Oil
and Gas Limited.
-- As announced after the quarter end, an MOU signed with the
Ministry of Economy and Sustainability.
-- Q1 production of 36.0 Mboe (Q4: 34.4 Mboe) or an average of 400 boepd (Q4: 374 boepd).
-- Q1 revenue of US$1,190,000(1) (Q4: US$1,840,000).
-- Secured senior loan facility of US$2.0m with US$1.06 million drawn.
(1) Oil Revenue of c. US$ 1.0 million not included in this
quarterly report as sales happened after quarter end.
Health, Safety & Emissions
Over 106,976 operational man-hours were worked by staff and
contractors in Q1, with one minor LTI and no serious incidents.
The Company again sought to minimise emissions, in-line with its
commitments, but needed to flare 60,656 m(3) of gas due to
unplanned shutdowns and WR-B01Za testing operations.
Operations
As planned, the WR-B01Za trajectory penetrated and followed a
seismic lineation running parallel to and around 500m to the west
of the lineation penetrated by JKT-01Z. The well crossed a fault
immediately before entering the productive part of the fracture
system, which caused unstable wellbore conditions. The Company's
drilling team conducted a successful low-cost wellbore intervention
resulting in a production rate of 269 boepd (241 bopd oil &
4,800 m3/d gas), as notified on 3 April 2023. Following this
reporting period, the well was handed over to the production team
and remains on production.
The results of JKT-01Z followed by WR-B01Za provide back-to-back
drilling success, further validating the Company's reservoir
understanding and confirming its ability to accurately place
horizontal wells in areas of good productivity.
Total production from Project I sidetrack wells exceeds 250,000
boe gross to date.
Corporate
The Company has completed the previously announced agreement for
a 50% farm-out of non-core areas of Licence XIB to Georgia Oil
& Gas Limited, in exchange for a work programme with an
estimated value of $3m gross, comprising $2.5m for 2D seismic
acquisition and $0.5m for seismic reprocessing ("Project IV").
As announced on 9(th) March 2023 (https://bit.ly/409ej7i), the
farmout provides the Company with direct exposure to a high-impact
exploration play, targeting prospective resource volumes of 3.1
TSCF gas and 1,400 MMbbl oil, which is benefiting from a material
work programme at no cost to the Company. None of the existing
fields, current production nor future development plans associated
with Projects I, II and III, within Licence XIB, are subject to the
farm-out.
Additionally, the Company secured a senior loan facility of US
$2.0m, of which US$ 1.06 million has been drawn down. The funds
provide Block with the resources to accelerate its Project I
development programme, which includes the recent successful
drilling of well WR-B01Za.
Oil and Gas Production
During Q1, gross production (including the state of Georgia's
share) was 36.0 Mboe (Q4: 34.4 Mboe), comprising 26.8 Mbbls of oil
(Q4: 27.4 Mbbls) and 9.2 Mboe of gas (Q4: 7.0 Mboe). The average
gross production rate for Q1 was 400 boepd (Q4: 374 boepd).
Oil Sales
In Q1 2023, the Company sold 13.3 Mbbls of oil (Q4: 21.3 Mbbls)
for US$ 999,000 (Q3: US$ 1,691,000), at a weighted average price of
US$75 per barrel (Q4: US$ 79 per barrel). The decrease in sales,
compared to production, relates to the timing of liftings.
As of 31 March 2023, the Company had c. 12,500 bbls of oil in
storage, which is expected to be sold in April, generating
approximately US$1.0m in revenue at the current Brent price and
therefore falls into the next reporting period.
Gas Sales
In Q1 2023, the Company sold 37.7 MMcf of gas (Q4: 27.3 MMcf)
for US$ 194,900 (Q4: US$ 149,000), resulting in a weighted average
price of approximately US$ 5.57/Mcf (Q4: US$ 5.45/Mcf).
Block Energy plc's Chief Executive Officer, Paul Haywood,
said:
"The first quarter of 2023 saw a robust start to the year. The
Company continued to deliver on its successful drilling and asset
development programme, with the results of WR-B01Za leading to
record group production levels being realised outside this
reporting period.
"Our focus on operational excellence and cost discipline has
allowed us to deliver good results this quarter, further
demonstrating our resilience and ability to create value for our
shareholders. We remain busy on many fronts, and look forward to
providing further updates on our progress in due course."
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/ or contact:
Paul Haywood Block Energy plc Tel: +44 (0)20
(Chief Executive 3468 9891
Officer)
Neil Baldwin Spark Advisory Partners Tel: +44 (0)20
(Nominated Adviser) Limited 3368 3554
Peter Krens Tennyson Securities Tel: +44 (0)20
(Corporate Broker) 7186 9030
P hilip Dennis C elicourt Communications Tel: +44 (0)20
/ M ark Antelme 8 434 2 643
/ Ali AlQahtani
(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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END
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