Block Energy Delivers Positive Update
(BLOE ) has announced significant operational progress at the Company's Early Production Facility ("EPF") with first gas now on schedule for 4Q20, the acquisition of Schlumberger Rustaveli Company Limited ("SRCL") continues towards completion and Mr Roger McMechan intends to step down from the Board.
West Rustavi
As announced on 7 April 2020, Block suspended production from its two West Rustavi wells in response to the low oil price, COVID 19 restrictions and to conserve valuable gas reserves.
This morning, in the Company’s comprehensive Operational and Corporate update, the Company confirmed the Group's EPF, a key component in enabling the Company to process and sell gas from its West Rustavi field, arrived on site from Canada in June and despite COVID-19 restrictions affecting both international and domestic travel, the EPF has been installed on the WR-16aZ well site.
The WR-16aZ well has now been connected to the EPF's inlet manifold and the EPF has been commissioned with continuous production of dry gas for over 25 hours.
Once the WR-38Z well has been tied into the facility, the EPF will then be ready to process oil and gas from the two West Rustavi wells. The EPF is currently rated to handle up to 3 MMCF/d, but can be expanded and it has inlets for four additional wells.
Construction of the gathering line between the EPF and WR-38Z commenced on 11 September 2020 and is due to be completed by the end of October 2020 with the steel flowline being buried for its full length of 3.5 km.
Bago is completing the final stages of the permitting process to enable it to construct its gas sales pipeline. Bago expects to have the pipeline completed in 4Q20, enabling gas sales to commence before the end of this year.
Meanwhile, the Company continues to produce oil from its Norio and Satskhenisi licences and sold crude oil from its West Rustavi, Norio and Satskhenisi licences during August 2020 for net proceeds of approximately US$570,000.
Work on the Acquisition of SRCL yields positive early indications
Block continues to work with Schlumberger on completion of the acquisition of SRCL, which was announced on 26 March 2020.
Whilst some conditions necessary for completion have been fulfilled, an agreed shadowing period has not yet been possible due to COVID-19 travel restrictions.
In the meantime, subsurface technical study work on the SRCL assets continues, yielding economically attractive short and medium-term opportunities.
Directorate Change
Mr Roger McMechan has expressed his intention to stand down from the Board on 30 September 2020. The Company is pleased to announce that Roger will continue to make his extensive expertise available to the Company as a consultant.
Shares in BLOE have traded strongly over the past there months from 2.1p in July to open at 2.8p following this update.
Block Energy plc Chairman, Philip Dimmock, said: “After the period of restricted operational activity caused by the COVID-19 pandemic, I am delighted we can announce the progress we have made towards being able to turn the West Rustavi wells back on and commence gas sales. I thank Roger for his contribution to the Board and am delighted that he continues to make his expertise available to the Company."
Block Energy plc Chief Executive Officer, Paul Haywood, said: “I am extremely pleased with the progress we are making with our EPF at West Rustavi, despite the challenges of COVID-19 and low oil prices. We remain focused on completing the remaining work in order to commence gas sales towards the end of Q4. Gas sales will not only provide an additional revenue stream to Block but will also diversify the Group's resources and provide a clear path to commercialisation of future gas developments and discoveries. Our acquisition of Schlumberger's Georgian upstream business is also progressing well, opening up a raft of mature opportunities for Block."
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