BLOE Block Energy Plc

TIDMBLOE

RNS Number : 2538W

Block Energy PLC

11 December 2023

11 December 2023

Block Energy plc

("Block" or the "Company")

Project IV Update

Block Energy plc, the development and production company focused on Georgia, is pleased to provide a Project IV update.

Highlights

   -      DeGoyler MacNaughton independent resource report covering Didi Lilo ("Project IV"). 

- 302.8 MMboe mean unrisked prospective resources identified in the Martkopi Terrace prospect with over 30% chance of geological success.

   -      Farm-out discussions with regional oil companies continue to progress well. 

Project IV Background

As announced in March 2023, the Company completed a farm-out agreement for part of licence XIB to privately-owned Georgia Oil and Gas Limited ("GOGL").

As part of the consideration for the transaction, GOGL acquired and processed 210 km new 2D seismic and reprocessed 1,000 km of existing regional seismic data.

The portions of the licence that were farmed-out to GOGL (Didi Lilo and South Samgori) would have been subject to relinquishment obligations due in 2024 under the terms of the XIB Production Sharing Contract.

Project IV Independent Prospective Resource Report

As part of the work programme on Project IV, an independent prospective resource report was commissioned by the Operator, GOGL, on the Didi Lilo area as well as nearby GOGL acreage in order to facilitate current farm-in discussions with regional oil companies, which continue to progress. The report was authored by DeGolyer MacNaughton, a leading US based petroleum engineering firm, to Petroleum Resource Management System (PRMS) standards.

The gross prospective resources applicable to the Didi Lilo area (including portions of the prospect in nearby licences XIM & XIQ) are as follows:

 
 Prospect    Licence    1U (Low)    2U (Best)   3U (High)     Mean       Probability 
                         Estimate    Estimate    Estimate    Estimate    of Geological 
                                                                            Success 
                                                                              (%) 
 Martkopi      Didi 
  Terrace      Lilo, 
   Middle       XIM 
   Eocene      & XIQ             Gross Oil Resources (MMbbl)                31.4% 
            ---------  ----------------------------------------------  --------------- 
                          135.8       239.4       420.4       267.2 
 --------------------  ----------  ----------  ----------  ----------  --------------- 
                            Gross Associated Gas Resources (BCF) 
                       ---------------------------------------------- 
                          105.6       193.3       337.9       213.4 
                       ----------  ----------  ----------  ---------- 
                              Gross Oil & Gas Resources (MMboe) 
                       ---------------------------------------------- 
                          153.4       271.6       476.7       302.8 
                       ----------  ----------  ----------  ----------  --------------- 
                               Net Present Value, 10% (USD MM)           Probability 
                                                                          of Economic 
                                                                            Success 
                                                                              (%) 
                       ----------------------------------------------  --------------- 
                          99.5        223.4       501.8       272.7         28.4% 
 --------------------  ----------  ----------  ----------  ----------  --------------- 
 

Additional prospectivity was identified in GOGL's neighbouring acreage, licences XIK, XIM, XIN and XIQ, of which the state company, Georgia Oil and Gas Corporation ("GOGC"), acquired a 22% paying interest in 2021.

Commenting, Paul Haywood, Block Energy Chief Executive Officer said:

"We're pleased to report that DeGoyler MacNaughton have identified substantial prospectivity of over 300MMboe Gross Mean Unrisked Prospective Resources and project value in excess of US$270MM within the Martkopi Terrace prospect.

This independent subsurface validation, plus the significant commercial work, bolsters our confidence in the potential of Project IV and we look forward to updating shareholders on progress made to crystalise this significant opportunity in due course."

**S**

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 AMED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Stephen James BSc, MBA, PhD (Block's Subsurface Manager) has reviewed the reserve, resource and production information contained in this announcement. Dr James is a geoscientist with over 40 years of experience in field development and reservoir management.

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

 
 Paul Haywood           Block Energy plc            Tel: +44 (0)20 
  (Chief Executive                                   3468 9891 
  Officer) 
 Neil Baldwin           Spark Advisory Partners     Tel: +44 (0)20 
  (Nominated Adviser)    Limited                     3368 3554 
 Peter Krens            Tennyson Securities         Tel: +44 (0)20 
  (Corporate Broker)                                 7186 9030 
 P hilip Dennis         C elicourt Communications   Tel: +44 (0)20 
  / M ark Antelme                                    7770 6424 
  / Ali AlQahtani 
  (Financial PR) 
 

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. During the mid-1980s, production peaked at 67,000 bopd and cumulative production reached 100 MMbbls and 80 MMbbls of oil from the Patardzeuli and Samgori fields, respectively. The remaining 2P reserves across block XIB are 64 MMboe, comprising 2P oil reserves of 36 MMbbls and 2P gas reserves of 28 MMboe. (Source: CPR Bayphase Limited: 1 July 2015). Additionally, following an internal technical study designed to evaluate and quantify the undrained oil potential of the Middle Eocene within the Patardzeuli field, the Company has estimated gross unrisked 2C contingent resources of 200 MMbbls of oil.

The Company has a 100% working interest in licence block XIF containing the West Rustavi onshore oil and gas field. Multiple wells have tested oil and gas from a range of geological horizons. The field has so far produced over 75 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.

Glossary

   --    bbls: barrels. A barrel is 35 imperial gallons. 
   --    Bcf: billion cubic feet. 
   --    boe: barrels of oil equivalent. 
   --    boepd: barrels of oil equivalent per day. 
   --    bopd: barrels of oil per day. 
   --    Mbbls: thousand barrels. 
   --    Mboe: thousand barrels of oil equivalent. 
   --    Mcf: thousand cubic feet. 
   --    MD: measured depth. 
   --    MMbbls: million barrels. 
   --    MMboe: million barrels of oil equivalent. 
   --    MMcf: million cubic feet. 
   --    TVD: True Vertical Depth. 

Gross prospective resources: Estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled.

Project I: focused on the West Rustavi/Krtsanisi development and supported by an independent Competent Person's Report from ERCE. The Rustavi/Krtsanisi development sits across licence areas XIF & XI . An internal report assigns 27.5 MMbbl 3C Contingent Resources.

Project II : evaluation of large, undrained areas of the deeper zones of the Middle Eocene reservoir within the Patardzeuli field, within licence XI . Designed to evaluate and test 200 MMbbl 2C Contingent Resources.

Project III: aimed at the appraisal and monetization of substantial contingent resources of gas within the XI & XIF licenses, within the Lower Eocene, Paleocene and Upper Cretaceous geological formations. Internal estimates attribute 984 BCF 2C Contingent Resources.

Project IV: exploration of the extensive gas potential within the Company's wider portfolio, including licence area XIF and exploration license IX, in partnership with Georgia Oil & Gas limited.

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December 11, 2023 02:00 ET (07:00 GMT)