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Completely agree Shed. I have lots of faith in the company’s ability to secure new deals but there’s a level of basic shareholder respect missing. My worry is that they won’t reinstate the quarterly investor updates (that were cancelled when the gas farm out conversations started, citing commercial sensitivities).

3 tranches of warrants issued for the loan, totalling 135m.

2 tranches (45m) expire 2nd Feb with exercise prices of 1.7p and 1.92p.

1 tranche (91m) expires July 27, exercise prices 0.85p.

Bodes well for the future if this is the sort of deal that is getting structure. I’d be extremely happy if project 3 gets signed off on the same terms!

I’m assuming it gets rolled over on similar terms - rates have dropped since it was originally drawn - unless there’s a cash element to one of the pending deals, but even then seems unlikely it’ll be concluded before end of month.

I do think the next few months has the potential to turbo charge the company if things go well. I just can’t see how we stay as a tiny micro-cap if we get 3rd party validation of CCS, and have initial free carry for 2 farmouts that offer massive upside.

The point on why wouldn’t we get bought out now. We are viewed as high risk (probably super high risk by some). From a ccs perspective once the 3rd party validation is received my view is that’s the catalyst for other companies to look at our potential now it’s been derisked.

You could argue the same for the O&G - once the farm outs are signed and work programmes agreed then we become massively de risked.

Maybe it’s the overhang of shares from the placing. Participants can make 5/10% with current SP. Once that’s cleared, with the pending news due this qtr you’d hope the SP picks up (potentially significantly)

Can someone help me understand the second part of the statement from the RNS:

The result reflects the fall in oil prices in the period together with reduced oil inventory levels at period end of $498,000 (1H 2024: $23,000), which increased cost of sales.

Update on this - the 2025 report is launched 9th October. Will share details in this chat. We didn’t make it in last year, hopefully we’ll have squeezed in this year based on progress. Either way it’ll be an interesting read as it’s a comprehensive overview of the global CCS market

Asked AI most likely partners for project IV:

Block Energy’s “unnamed leading international E&P company” could be one of a small set of operators that (a) have real on-the-ground E&P experience in Eastern Europe / the Black Sea / Caucasus or (b) have been actively expanding in the region recently. The most likely candidates (with why they make sense) are:

Likely candidates and why

1. BP — long, active operator in the Caspian (Azerbaijan: ACG, Shah Deniz) and still expanding Caspian exploration/development. Strong track record working with regional governments and carrying large field developments.  

2. OMV / OMV Petrom — very active in the Black Sea and Romania (operator of the Neptun Deep developments and active on neighbouring Bulgarian blocks via farm-ins). Proven regional capability in both offshore and onshore E&P. 

3. Harbour Energy (ex-Wintershall Dea assets) — Wintershall Dea historically had deep Eastern / SE Europe experience; Harbour’s acquisition of those assets makes it a much bigger upstream player with relevant technical capability and regional footprint.  

4. Eni — active across the wider Black Sea / Mediterranean / Caspian neighbourhood and pursuing cooperation with SOCAR/Azerbaijan; experienced in complex offshore projects and government negotiations. 

5. MOL Group — established Central & Eastern Europe E&P operator (Hungary, Croatia and regional onshore experience) and a credible partner for onshore/cross-border projects. 

6. NewMed Energy / regionally focused independents — smaller but very active players in the Black Sea (NewMed took a 50% farm-in on Bulgaria’s Han-Asparuh) — attractive if Block Energy wants a partner that moves quickly on regional exploration campaigns.  

7. SOCAR / national/regional NOCs or large independents (Perenco, Repsol, etc.) — state companies and seasoned independents are frequently partners in Caucasus / Eastern European deals; SOCAR (Azerbaijan) is especially relevant for Georgia/Caspian linkages. (Note: geopolitics and sanctions risk make some candidates less likely in practice.) 

No but a realistic path to a £50m+ market cap. With potential for much higher.

Whilst I’m clearly not going to endorse or predict specific cash payments Block may receive, I do think our 10% share of IV means any cash payment could be at the modest end of the scale, but it will enhance our reputation as a partner, potentially accelerate conclusion of project III and hopefully enable us to at the very least repay the loan due early in 26.

Combine a debt free company with CCS, slimhole drilling, a carry on project IV and entering the home straight on project III and there’s a lot to like

Final section:

Key Value Levers for Block

1. Strategic position & resource size: ~2.8 TCF and NPV of US$1.65 billion make Block’s asset highly attractive.

2. Government backing: Strategic status and MoU supporting offtake help mitigate regulatory risk .

3. 100% ownership: Block captures the full value — no dilution in play.

4. Development-ready project: Feasibility & engineering work largely complete increases dealability.

⸻

Final Thoughts

• Block’s position — 100% ownership of a large-scale gas asset with ready pipeline access and government support — positions it strongly.

• Realistic expectations:

• Minimum: US$10–50 million plus carry.

• More likely (base): US$50–200 million + carry/royalties.

• Upside (if highly competitive): US$200–500+ million plus value from carried development and possibly long-term royalties.

This is, of course, speculative — actual terms will depend on partner appetite, commodity markets, negotiation dynamics, and regulatory terms.

And summary of thoughts relating to project III:

Context on Project III

• Block Energy owns 100% of Project III, which involves gas resources across Blocks XIB and XIF (Patardzeuli–Samgori, Rustavi, Teleti) and was declared strategically important by the Georgian government .

• Independent reports estimate ~2.77 trillion cubic feet (TCF) of 2C contingent gas resources, with a project-level NPV (10%) of around US$1.65 billion   .

• A formal farm-out campaign launched in early 2024; Block is now in due diligence and discussions with interested parties  .

⸻

Estimating Potential Payments to Block

Since Block has 100% ownership of Project III, all potential payments go directly to Block, unlike Project IV where they only had a 10% interest. Payments could include:

1. Upfront cash payment(s): For transferring or diluting interest.

2. Carry of seismic/appraisal/development costs: Farmee pays for seismic, wells, pilot programs, etc.

3. Royalties or future cost recovery payments: Could be structured over time or based on production.

4. Equity dilution: Farm-in partner acquires percentage in exchange for funding.

Let’s assess based on comparables of similar magnitude and strategic positioning.

Comparable Farm-Out Deals (for 100% farm-owned projects)

1. Apache / Suriname

• Gross cash: US$100 million, plus carry valued at US$5 billion.

• For Block (100% owner), that’d be ~US$100 million plus the full carry value .

2. Impact Oil & Gas – Namibia

• Sale of ~10% for US$99 million.

• If Block offered all of Project III, a sale could theoretically attract hundreds of millions — if geology and pipeline access are competitive .

3. Challenger / Chevron – Uruguay

• Upfront cash: US$12.5 million + seismic & wells carried.

• As a reference for mid-scale deals that include carry .

4. Tower Resources – Cameroon/Namibia

• Cash: US$4.375 million; carry of well and work programme ~US$15 million.

• Smaller scale, but instructive for baseline scenarios .

(Note: These are illustrative; none match Project III in scale. Still, they anchor reasonable ranges.)

Why These Ranges?

• Conservative: If Block simply wants to de-risk the project, a farmee might offer to fully fund early-stage development (e.g., seismic, pilot wells) for a modest upfront payment (e.g., US$10–50 million).

• Base case: Given Project III’s infrastructure-ready nature, pipeline access, and large resource base, well-funded partners could offer upfront cash in the high tens of millions (e.g., US$50–200 million), plus perform significant carry.

• Upside: If global oil/gas majors or NOCs see strategic value — linked to EU gas access or energy geopolitics — they might compete aggressively, with offers potentially topping US$200 million, plus enormous carry and possibly royalty frameworks.

Seems like we are moving from ‘strategic intent’ to ‘strategic delivery’ phase across multiple projects - an exciting few months in store.

Asked some questions to AI on what yesterday’s announcement may mean for 1) likely cash payment to Block for project IV, and 2) how project III might shape up.

Summary of answer to q1:

Block only holds 10% of Project IV (XIb licence) today. The “farmout” is being arranged at the project level (all current partners together), so:

• The cash consideration and royalty disclosed in the final agreement will be to the project partners as a group.

• Block, with its 10% participating interest, would normally receive 10% of any upfront cash and 10% of any ongoing royalty (unless the deal is structured differently, e.g. disproportionate sharing because one partner carried more past costs).

So when I gave an estimated range of US$5–20m base case and ~US$8–15m best guess, that is the gross project-level figure for all parties.

👉 For Block’s net share (10%), you would scale those numbers down:

• Conservative: ~US$0–0.5m net to Block

• Base case: ~US$0.5–2m net to Block

• Upside: ~US$2–5m+ net to Block

Block’s much larger benefit is the carry: it doesn’t have to fund its 10% share of 3D seismic and up to 3 deep wells, which could easily represent tens of millions of avoided spend. That “avoided cost” is usually the most material value for a minority holder like Block.

I posted the below in Oct 24. Have contacted the institute to ask when the 2025 report will be issued and asked if Block’s project will feature this time round. Hopefully our injection phase occurred earlier enough to make us eligible for inclusion this year. Our CCS capacity potential is certainly big enough to qualify!

CCS research19 Oct 2024 08:18

https://www.globalccsinstitute.com/wp-content/uploads/2024/10/2024-GSR_20241015.pdf

Have been doing some research on CCS - link is to a comprehensive annual report on the topic. Interesting background reading, and the market is growing exponentially.

2 things stood out for me:

1. Slightly disappointed not to see Block listed in the list of projects. I’d have hoped we’d be sitting in the early development category. I think it this report documents all known projects underway, so hopefully we’ll make an entry in the 2025 report once our initial analysis completes.

2. Our initial injection rate is proposed at 0.1-0.3 MT. The upper end of that projection would see us contribute around 0.075% of global storage (and that’s based on all projects - those in development phases and operational) so the potential is obvious to see.

We just need to execute the delivery now. We are definitely in early enough to benefit from continuing exponential growth in the market

Pleased with today’s update - gives us momentum for remainder of year, that should bring investor interest which is hope will also be piqued by our multi project strategy - the reality is that we enter into commercial terms on 3 company making projects over the next 6 months.

Question asked: what is the income potential if Block uses 1% of its CCS capacity to support indorama.

Short answer: roughly €75–€256 million total revenue, depending on which Block Energy capacity figure you use and what price per tonne they can charge for storage/transport.

Here’s the quick math:

• Block’s CCS capacity (Georgia, licence XIB)

• Earlier/“high” estimate: 256 Mt lifetime storage. 

• Newer “mid-case” figure cited in 2024–2025 updates: 151.5 Mt.  

• Indorama in Georgia = Rustavi Azot (owned by Indorama Corporation) is Block’s named partner and CO₂ supplier for the CCS pilot/MoU.   

• Typical early-stage CO₂ transport & storage tariffs in Europe are often quoted in the ~€70–100/t range (some analyses note ~€100/t tariffs emerging for first movers), while academic ranges for onshore transport+storage can be as low as $4–45/t depending on geology/logistics. To stay realistic for a first-of-kind project, a €50–100/t service price is a sensible working range.  

If Block uses 1% of its CCS capacity for Indorama

• Using the 151.5 Mt “mid-case”:

1% = 1.515 Mt CO₂

• At €50/t ⇒ €75.8m total revenue

• At €100/t ⇒ €151.5m total revenue

• Using the 256 Mt “high” estimate:

1% = 2.56 Mt CO₂

• At €50/t ⇒ €128.0m total revenue

• At €100/t ⇒ €256.0m total revenue

Note: That’s total potential revenue from handling 1% of the site’s lifetime storage. Annual revenue would depend on the agreed injection rate (e.g., if 1.515 Mt is injected over 10 years, then at €100/t it’s ~€15.2m/yr). The actual tariff would be set by contracts and local cost structure, but the cited figures give a realistic ballpark for early projects.

Our time will come. Multiple projects de risks this share. Can see a £50m valuation no problem if we get a farm out agreed for project 3 or 4, plus some more positive signals on ccs.

Firmly believe we’ll be in different value zone in 12 months.