TIDMBLOE
RNS Number : 9418Z
Block Energy PLC
24 September 2020
24 September 2020
Block Energy Plc
("Block", the "Company" or the "Group")
Operational and Corporate Update
Block Energy plc, the exploration and production company focused
on Georgia, is pleased to announce the following operational and
corporate update. Significant operational progress has been made at
the Company's Early Production Facility ("EPF") with first gas on
schedule for Q4 2020, with the acquisition of Schlumberger
Rustaveli Company Limited ("SRCL") continuing towards completion.
Block also announces the intention of Mr Roger McMechan to step
down from the board of directors, and the initiation of a search
for a senior independent director and an independent non-executive
director to join the Company's board.
West Rustavi
The Group's EPF, a key component in enabling the Company to
process and sell gas from its West Rustavi field, arrived on site
from Canada in June. Since then, and despite COVID-19 restrictions
affecting both international and domestic travel, the EPF has been
installed on the WR-16aZ well site. The WR-16aZ well has been
connected to the EPF's inlet manifold and the EPF has been
commissioned with continuous production of dry gas for 25
hours.
Construction of the gathering line between the EPF and WR-38Z
commenced on 11 September 2020 and is due to be completed by the
end of October 2020. The steel flowline has an internal diameter of
75mm and will be buried for its full length of 3.5 km. Once the
WR-38Z well has been tied into the facility, the EPF will then be
ready to process oil and gas from the two West Rustavi wells. The
EPF is currently rated to handle up to 3 MMCF/d, but can be
expanded and it has inlets for four additional wells.
As announced on 7 April 2020, Block suspended production from
its two West Rustavi wells in response to the low oil price, COVID
19 restrictions and to conserve valuable gas reserves. Bago is
completing the final stages of the permitting process to enable it
to construct its gas sales pipeline. Bago expects to have the
pipeline completed in Q4, enabling gas sales to commence before the
end of this year.
Norio and Satskhenisi
The Company continues to produce oil from its Norio and
Satskhenisi licences and, during August 2020, it sold crude oil
from its West Rustavi, Norio and Satskhenisi licences for net
proceeds of approximately US$570,000.
Acquisition of SRCL
Block continues to work with Schlumberger on completion of the
acquisition of SRCL, which was announced on 26 March 2020. Some
conditions necessary for completion have been fulfilled, such as
the of receipt of approval from the State Agency of Oil and Gas,
but, owing to COVID-19 travel restrictions, an agreed shadowing
period has not yet been possible. We look forward to updating the
market in due course. In the meantime, subsurface technical study
work on the SRCL assets continues, yielding economically attractive
short and medium-term opportunities that will be presented to the
market following the completion of the acquisition.
Directorate Change
Following the successful commissioning of the EPF, Mr Roger
McMechan has expressed his intention to stand down from the Board
on 30 September 2020. The Company is pleased to announce that
Roger, as a consultant, will continue to make his extensive
expertise on the sub-surface and operations in Georgia available to
the Company.
Block continues to give significant focus to its internal
corporate governance standards and has initiated a search through a
leading energy executive search firm for a senior independent
director and an independent non-executive director. Block will
update the market further when it has appointed suitable candidates
for these roles.
Block has recently consulted with its major shareholders, who
have confirmed their continued support of the Company and its
directors.
Interim Results
Block expects to release its interim results for the 6 months
ended 30 June 2020 by 30 September 2020.
Block Energy plc Chief Executive Officer, Paul Haywood,
said:
"I am extremely pleased with the progress we are making with our
EPF at West Rustavi, despite the challenges of COVID-19 and low oil
prices. We remain focused on completing the remaining work in order
to commence gas sales towards the end of Q4. Gas sales will not
only provide an additional revenue stream to Block but will also
diversify the Group's resources and provide a clear path to
commercialisation of future gas developments and discoveries. Our
acquisition of Schlumberger's Georgian upstream business is also
progressing well, opening up a raft of mature opportunities for
Block."
Block Energy plc Chairman, Philip Dimmock, said:
"After the period of restricted operational activity caused by
the COVID-19 pandemic, I am delighted we can announce the progress
we have made towards being able to turn the West Rustavi wells back
on and commence gas sales. I thank Roger for his contribution to
the Board and am delighted that he continues to make his expertise
available to the Company."
This announcement contains inside information which is disclosed
in accordance with the Market Abuse Regulation which came into
effect on 3 July 2016.
For further information please visit
http://www.blockenergy.co.uk/ or contact:
Paul Haywood Block Energy Plc Tel: +44 (0)20 3980 6250
(Chief Executive Officer)
Neil Baldwin Spark Advisory Partners Limited Tel: +44 (0)20 3368 3554
(Nominated Adviser)
Peter Krens Mirabaud Securities Limited Tel: +44 (0)20 3167 7221
(Corporate Broker)
Billy Clegg / Owen Roberts / Violet Wilson Camarco Tel: +44 (0)20 3757 4980
(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.
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 in the onshore
oil producing Norio and Satskhenisi fields. In March 2020, it
entered into a conditional sale and purchase agreement to acquire a
company that owns Georgian onshore licence Block IX and XI(B) .
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. Mbbls: thousand barrels.
3. MMbbls: million barrels.
4. MMCF/d: million cubic feet per day.
5. BCF: billion cubic feet.
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