Masterinvestor.... co ... uk8 Jun 2019 18:49
This is just part of post on the above site... also retweeted by Block Energy on Twitter... if already posted apologies but still a good read again.
Shares in Block Energy are up by more than 200% in the last year and there is so much more to go for yet, argues Mark Watson-Mitchell.
Well, what a year it has been for Block Energy (LON:BLOE), the AIM quoted oil and gas company. It floated on 11th June last year, raising £5m by way of an oversubscribed placing and subscription of 125m new shares at just 4p each. That valued the company at £10.3m on its admission.
Since then the shares have been up to 17.7p, before falling back to trade at around the 13p level, due to a recent two-stage £12m fund raising at 11p per share. By the second stage (this Thursday) the company will then be valued at just under £50m.
Now that is what this stock market is all about – raising new capital for growing companies, using market experts in funding. Hopefully there will be more such fund issues as the company’s interests mature.
Until April 2017 the company was Goldcrest Resources plc. It was a gold and copper focused exploration company, with interests in projects primarily in Ghana and Mauritania. In that month the company amended its strategy to focus on oil and gas projects in the Republic of Georgia. It changed its name to Block Energy plc in May 2017.
The company holds three oil and gas assets, with existing oil production in the Republic of Georgia. These are: the Norio PSA, in which the Company has a 100% working interest; the Satskhenisi PSA, in which it has a 90% working interest; and the West Rustavi PSA, with a 71.5% working interest (but also with an agreement in place to take the company’s working interest to 100% by 31stAugust 2019).
The owner of the balance of the working interests in the Satskhenisi PSA and the West Rustavi PSA is Georgia Oil and Gas, which is an 8.77% shareholder in the company’s recently enlarged equity and is also one of Georgia’s largest oil and gas asset holders. GOG is an established operator and is one of the company’s service providers.
Block Energy operates in Georgia, a geographic area close to one of the companies I covered last week, Genel Energy (LON:GENL) in the Kurdistan Region of Iran, next door to both Turkey and Armenia.
Georgia is a low cost, stable economic and political regime. It has a liberal democracy, pursuing a pro-Western foreign and economic policy. Over the last decade its economy has grown by an average of 4.5% per annum. The country is tightly bound into the global community through membership of the WTO, the Asian Development Bank, the Council of Europe and the EBRD. It is in the Top 10 in the World Bank’s ease of doing business index.
However, most attractive of all of Georgia’s assets is that it has a regulatory environment facilitating a liberalised energy market and a stable framework for production sharing agreements.
The company boasts a management team with unri
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