RE: Good, solid results these and look at the cash!!24 May 2025 15:05
From recent Tennyson broker report:-
commercial gas sales from an Early Production Facility (EPF). Such a facility would likely be capable of delivering
around 20 mmscf/d (c.3,300 boepd), equivalent to almost US$40m of annual revenue net to
the contractor at current domestic prices. Dependent on how much of the asset Block would
have to farm down, this is likely to increase current sales by a number of factors, and given the
fixed overheads are unlikely to increase significantly, should have an even greater impact on
EBITDA. On a 60% EBITDA margin, which would be a reasonable ‘ballpark’ estimate, an EPF
could generate US$24m net to the contractor, and making a simple assumption that Block gives
up 50% of the asset, this would mean an incremental US$12m of EBITDA net to Block.
Arguably more significantly, a successful EPS will significantly de-risk the 2.7 Tcf of discovered
2C resources, which Block believes could support annual production of as much as 500 mmscf/d
(>80 kboepd). This has an unrisked NPV10 of US$1,658m (135p/shr), and therefore derisking
could have a significant impact on Block’s share price, even with heavy discounting.
That's just project 3! A commercial CCS project and a farm out of project 4 (forgetting project 1 and 2 for now) will add even more to the share price. If we can get a full carry to gas production of circa 80k boepd then the SP will absolutely rocket, the initial EPF of 3k boepd is going to send us to 20p without the CCS, if we add a successful pilot and a clear route to commercialisation then 30p, 40p who knows?? As Phillip Dimmock just said in the final report "we are at an inflection point ' I totally agree 👍
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