Block Energy plc, the development and production company focused on Georgia, is pleased to announce its operations update for the three months ended 30 June 2023.

Highlights

• Average production of 664 boepd during the quarter (Q1: 400 boepd)
• US$2.0m loan secured to ensure drilling momentum is maintained
• Planned spud of the next Project I well, this month
• Dr Ken Seymour moves to Senior Advisor, with Guram Maisuradze progressing to Chief Operations Officer ("COO")
• Termination of the Salary Sacrifice Scheme

Health, Safety & Emissions

Over 80,300 operational man-hours were worked by staff and contractors in Q2, with no LTIs.

The Company continues to minimise emissions, in-line with its commitments, flaring only 71,604 m3 of gas over the period as a result of facility shutdowns and maintenance.

Operations

Following the back-to-back success of drilling under Project I, the second quarter of the year saw Block deliver record production with an average rate of 664 boepd.

The success of wells JKT-01Z and WR-B01Za demonstrates the strength and ability of the Company's operating team in Georgia and has boosted the Company's confidence in drilling productive wells into the Middle Eocene reservoir.  Consequently, the Company intends to advance its Project I, phase one strategy and drill two further side-tracks and a new well, potentially consisting of multi-lateral technology, targeting production rates some 2-3x those achieved in previous horizontal wells.

Corporate

The Company's financial position improved materially following the increase in production during the period, enabling the Board to terminate the Salary Sacrifice scheme from 1 April. The scheme was established in April 2020 to support the Company's financial position during the pandemic and collapse in crude oil price.

In April, Block entered a Memorandum of Understanding ("MoU") with the Ministry of Economy and Sustainable Development in Georgia. The MoU covers government support and initiatives to assist in the development of the Company's Project I, II, III, and IV plans through data sharing, cooperation, and the facilitation of meetings with national and regional large oil companies. 

The MoU also envisages the concept of a long-term gas offtake agreement, which is an important element of delivering value from the 1 TCF of contingent resource identified by Block's subsurface team under Project III.

In order to maintain the drilling programme and avoid cash flow fluctuations associated with intermittent crude oil liftings, the Company secured a loan facility of US $2m, of which the entirety has been drawn down. These funds have enabled the Company to maintain momentum with drilling plans in pursuit of significantly enhancing total production by this year-end.

As part of the Company's career progression plan for its top performers, Guram Maisuradze is promoted to Chief Operating Officer, with Dr Ken Seymour transitioning to Senior Advisor, where he will focus on Block's medium and long-term projects. Guram has served the Company for five years, holding the role of Operations Manager, where, supported by the broader team in Georgia, he has been responsible for successfully planning and executing the drilling of new wells and for the overall management of production operations.

With effect from today, Block has also engaged Orana Corporate LLP to act as the Company's designated administrator and Company Secretary. The Company's registered office will also change to: Eccleston Yards, 25 Eccleston Place, London SW1W 9NF.

Oil and Gas Production

During Q2, gross production was 60.4 Mboe (Q1: 36.0 Mboe), comprising 48.5 Mbbls of oil (Q1: 26.8 Mbbls) and 11.9 Mboe of gas (Q1: 9.2 Mboe). The average gross production rate for Q2 was 664 boepd (Q1: 400 boepd).

Oil Sales

In Q2 2023, the Company sold 36.0 Mbbls of oil (Q1: 13.3 Mbbls) for US$2,568,000 (Q1: US$ 999,000).

As of 30 June 2023, the Company had c. 11.7 Mbbls of oil in storage.

Gas Sales

In Q2 2023, the Company sold 50.3 MMcf of gas (Q1: 37.7 MMcf) for US$ 266,000 (Q1: US$ 194,000).

Block Energy plc's Senior Advisor, Dr Ken Seymour, said:   
"It is a pleasure to welcome Guram to his new COO role. It has been a joy working with him and achieving our 2023 objectives. Guram's leadership, knowledge and innovation have been critical success factors in reaching and sustaining record production. His knowledge of Georgian production operations is unsurpassed, and his promotion is well and truly deserved. I look forward to working with the Company's Executives by providing operational well assurance on our Project I, Middle Eocene Oil Development and developing longer-term strategic objectives."

Block Energy plc's Chief Executive Officer, Paul Haywood, said:
"The second quarter of the year is characterised by a significant increase in production. This saw the Company's financial position improve materially, providing the Company with additional investment funds to drive further value from its assets. Our next Project I well will spud later this month."

"I am delighted to welcome Guram to Block's leadership team. His knowledge of our operations and his experience within Georgia will prove invaluable as we progress our plans. I am also looking forward to continuing to work closely with Ken as he moves into his new role as Senior Advisor."

KeyFacts Energy: Block Energy Georgia country profile