TIDMBLOE
RNS Number : 7482M
Block Energy PLC
16 January 2023
16 January 2023
Block Energy plc
("Block" or the "Company")
Q4 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 December 2022.
Highlights
-- Over 135,290 operational man-hours worked in Q4 2022, with one minor Lost Time Incident
-- Commenced Project II (Patardzeuli full-field redevelopment),
drilling and testing the JSR-01 DEEP well on time and budget.
Encouraging results, confirming unswept oil in the Field, support
the continuation of the project.
-- The Company has upgraded its service rig to undertake
low-cost drilling and workover operations in the shallow reservoirs
of all its fields and in particular will support the advancement of
Project II.
-- Drilling operations on well WR-B01Za commenced in December,
with operations progressing as planned
-- Binding agreement signed for the farmout of non-core areas of
licence XI in exchange for work programme valued at c. $3m
gross.
-- Q4 production of 34.4 Mboe (Q3: 37.1 Mboe) or an average of 374 boepd
-- Q4 revenue of $1,840,400 (Q3: $1,833,000)
Health, Safety & Emissions
Over 135,290 operational man-hours have been worked by staff and
contractors in Q4, and over 382,542 in the twelve months ended 31
December 2022, with one minor LTI.
The Company again sought to minimise emissions, in-line with its
commitments, but was required to flare 300,000cum of gas due to the
temporary shutdown of the Bago gas pipeline and electricity outages
prior to the installation of the generator at the early production
facility.
The Company has implemented a procedure for the recording of
Project I emissions and is working to reduce other emissions
further. In 2023, the Company plans to record Scope II emissions
and fulfil its intention to reduce those emissions also.
Operations
Drilling operations on well WR-B01Za are progressing as planned,
with operations having commenced in mid-December. Well WR-B01Za is
targeting a fracture system identified by a high density of seismic
attribute lineations on the west side of the Krtsanisi anticline on
the West Rustavi oil field. The well is located 500m to the west
and up-dip from the successful JKT-01Z well, which has been on
continuous production, providing significant returns on the
original investment.
Well JSR-01 DEEP successfully confirmed the concept of unswept
oil in the Patardzeuli Field. This encouraging result supports the
Company's continued advancement of Project II and the development
of the Patardzeuli oil Field.
Well JSR-01 DEEP was safely drilled to a depth 470m deeper than
the original donor well and was successfully completed below
budget. The well was drilled at an inclined angle, allowing the
testing of different zones to help evaluate the remaining oil
potential and inform future drilling and development plans. The
well has been handed over to the production operations team.
Corporate
The Company entered a binding agreement for a 50% farmout of
non-core areas of Licence XI 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 $0.5m for seismic
reprocessing ("Project IV").
The farmout advances the Company's exploration opportunities
through a sizable work programme at no cost to the Company. None of
the existing fields, current production nor future development
plans associated with Projects I, II and III, within Licence XI ,
are subject to the farm-out.
Furthermore, in late November 2022, SLB (previously
Schlumberger) notified the Company of its decision not to exercise
its right to acquire 108 million ordinary shares in Block Energy
plc. This decision creates a significant gain in value for Block
and a reduction in dilution for our shareholders.
The options had been granted in 2020, as consideration for the
acquisition of the Schlumberger Rustavelli Company Limited, which
provided Block with additional production, material additional oil
reserves, significant gas resources, oil inventory, materials and a
US$ 133 million cost recovery offset for the profit sharing
allocation with the State.
Oil and Gas Production
During Q4, gross production (including the state of Georgia's
share) was 34.4 Mboe (Q3: 37.1 Mboe), comprising 27.4 Mbbls of oil
(Q3: 28.1 Mbbls) and 7.0 Mboe of gas (Q3: 9.0 Mboe). The average
gross production rate for Q4 was 374 boepd (Q3: 404 boepd),
Production during the quarter was adversely affected by
increased pump maintenance, requiring production wells to be
temporary shut-in.
During 2022, gross production (including the State of Georgia's
share) was 183 Mboe (2021: 156 Mboe), comprising 120 Mbbls of oil
(2021: 101 Mbbls) and 63 Mboe of gas (2021: 55 Mboe).
Oil Sales
In Q4 2022, the Company sold 21.3 Mbbls of oil (Q3: 17.9 Mbbls)
for US$ 1,691,400 (Q3: US$ 1,614,000), at a weighted average price
of US$ 79 per barrel (Q3: US$ 92 per barrel), which represents a
c.5% increase in revenue and a 14% decrease in the realised oil
price quarter on quarter.
During 2022, the Company sold 84.9 Mbbls of oil (2021: 86.7
Mbbls) for US$ 7,492,600 (2021: US$ 5,519,000), resulting in a
weighted average price of approximately US$ 89 per barrel (2021:
US$ 64 per barrel), which represents a 39% increase in the realised
price in 2022 compared with 2021.
Gas Sales
In Q4 2022, the Company sold 27.3 MMcf of gas (Q3: 36.1 MMcf)
for US$ 149,000 (Q3: US$ 192,000), resulting in a weighted average
price of approximately US$ 5.45/Mcf (Q3: US$ 5.31/Mcf).
During 2022, the Company sold 170 MMcf of gas (2021: 191 MMcf)
for US$ 769,620 (2021: US$ 596,000), at a weighted average price of
US$ 4.52/Mcf (2021: US$ 3.11).
Block Energy plc's Chief Executive Officer, Paul Haywood,
said:
"Block made significant progress in the fourth quarter, which
further strengthens our position and ability to deliver on the
potential of our extensive assets in Georgia. In addition to
another quarter of solid revenue generation, the Company was able
to drive Projects I and II forward, while also creating exposure to
material exploration upside at no cost, through the farmout.
Meanwhile drilling of well WR-B01 Za is ongoing and progressing to
plan. We look forward to providing further updates on our
progress."
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.
**S**
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 AMED. 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 XI(B) . Licence block XI(B) 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 XI(B) 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 XI(F)
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 1.07 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, ERCE 2022).
In 2022, a Competent Person's Report provided by ERCE, ascribed
3P reserves of 3.01 million barrels, with an NPV project value of
USD 57 million, to just a portion of the West Rustavi/Krtsanisi
Middle Eocene reservoir.
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.
-- MMbbls: million barrels.
-- MMboe: million barrels of oil equivalent.
-- MMcf: million cubic feet.
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 or visit 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.
END
UPDFZGMMFKRGFZM
(END) Dow Jones Newswires
January 16, 2023 02:00 ET (07:00 GMT)
Block Energy (LSE:BLOE)
Historical Stock Chart
From Jan 2025 to Feb 2025
Block Energy (LSE:BLOE)
Historical Stock Chart
From Feb 2024 to Feb 2025
