Thu, 7th Apr 2022 07:00
7 April 2022
Block Energy plc
("Block" or the "Company")
Q1 Operational Update
Block Energy plc, the exploration and production company focused on Georgia, is pleased to announce the following operations update for the three months ended 31 March 2022.
· Over 92,000 operational man-hours worked in Q1 2022, with no lost-time incidents
· Strong exit Q1 production rate of over 630 boepd
· Q1 production of 46.1 Mboe (Q4: 34.6 Mboe) or an average of 512 boepd
· Q1 revenue of $2,361,000 (Q4: $2,550,000)
· Long-lead items received and gathering pipeline being built for well WR-B01 sidetrack
Health and Safety
92,000 operational man-hours have been worked by staff and contractors in Q1 (Q4: 110,000 hours) with no lost-time incidents.
JKT-01Z commenced production in mid-January 2022. Analysis indicates the well is in good communication with the in-place volume of 8 MMbbls associated with long-term producing well KRT-39.
Gas production from JKT-01Z was quickly tied into the gas infrastructure at well KRT-39 to support rapid monetisation. Since mid-January 2022, oil and gas production from JKT-01Z has delivered substantial additional cashflows to the Company, supporting early payback and moving the Company into being cashflow positive.
Preparations for the drilling of the side-track of well WR-B01 continue to make good progress. Many of the long-lead items required to drill two sidetracks have been purchased and already arrived in Georgia. Furthermore, construction of the pipeline from the WR-B01 to WR-38 wellsites, to enable the immediate monetisation of any gas produced from the WR-B01 sidetrack, has commenced.
Oil and Gas Production
During Q1, gross production was 46.1 Mboe (Q4: 34.6 Mboe), comprising 32.1 Mbbls of oil (Q4: 24.9 Mbbls) and 14.0 Mboe of gas (Q4: 9.7 Mboe). The average gross production rate for Q1 was 512 boepd (Q4: 376 boepd).
Production in Q1 was impacted due to well WR-38Z being off-line. WR-38Z was brought back into production at the end of March, replenishing lost production providing a strong Q1 exit rate for daily production of over 630 boepd.
In Q1, Block sold 24.4 Mbbls of oil (Q4: 33.6 Mbbls) for $2,168,000 (Q4: $2,441,000), resulting in a weighted average price of approximately $89 per barrel (Q4: $73 per barrel), representing a 22% increase in the realised price in Q1 compared with Q4.
In Q1, the Company sold 48.4 MMcf of gas (Q4: 36.1 MMcf) for $193,000 (Q4: $109,000), resulting in a weighted average price of approximately $4.00/Mcf (Q4: $3.03/Mcf).
As at 31 March 2022, Block had $1.2 million cash at bank (31 December 2021: $1.2 million).
Block Energy plc's Chief Executive Officer, Paul Haywood, said:
"As the first quarter production results demonstrate, the Company is delivering operationally, which combined with improved commodity prices, creates a robust financial result. This gives us a stronger platform to deliver on the inherent value of Block's assets and monetise the wider reserves and resources within our portfolio. We believe we now have a better understanding of the subsurface, which we have translated into a practical plan to grow production and create value for shareholders. While we can do this with our existing resources, we are also looking into non-dilutive financing options to accelerate production growth, and other ways to enhance value for shareholders."
Jonathan Bedford (Block's Technical Manager) has reviewed the reserve, resource and production information contained in this announcement. Mr Bedford has an MSc in Petroleum Geoscience from the University of Aberdeen and is a petrophysicist.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
For further information please visit http://www.blockenergy.co.uk/ or contact:
(Chief Executive Officer)
Block Energy plc
Tel: +44 (0)20 3468 9891
Spark Advisory Partners Limited
Tel: +44 (0)20 3368 3554
Tel: +44 (0)20 7186 9030
Philip Dennis / Mark Antelme
Tel: +44 (0)20 8434 2643
Notes to editors
Block Energy plc is an AIM-listed independent oil and gas company focused on production and development in Georgia, applying innovative technology to realise the full potential of previously discovered fields.
Block has a 100% working interest in Georgian onshore licence blocks IX and XIB. Licence block XIB is Georgia's most productive block, with 2P oil and gas reserves of 64 MMboe, comprising 2P oil reserves of 36 MMbbls and 2P gas reserves of 28 MMboe (Source: CPR Bayphase Limited: 1 July 2015) and historical production of over 180 MMbbls of oil from the Middle Eocene, peaking in the mid-1980s at 67,000 bopd.
The Company has a 100% working interest in the highly prospective West Rustavi onshore oil and gas field with multiple wells that have tested oil and gas from a range of geological horizons. The field has so far produced 50 Mbbls of light sweet crude and has 0.9 MMbbls of gross 2P oil reserves in the Middle Eocene. It also has 38 MMbbls of gross unrisked 2C contingent resources of oil and 608 Bcf of gross unrisked 2C contingent resources of gas in the Middle, Upper and Lower Eocene formations (Source: CPR Gustavson Associates: 1 January 2018).
Block also holds 100% and 90% working interests respectively in the onshore oil producing Norio and Satskhenisi fields.
The Company offers a clear entry point for investors to gain exposure to Georgia's growing economy and the strong regional demand for oil and gas.
1. bbls: barrels. A barrel is 35 imperial gallons.
2. Bcf: billion cubic feet.
3. boe: barrels of oil equivalent.
4. boepd: barrels of oil equivalent per day.
5. bopd: barrels of oil per day.
6. gross production: including the state of Georgia's share of production
7. LTI: lost-time incident.
8. Mbbls: thousand barrels.
9. Mboe: thousand barrels of oil equivalent.
10. MMbbls: million barrels.
11. MMboe: million barrels of oil equivalent.