Member Info for Spudsoil

I’ve been invested since around 2020 and weirdly, considering the SP, this is about as confident I have been since making that investment. That confidence may be misplaced but I can’t understand how a company can cease drilling for new oil and pivot towards gas and carbon capture without being confident of a good result. Law of averages suggests something good is going to come from one of the ‘we need a partner’ projects. Whether that’s a game changer or something that fails to shift the Share price dial significantly, who knows.

I’d be amazed if interest in this share doesn’t pick up materially over next few weeks or months - too much upside potential for it not to.

It’s an AIM O&G share - long periods of limited news where the share price drags, followed by spikes of activity where the price tends to increase quickly. Based on the likelihood of news in the next few months hopefully we’ll be entering one of of our spiky periods soon. The challenge is for the company to plateau after that spike at a higher mcap - hopefully the news is good and that plateau is in the 2,3,4 etc SP range. A quadrupling of our SP would take us to a mcap of around £28m.

Useful update from PH and the confidence around the cash flow and oil production is pleasing to hear. It feels like we are in a holding pattern pending news on multiple fronts, with each of those bits of news potentially taking the company to the next level. Project 3, 4 and the Ccs are all significant, and am sure would get a broader cohort of investors sniffing around if positive news is forthcoming. Hopefully some investor interest will build over the next few months, surely there’s a floor on our SP around this level, am feeling positive that between now and spring 2025 the company’s time in the spotlight will arrive, let’s just hope they make the most of it!

Pleased with RNS. We were unlikely to be able to repay loan so this was next best option. We’re in a holding pattern until progress on projects on 3 and 4. Happy with latest production figures given lack of new wells. Next few months should be busy in terms of pushing forward any agreements.

I don’t think the awards given out for 2023 are particularly controversial. If you look at the progress being made financially and commercially then the business is getting itself in to decent shape. I remain worried about cash flow given the lack of new drilling. I remain optimistic that they have a plan to bridge any financial gap that exists between now and when funding is secured to press on with the various projects. It’s a waiting game now to see what happens first - a deal or the refinancing of the loan in August.

I should add, I wish they would do both but presumably the balance sheet doesn’t stretch that far

Not posted for a while but continue to be invested and looking on in hope and expectation. What’s intriguing me is why an O&G company effectively grinds its oil production expansion plans to a halt and pivots to gas. I can only guess why - perhaps a hurry up from the govt, perhaps a tentative approach from a bigger player on the gas. Who knows but it seems to me that the company is either very confident that project 3 will deliver a financial injection in the near term, or they are absolutely winging it! Despite the numerous strategic pivots we’ve seen in recent years I do remain optimistic that 2024 will be a good year for the company. I just can’t see any business being so crazy as to halt its bread and butter product and go for the bigger prize without a high level of confidence they can pull it off.

Nice to see the video , thanks for sharing. Unclear why this hasn’t been picked up in the UK investment media or an equivalent UK based version recorded. Some important info contained in it and it confirms the size of the prize for both oil and gas.

What I’m not clear on is how we go from Dec 23 to what sounds like maybe Q3 or Q4 2024 for a (potential) farm in deal - based on PH’s comments around the gas project being independently verified some time in Jan and bolting on a 3 to 6 month marketing campaign. So very best case the company proceeds at pace, lots of interest in the proposal from big players and we sign a deal in Q2. Realistically I’d say it’s more likely to be later in 2024 or early 2025 as these things take time.

So what happens in between? Does project 4 give us some payback - it doesn’t sound like it although in fairness there may be marketing activity underway already being led by the partner. I’d rate an income or payback from this project as possible but unlikely before 2025.

So we come back to project 1 and 2, the requirement to pay down debt in the next 18 months and the requirement to fund ongoing operations.

You would hope there is a plan and I think we’ll get news of the next spud over the next few weeks, weather dependent.

I’m not sure there’s anything too sinister happening here. I think the company is going through a slow news period, accumulating funds to pay for the next drill and using existing funds to support project 3 development.

Who knows? Certainly not me, the lack of communication is frustrating but I’d almost rather hear nothing than some of the twitter posts that appear to be written by a teenager on work experience. They add no value or credibility.

Here’s hoping we get news of the next drill soon, and maybe we only need another couple of drills after that to keep things ticking over until the sexy projects get to a stage where the company starts to see payback. We could then be looking at special dividends which would like the pockets of PH, the patient institutional investors who’ve been here since the beginning, and us long suffering share holders.

Heps- agree with your suggestions, I’ll add another. They are retaining a cash balance to enable a commitment to whatever the plan is on the gas. Maybe the requirement of the GG is that we hold a certain cash reserve before they sign off on a deal. And block don’t want to raise at these prices so they pause cash out activity, wait for the gas off take deal to be signed and then assess lay of the land. Radio silence doesn’t help but this is proper radio complete silence including nothing on twitter. so either a problem, a deal, or PH becoming ever more ignorant of shareholder concerns. I’m not sure the third is actually possible so I’m going 1 or 2.

I hope we hear something on project 3 sooner than most expect. It seems to be progressing quietly in the background according to the latest comments from the company. Once we get the opportunity signed off, the expectation of a farmout will, I hope, finally get this share registered among more investors horizons. The opportunity is massive, way bigger than anything Block can achieve alone, and they have already confirmed they will be seeking a farmout - that brings with it all sorts of different opportunities dependent on the deal sought and what is offered by any interested party. If project one and two trundle along in the background all we really need them to do is keep us cash flow positive. Q3 should be some solid financials, q4 likewise given the elevated oil price. We definitely need success at the next well to avoid further dilution but our track record in recent months is strong. If we think a farmout could happen by end of 2024 then production figures from projects 1 and 2, plus legacy wells of 600-800boepd over the next 5 quarters would be ok. Not much in short term to get excited about, but looking ahead in to 2024, there’s a good chance the company’s profile improves and that in turn should attract new investors.

I wonder if the farm out process will conclude with payment of a special dividend. Might sound a little far fetched but a healthy divi would satisfy longstanding shareholders who are underwater here, including II’s who have gone very quiet. I don’t see much else happening to excite the pulse over the next few qtrs. What is apparent is the slow pace of activity around projects 1 and 2 is presumably down to lack of cash flow. And we have Groundhog Day with project 1 where presumably we are back to the starting point for the next drill, so even if it produces successfully it will likely only cover the drop off in group production between now and when it comes on to production in six months or so. At least Brent is priced substantially higher now than it was in H1. I’d love to be proved wrong but I can’t see much of interest occurring until substantive news on project 3 (or 4) is released.

Market reaction is understandable given drop in group production. 34z results at lower end of expectations which adds to the feeling of deflation. However the well has been successfully brought on to production and is making up for the qtr on qtr drop in production, which I calculate to be approx 18%. Good to hear the other 2 project 1 wells performing above expectations, which only makes the production volume quoted today all the more mysterious. I’m sure we’ll get an explanation in the qtr 3 update if not the H1 results update. If there’s a fixable reason for the drop coupled with a forward plan that has more pace to it, then I think we’ll see an improvement in market sentiment.

Cheers Looed, so we’ve got YA next month, what’s the case scheduled for 2024?

Slide 14 - no mention of PR/Comms/Marketing personnel. Unless they are grouped under ‘administrative’ which would be unusual. Maybe that’s why the company struggles to get the attention it perhaps deserves.

Good reminder of potential…. It’s massive

https://www.blockenergy.co.uk/wp-content/uploads/2023/02/Corporate-Presentation-Feb-2023.pdf

Any O&G techheads out there know if the field Block is working on and the technique the company is using means we are capable of producing a gusher? Expectations seem to be quite mundane when the company talk about potential flow rates in advance of drills, just wondered if there is a chance we could completely knock one out of the park, or whether there is a realistic cap we should place on expectations?

MY wish list for the next few weeks:

1. Well results 400+ boepd. Would represent genuine progress in terms of well performance. They’ve talked a good game for a while here, so a nice juicy number above 400 would be great.

2. Confirmation the next spud will take place within a few weeks of the RNS. Unless the results from 34 alter the strategy I don’t see a reason why we can’t move straight on to next drill. Cash flow should not be an issue.

3. Further info on project 3 - a timeframe setting out objectives over the next 12 months would be useful.

4. Update on project 4 - future phases and involvement of/benefit to the company

5. project 2 - surely we are overdue concrete info on this.

Confident if we get a detailed froward plan the SP will react positively, if it’s supported by strong performance from 34 we should be kissing the current SP range goodbye

Great article David, we need more PR like this for Block. Do you have an open line of communication the company? If so, please can you encourage them to share a detailed proposed timeline of activity over the next 12 months. I feel that aspect is sorely lacking and almost certainly contributes to a lack of appeal in the company and thus the share price. I don’t think I’m oversimplifying it when I say that a clearer forward plan communicated to the market is bound to positively impact the share price, which is a win-win for investors and Bloe alike.

Rlightor, the numbers I used were for illustration purposes and to demonstrate that unless we speed up the pace of drilling we will inch forward rather than leap forward. Thanks for sharing the quarterly date Hepseal, helps to bring the point to life. We’ve been in the 400 to 600 range for years, now looking like we could break out of that range, but that break out needs to be sustained. 660 boepd plus current well - let’s say we get a decent result of 340 boepd - takes us to 1000. But if we then wait 7 months for next spud, plus a 2 month drill, you’re looking at 9 months before next potential meaningful addition to production. Shorten that 7 month window between drills and it’s a very different picture, including the ability for us to better absorb the odd duff well. Hence why I think it’s so important for Bloe to communicate a drilling programme that reflects an increased pace of operations (that shouldn’t be a big ask given increased cash flow, new debt, and ever improving knowledge of the geology and associated data).

I suspect the above is the reason we don’t see more interest in this share. If Bloe RnS’d a detailed drill programme with firm dates aligned with an aggressive timeframe I think that would have a more positive impact on the share price than a decent result from the current drill as investors would be able to see a genuine path to growth. Hopefully we’ll get both in the next few weeks, and I’d be delighted to see another drill completed by year end, I’d be flabbergasted if we manage two.

As much as the result from the current test is important, I think equally significant for the company’s prospects is how quickly they move on the next drill. Undoubtedly the company is making progress however I can’t get too excited until we move on from the phase of 3 steps forward (e.g. 300 Boe new production) and 2 steps back (e.g. 200 boe drop in current production between the drilling of each well). If we can improve that ratio I think that’s when the market starts to take notice. Until then we are always one dodgy drill away from a reduction in cash flow and you can’t grow a business quickly or prudently in that state.