The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.

Less Ads, More Data, More Tools Register for FREE

Pin to quick picksBlock Energy P. Regulatory News (BLOE)

Share Price Information for Block Energy P. (BLOE)

London Stock Exchange
Share Price is delayed by 15 minutes
Get Live Data
Share Price: 1.55
Bid: 1.50
Ask: 1.60
Change: 0.00 (0.00%)
Spread: 0.10 (6.667%)
Open: 1.55
High: 1.55
Low: 1.55
Prev. Close: 1.55
BLOE Live PriceLast checked at -

Watchlists are a member only feature

Login to your account

Alerts are a premium feature

Login to your account

MOU Agreed for Hire of Drilling and Workover Rigs

10 Sep 2018 07:00

RNS Number : 1990A
Block Energy PLC
10 September 2018
 

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

10 September 2018

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

MOU Agreed for Hire of Drilling and Workover Rigs

 

Block Energy Plc, the exploration and production company focused on the Republic of Georgia, is pleased to announce execution of a non-binding Memorandum of Understanding ('MOU') with Georgia-based drilling contractor, JSC Norio Oil Company ('NOC'), for the provision of a drilling and a workover rig. Subject to a final agreement, these will be utilised on the 2018/2019 work programmes across Block's three licence areas: Norio (100% working interest), Satskhenisi (90% working interest) and West Rustavi (75% working interest after earn-ins described below) which collectively have net proven oil reserves of 1.5 million barrels plus 61 million barrels of oil and c.473 billion cubic feet ('bcf') of gas classified as net unrisked 2C contingent resources. 

 

Workover Rig

Subject to a final binding agreement, NOC will provide an A50 workover rig that will be used to undertake a short three well workover programme at Satskhenisi before being moved to the nearby Norio licence where eight candidate wells have been selected for workover. Block is aiming for the eight Norio wells to be completed and on production by Q1 2019. It is anticipated that the rig will also be used at West Rustavi, where two wells will be prepared for side tracks and the re-testing of a legacy gas discovery in the Lower Eocene, a play being targeted on neighbouring licences by Schlumberger, the leading oil and gas services provider and operator. Under an existing agreement, the preparation of the two wells at West Rustavi will trigger an increase in the Company's working interest in the West Rustavi licence to 50% from 25%.

 

Drilling Rig

In addition, it is planned that NOC's ZJ40 drilling rig will drill two high impact horizontal side tracks in the West Rustavi permit during Q4 2018 / Q1 2019. Targeting initial oil production of c. 600 barrels per day. The two side tracks will increase the Company's working interest in the West Rustavi licence to 75% from 50%.

 

Related Party Transaction

NOC is connected to Georgia Oil and Gas Limited ("GOG"), which currently owns 32,762,415 shares in the Company representing 12.64% of Block's current issued share capital. As such, GOG and NOC are regarded as related parties under the AIM Rules for Companies. Completion of the final agreement relating to matters envisaged by the MOU will be a related party transaction, and subject to the usual Rule 13 requirements of the AIM Rules. It is expected that a final agreement will be announced shortly.

 

Paul Haywood, Director of Block Energy, said: "The MOU signals the start of exciting times for Block during which shareholders can expect high-impact news flow on work programmes commencing across our three licence areas in Georgia. Following a comprehensive tendering process, the principles for favourable terms for rig contracts have been negotiated which we expect, once finalised, will secure considerable cost savings.

 

"The Company is fully funded to complete the first of a three phase work programme focused on scaling up production to a gross 900 barrels of oil per day within 24 months and on testing legacy gas discoveries at West Rustavi, which have been assigned 600 bcf of gross, unrisked contingent resources. The MOU secures two suitable rigs for the Company for a period of 12 months, giving us the flexibility and security to execute and complete our first phase of work before immediately moving into phase two with the same rig and crew. Furthermore, the terms of the agreement reduce the risks related to rig availability and cost overruns associated with hiring on a daily rate basis. We look forward to providing further details of the final contracts along with updates as operations get underway."

 

Roger McMechan, Technical Director, has reviewed the reserve, resource and production information contained in this announcement. Mr McMechan is a BSc, Engineering from the University of Waterloo, Canada and is a Professional Engineer registered in Alberta.

 

**ENDS**

 

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

 

Paul Haywood

Executive Director

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 LLP

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. Block's three licences lie in the heart of the Schlumberger's 100% held position in the Kura basin, which at its peak produced ~70,000 barrels of oil per day ('bopd') in Georgia and is estimated to hold over 7 billion barrels of proven reserves in Azerbaijan and North Caucasus (Russia).

 

The licences currently hold estimated net proven oil reserves of 1.5 million barrels plus 60 million barrels unrisked contingent oil resources ('2C'). Furthermore, the West Rustavi permit has estimated gross unrisked contingent gas resources (2C) of 608 bcf. Multiple gas discoveries have already been made in the Lower Eocence and Upper Cretaceous within the Licence and lie on trend with the same play currently being targeted by Schlumberger on neighbouring licence, Block XIb. The estimated cost of gas development and production at West Rustavi is c.US$2.00/Mcf which equates to operating netbacks of c.US$2.6/Mcf (assuming a 75% working interest) - Georgia currently purchases its gas for c.US$5.5 /Mcf (c.US$600m project value to the Company). 

 

Appraisal of West Rustavi is being conducted contemporaneously with the rehabilitation of the producing Norio (100% WI) and Satskhenisi fields (90% WI) which provide immediate production uplift on commencement of field operations in Q3. The near-term target is to raise production to 900 bopd from 15 bopd within 18 months via a low cost, low risk workover and sidetrack programme, and then to utilise the cash flow to drill horizontal wells and sidetracks to raise production to c.2,000 bopd. Oil production on the fields offers excellent netbacks, with the current cost of production of c.US$25 per barrel providing netbacks of c. US$30-35 per barrel.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
DRLDKLFBVKFBBBD
Date   Source Headline
27th Sep 20227:00 amRNSDrilling Update
14th Sep 20227:00 amRNSOperations Video Update
13th Sep 20224:32 pmRNSBoard Change
5th Sep 20222:05 pmRNSSecond Price Monitoring Extn
5th Sep 20222:00 pmRNSPrice Monitoring Extension
5th Sep 20227:00 amRNSDrilling Update
2nd Sep 202212:27 pmRNSDirector/PDMR Shareholding
3rd Aug 20221:33 pmRNSResults of Annual General Meeting
2nd Aug 202210:38 amRNSIssue of Options and Shares and PDMR Dealing
1st Aug 20221:20 pmRNSWest Rustavi/Krtsanisi Field CPR - Replacement
1st Aug 202212:02 pmRNSWest Rustavi/Krtsanisi Field CPR - Replacement
1st Aug 20227:00 amRNSWest Rustavi/Krtsanisi Field CPR
26th Jul 20227:00 amRNSOperations Update
12th Jul 20227:00 amRNSCompletion of Minimum Work Programme
11th Jul 20227:00 amRNSQ2 Operations Update
8th Jul 20227:00 amRNSNotice of AGM
6th Jul 20227:00 amRNSIssue of Options and Shares and PDMR Dealing
1st Jul 20227:00 amRNSAudited Results
21st Jun 202211:06 amRNSSecond Price Monitoring Extn
21st Jun 202211:00 amRNSPrice Monitoring Extension
6th Jun 202210:36 amRNSIssue of Options and Shares and PDMR Dealing
5th May 20227:00 amRNSDirector/PDMR Shareholding
27th Apr 20224:40 pmRNSSecond Price Monitoring Extn
27th Apr 20224:35 pmRNSPrice Monitoring Extension
22nd Apr 20222:00 pmRNSHolding(s) in Company
8th Apr 202212:37 pmRNSDirector/PDMR Shareholding
8th Apr 20227:00 amRNSDirector/PDMR Shareholding
7th Apr 20227:00 amRNSQ1 Operations Update
4th Apr 20227:00 amRNSDirector/PDMR Shareholding
9th Mar 20222:06 pmRNSSecond Price Monitoring Extn
9th Mar 20222:01 pmRNSPrice Monitoring Extension
2nd Mar 20227:00 amRNSDirector/PDMR Shareholding
24th Feb 20227:00 amRNSJKT-01Z Update
22nd Feb 202211:06 amRNSSecond Price Monitoring Extn
22nd Feb 202211:00 amRNSPrice Monitoring Extension
11th Feb 202211:40 amRNSExercise of Options and Issue of Shares
3rd Feb 20227:36 amRNSDirector/PDMR Shareholding
25th Jan 20224:41 pmRNSSecond Price Monitoring Extn
25th Jan 20224:35 pmRNSPrice Monitoring Extension
24th Jan 20227:00 amRNSWell and Operations Update
11th Jan 20227:00 amRNSQ4 Operational Update
5th Jan 20229:51 amRNSShare Options and PDMR Dealing
16th Dec 20217:00 amRNSDrilling Update
9th Dec 20217:00 amRNSAppointment of SID
6th Dec 20217:00 amRNSIssue of Options and Shares and PDMR Dealing
24th Nov 20217:00 amRNSOperations Update
12th Nov 20214:40 pmRNSSecond Price Monitoring Extn
12th Nov 20214:35 pmRNSPrice Monitoring Extension
12th Nov 20217:00 amRNSDrilling Update
2nd Nov 20219:42 amRNSIssue of Options and Shares and PDMR Dealing

Due to London Stock Exchange licensing terms, we stipulate that you must be a private investor. We apologise for the inconvenience.

To access our Live RNS you must confirm you are a private investor by using the button below.

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.