Block Energy plc, the exploration and production company focused on Georgia, is pleased to announce the following operations update for the three months ended 31 March 2022.
Highlights
· Over 92,000 operational man-hours worked in Q1 2022, with no lost-time incidents
· Strong exit Q1 production rate of over 630 boepd
· Q1 production of 46.1 Mboe (Q4: 34.6 Mboe) or an average of 512 boepd
· Q1 revenue of $2,361,000 (Q4: $2,550,000)
· Long-lead items received and gathering pipeline being built for well WR-B01 sidetrack
Health and Safety
92,000 operational man-hours have been worked by staff and contractors in Q1 (Q4: 110,000 hours) with no lost-time incidents.
Operations
JKT-01Z commenced production in mid-January 2022. Analysis indicates the well is in good communication with the in-place volume of 8 MMbbls associated with long-term producing well KRT-39.
Gas production from J KT-01Z was quickly tied into the gas infrastructure at well KRT-39 to support rapid monetisation. Since mid-January 2022, oil and gas production from JKT-01Z has delivered substantial additional cashflows to the Company, supporting early payback and moving the Company into being cashflow positive.
Preparations for the drilling of the side-track of well WR-B01 continue to make good progress. Many of the long-lead items required to drill two sidetracks have been purchased and already arrived in Georgia. Furthermore, construction of the pipeline from the WR-B01 to WR-38 wellsites, to enable the immediate monetisation of any gas produced from the WR-B01 sidetrack, has commenced.
Oil and Gas Production
During Q1, gross production was 46.1 Mboe (Q4: 34.6 Mboe), comprising 32.1 Mbbls of oil (Q4: 24.9 Mbbls) and 14.0 Mboe of gas (Q4: 9.7 Mboe). The average gross production rate for Q1 was 512 boepd (Q4: 376 boepd).
Production in Q1 was impacted due to well WR-38Z being off-line. WR-38Z was brought back into production at the end of March, replenishing lost production providing a strong Q1 exit rate for daily production of over 630 boepd.
Oil Sales
In Q1, Block sold 24.4 Mbbls of oil (Q4: 33.6 Mbbls) for $2,168,000 (Q4: $2,441,000), resulting in a weighted average price of approximately $89 per barrel (Q4: $73 per barrel), representing a 22% increase in the realised price in Q1 compared with Q4.
Gas Sales
In Q1, the Company sold 48.4 MMcf of gas (Q4: 36.1 MMcf) for $193,000 (Q4: $109,000), resulting in a weighted average price of approximately $4.00/Mcf (Q4: $3.03/Mcf).
Cash Position
As at 31 March 2022, Block had $1.2 million cash at bank (31 December 2021: $1.2 million).
Block Energy plc's Chief Executive Officer, Paul Haywood, said:
"As the first quarter production results demonstrate, the Company is delivering operationally, which combined with improved commodity prices, creates a robust financial result. This gives us a stronger platform to deliver on the inherent value of Block's assets and monetise the wider reserves and resources within our portfolio. We believe we now have a better understanding of the subsurface, which we have translated into a practical plan to grow production and create value for shareholders. While we can do this with our existing resources, we are also looking into non-dilutive financing options to accelerate production growth, and other ways to enhance value for shareholders."
