Block Energy Plc, the exploration and production company focused on the Republic of Georgia, is pleased to announce that at 08:00 today its ordinary shares commenced trading on AIM under the ticker BLOE.L (‘Admission’).
Mayan (AIM: MYN) Mayan now holds a 3.29% interest, Eddie Gonzalez, Mayan’s Managing Director, said, successful Admission to AIM and fundraise that has resulted in leading fund managers Miton Group and Amati joining its shareholder register. We look forward to closely following the team’s progress, as they embark on their low cost / low risk development programme.
As part of the Admission process, the Company has raised £5 million before expenses, through a placing and subscription of 125 million new ordinary shares at an issue price of 4p each, implying a market capitalisation of circa £10.3 million on Admission.
Spark Advisory Partners is acting as Nominated Adviser. Baden Hill LLP, a trading name of Northland Capital Partners Limited, and Novum Securities are Joint Brokers to the Company. Gneiss Energy Limited acted as corporate adviser to the Company.
· Oil and gas portfolio in Georgia with existing rapidly scalable production
o 100% Working Interest (‘WI’) in the producing Norio licence
o 90% WI in the producing Satskhenisi licence
o 5% interest and the right to earn a 75% WI in the West Rustavi permit
· All three licences hold reserves and have rapid development potential
· Competent Persons Report estimates gross unrisked Contingent Resources (‘2C’) of 72.9 million barrels of oil and gross unrisked 2C gas resources of 626 billion cubic feet (‘BCF’) gas across the three licences
· US$39.3 million NPV10 assigned to 2P net oil reserves with significant upside
· Defined three phase strategy focussed on rapidly scaling up production and de-risking 2C contingent resources via the application of new technologies and techniques:
o Phase 1: targeting 900 barrels of oil per day (‘bopd’) within 18 -24 months via a fully funded, low-cost / low-risk workover and sidetrack programme of existing wells – at a crude oil price of US$70/bbl, the Company breaks even at a production level of 110 bopd; and testing gas discoveries estimated to contain gross, unrisked contingent resources of 608 BCF (2C)/1 TCF (3C) that form part of the same play being targeted by Schlumberger on the neighbouring licence
o Phase 2: targeting over 2,000 bopd via the drilling of new horizontal wells and sidetracks from existing wells
o Phase 3: bring the West Rustavi gas discovery into production with an estimated capex of US$1.10/MCF and operating netback of ~US$3/MCF, as well as acquire additional licences in the wider region
· Excellent local relationships to execute strategy – major shareholder is an established operator, party to multiple Production Sharing Agreement (‘PSAs’) and a drilling service provider in Georgia
· Management and Board with significant oil and gas, regional and Georgian specific experience, supported by UK institutions, including Miton and Amati Global
Block’s licences lie in the heart of Schlumberger’s 100% owned strategic 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)
Block Energy, chaired by Gulf Keystone non-exec Philip Dimmock, says its potential resources in the Kura basin are worth $40 million (£29.9 million). It plans to produce 900 barrels of oil per day within 18 months.
Schlumberger, the blue-chip oil services company, owns neighbouring licences, which have already produced 200 million barrels of oil.
Block’s MD, Paul Haywood, said Schlumberger’s discovery ‘validates’ its own prospects.
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