Block Energy sits tight and waits for coronavirus storm to pass

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Block Energy sits tight and waits for coronavirus storm to pass

What it owns

West Rustavi

Block owns 100% with the field holding an estimated 38 MMbbls (million barrels) of gross contingent resources (‘2C’) of oil which the company hopes to mature to 2P reserves.

In addition, there are legacy gas discoveries supporting a gross contingent (‘2C’) resource of 608 BCF (Source: CPR).

Schlumberger

Block recently acquired new acreage in Georgia, picking up two areas held by Schlumberger for no upfront cash consideration.

Schlumberger will instead be given options over Block Energy stock – 120mln shares, or 23.3% of the company, ascribing a base deal value of around US$6mln.

The firm is acquiring Block XI which is described as “Georgia’s most productive block” – over 180mln barrels of oil have been produced historically, with a peak of 67,000 barrels of oil per day (bopd) in the mid-1980s – and, it adds 64mln barrels (boe) of 2P oil reserves to the group.

Norio

Block is undertaking a programme of workovers and sidetracks at Norio, also in Georgia, to boost production to 250 barrels per day.

Satskhenisi

A potential 28mln barrels where exploration is in the process of getting underway.

How it’s doing

Block has gone into cash preservation mode following the coronavirus outbreak, but in June said it anticipates gas sales from West Rustavi to start during the second half of this year, once wells (WR-16aZ and WR-38) are tied into the EPF or early production facilities.

Consultant EPI Limited has been appointed to add value and technical discipline to Block’s oil and gas future development programmes. 

What the boss says: paul Hayward, chief executive 

“Our Georgian portfolio is an undervalued resource base. The newly-formed relationship with EPI will significantly augment our technical capability and enhance the group’s ability to define the optimum development programme for the soon-to-be-acquired XIB asset.”

Inflexion points

  • Resumption of production from West Rustavi legacy and sidetrack wells
  • More horizontal sidetracks scheduled for West Rustavi
  • Assessment of recently acquired Schlumberger assets

 

Proactiveinvestors.co.uk

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