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Block Energy PLC   -  BLOE   

AGM Statement

Released 07:00 20-Dec-2018

RNS Number : 9638K
Block Energy PLC
20 December 2018
 

Block Energy Plc / Index: AIM / Epic: BLOE.L / Sector: Oil and Gas

20 December 2018

Block Energy Plc ("the Company", "Block" or "the Group")

AGM Statement

 

Block Energy Plc, the exploration and production company focused on the Republic of Georgia, is holding its Annual General Meeting ('AGM') later today. At the meeting Block's Chief Executive Officer, Paul Haywood, will make the following statement:

 

"Block Energy became one of the first oil and gas companies to join AIM this year, with an oversubscribed £5 million raise. Our assets comprise a set of producing or previously producing licences in business-friendly Georgia; a first-class team both here in London and onsite; and a robust strategy to develop the proven and substantial resources across our licences.

 

"Our three licences have 1.6 million barrels of proven reserves and substantial development potential: specifically, gross contingent oil resources (2C) of 72.9 MMbbls of oil and 626 BCF of gas (Source: Competent Person's Report completed by Gustavson Associates, 1 January 2018). With a location in the heart of Georgia's hydrocarbon region, and Schlumberger active in a neighbouring acreage, we are confident we have the right assets to reach breakeven production rates in the near term, and to go on to build a highly profitable oil and gas company.

 

"The considerable investment made across our licences by previous operators - in particular the drilling of multiple wells and the acquisition of seismic data - has allowed us to begin our work programmes with minimal outlay. Initial operations are designed to take advantage of our fields' proven oil production potential, to upgrade contingent resources to reserves and to test the substantial gas resources at our West Rustavi permit. With funding in place, the promise of attractive netbacks of US$30-35 per barrel for oil and US$2.6/MCF for gas, we are well placed to turn the resulting enhanced reserve base into profitable production. 

 

"Since our IPO in June we have secured rigs and equipment at more attractive rates than originally anticipated, identified an innovative perforation drilling technology with the potential to significantly increase flow rates and assembled experienced teams in Georgia and London. By October we were ready to embark on a multi-well workover and sidetrack programme at our Norio field targeting a 25-fold increase in production to 250 bopd by H1 2019. In addition to our Norio operations we have begun a dual-focused work programme at West Rustavi, where we are aiming to produce 650 bopd through the drilling of two sidetrack wells in Q1 2019, and to re-test a historic gas discovery. 

 

"Work at West Rustavi has got off to an excellent start. Earlier this month we announced the recovery of more than 500 barrels of oil from an existing vertical wellbore ahead of the horizontal sidetrack programme due to start early next year. We plan to build the production rate from our Norio and West Rustavi operations by the end of H1 2019 to 900 bopd, which at current oil prices would generate annual revenues of circa US$13 million. We believe our current £7 million market capitalisation significantly undervalues our assets, given the potential of our current operations at Norio and West Rustavi, the opportunities presented by four additional sidetrack targets, the gross 608 BCF gas resources at West Rustavi, the additional workover opportunities at Norio, and the 28 MMbbl of gross 2C contingent resources at Satskhenisi. 

 

"With operations now well underway we believe the weeks and months ahead will prove our confidence in our strategy is well founded. I am disappointed the market has not yet responded to the progress we have made, but as operations at Norio and West Rustavi progress investors will have opportunities to recognise our inherent value, strong balance sheet and re-rating potential.

 

"I would like to give special thanks to investors who backed our IPO for entrusting the Company with their capital and believing in our proposition. And I'd like to thank our team for their hard work. To have achieved all we have just months after our AIM admission testifies to the calibre of our personnel, both in London and onsite in Georgia. I look forward to providing further updates to shareholders in the New Year."

 

**ENDS**

 

For further information visit www.blockenergy.co.uk or contact:

 

Paul Haywood

Chief Executive Officer

Block Energy Plc

Tel: +44 (0) 20 3053 3631

Neil Baldwin

(Nominated Adviser)

Spark Advisory Partners Limited

Tel: +44 (0) 203 368 3554

Craig Fraser

(Joint Corporate Broker)

Baden Hill, a trading name of Northland Capital Partners ltd.

Tel: +44 (0) 20 7933 8731

Colin Rowbury

(Joint Corporate Broker)

Novum Securities Ltd

Tel: +44 (0)207 399 9427

Frank Buhagiar / Juliet Earl

(Financial PR)

St Brides Partners Ltd

Tel: +44 (0) 20 7236 1177

 

Notes:

Block Energy (BLOE.L) is an AIM quoted oil and gas company with a growing portfolio of production, development and exploration assets in the Republic of Georgia. Block holds a 100% Working Interest ('WI') in the producing Norio licence, a 90% WI in the producing Satskhenisi licence and a 25% WI in the West Rustavi licence with the right to farm-in to up to a 75% WI.

 


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AGM Statement - RNS