Source - LSE Regulatory
RNS Number : 0627O
Block Energy PLC
29 September 2023
 

29 September 2023

 

Block Energy Plc

("Block" or the "Company")

Interim Results for the Six Months Ended 30 June 2023

Block Energy plc, the development and production company focused on Georgia, is pleased to announce the interim results for Block Energy plc and its subsidiaries (the "Group") for the six months ended 30 June 2023.

Highlights:

·    283,176 operational man-hours worked (1H 2022: 184,000 man-hours) with one lost time incident (1H 2022: none).

·    Achieved record production rates in Q2 2023 of 664 boepd, significantly above corporate breakeven rate.

·    Safely drilled WR-B01Za establishing good production rates from the well, which commenced stable production on 25 March.

·    Spud well WR-34Z, with the well being completed to plan, on time and within budget in August 2023. The well was handed over to production with all hydrocarbons being monetised.

·    Completed Project III gas resource evaluation across XIB and XIF Lower Eocene and Upper Cretaceous reservoirs using newly re-interpreted seismic.

·    Signed MoU with the Ministry of Economy and Sustainable Development of Georgia, supporting the concept of long-term gas offtake of resources associated with Project III.

·    Completed farm-out of part of XIB to Georgian Oil and Gas limited and received initial seismic results confirming the prospectivity of the new Project IV area.

·    Undertook 11 workovers and wellbore interventions, including the installation of an Electrical Submersible Pump ("ESP") on well WR-38Z, which significantly reduced non-performing time on the well.

·    Secured $2.0 million in non-dilutive debt financing with support from existing shareholders and senior management.

·    Strong & consistent production performance during the period:

Total production of 96.4 Mboe, comprising 75.3 Mbbls of oil and 21.1 Mboe of gas (1H 2022: 93.3 Mboe, comprising of 64.9 Mbbls of oil and 28.4 Mboe of gas).

Average daily production of 533 boepd (1H 2022: 515 boepd).

Stable production from WR-B01Za was achieved on 25 March.

·    Oil sales of 51.4 Mbbls with revenue of $3.45 million, representing a weighted average price of $67 per barrel (1H 2022: Oil sales of 45.6 Mbbls with revenue of $4.16 million, representing a weighted average price of $91 per barrel).

·    Gas sales of 88.0 MMcf with revenue of $0.48 million, representing a weighted average price of $5.4/Mcf (1H 2022: 106.8 MMcf with revenue of $0.43 million, representing a weighted average price of $4.02/Mcf). 

·    Oil in inventory net to the Company at the end of the period was 11.7 Mbbls.

·    Loss for the period from continuing operations of $432,000 (1H 2022: profit of $627,000).

·    Cash position of $882,000 as at 30 June 2023 (31 December 2022: $450,000).

Post period events:

There were no post period events.

Block Energy plc's Chief Executive Officer, Paul Haywood, said:

"I would like to start by thanking the Block Energy team for their continued efforts across many fronts whilst delivering on the plan safely and efficiently.

"Performance throughout the period has delivered strong production and positive cashflows and even though H1 2023 suffered from lower-than-average oil prices, as of today, the Company remains on track to deliver its best full-year financial results in history. This is a testament to the team's enhanced operational performance and rigorous capital discipline, supported by strong H2 2023 Brent pricing. With WR-34Z now handed over to production, the remainder of this year promises to be an exciting time for the Company as we seek to further increase production with the drilling of KRT-45Z and advance the high-impact Project III multi-Tcf gas opportunity. I look forward to providing further updates, in due course."

Stephen James BSc, MBA, PhD (Block's Subsurface Manager) has reviewed the reserve, resource and production information contained in this announcement. Dr James is a geoscientist with over 40 years' experience in field development and reservoir management.

**ENDS**

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED.  ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

For further information please visit http://www.blockenergy.co.uk/ or contact:

Paul Haywood

(Chief Executive Officer)

Block Energy plc

Tel: +44 (0)20 3468 9891

Neil Baldwin

(Nominated Adviser)

Spark Advisory Partners Limited

Tel: +44 (0)20 3368 3554

Peter Krens

(Corporate Broker)

Tennyson Securities

Tel: +44 (0)20 7186 9030

Philip Dennis / Mark Antelme / Ali AlQahtani

(Financial PR)

Celicourt Communications

Tel: +44 (0)20 7770 6424

 

Notes to editors

Block Energy plc is an AIM-quoted independent oil and gas company focused on production and development in Georgia, applying innovative technology to realise the full potential of previously discovered fields.

Block has a 100% working interest in Georgian onshore licence blocks IX and XIB. Licence block XIB is Georgia's most productive block. During the mid-1980s, production peaked at 67,000 bopd and cumulative production reached 100 MMbbls and 80 MMbbls of oil from the Patardzeuli and Samgori fields, respectively. The remaining 2P reserves across block XIB are 64 MMboe, comprising 2P oil reserves of 36 MMbbls and 2P gas reserves of 28 MMboe. (Source: CPR Bayphase Limited: 1 July 2015). Additionally, following an internal technical study designed to evaluate and quantify the undrained oil potential of the Middle Eocene within the Patardzeuli field, the Company has estimated gross unrisked 2C contingent resources of 200 MMbbls of oil.

The Company has a 100% working interest in the West Rustavi onshore oil and gas field in licence blocks XIB & XIF. Multiple wells have tested oil and gas from a range of geological horizons. The field has so far produced over 75 Mbbls of light sweet crude and has 0.9 MMbbls of gross 2P oil reserves in the Middle Eocene. It also has 38 MMbbls of gross unrisked 2C contingent resources of oil and 608 Bcf of gross unrisked 2C contingent resources of gas in the Middle, Upper and Lower Eocene formations (Source: CPR Gustavson Associates: 1 January 2018).

Block also holds 100% and 90% working interests respectively in the onshore oil producing Norio and Satskhenisi fields.

The Company offers a clear entry point for investors to gain exposure to Georgia's growing economy and the strong regional demand for oil and gas.

Glossary

·    bbls: barrels. A barrel is 35 imperial gallons.

·    Bcf: billion cubic feet.

·    boe: barrels of oil equivalent.

·    boepd: barrels of oil equivalent per day.

·    bopd: barrels of oil per day.

·    Mbbls: thousand barrels.

·    Mboe: thousand barrels of oil equivalent.

·    MMbbls: million barrels.

·    MMboe: million barrels of oil equivalent.

·    MMcf: million cubic feet.

 





 

Condensed Consolidated Interim Statement of Comprehensive Income

For the six months period ended 30 June 2023


Notes

6 months ended

6 months ended

 

 

 30 June 2023

 30 June 2022

 

 

Unaudited

Unaudited

 

 

$'000

$'000

Continuing operations:

 



 

3,926

 4,589


 



 



Direct costs

(Decrease) / increase in inventory

 

(1,839)

(135)

(1,729)

519

Depreciation and depletion of oil and gas assets

6

(827)

(951)

 

(2,801)

(2,161)

 



 

1,125

 2,428


 

 

 

 

(1,059)

(1,375)

 

(402)

(652)

 

10

(34)

 

(1,451)

(2,061)

 



Operating (loss)/profit

 

(326)

367

 

 



Other income

 

4

240

Finance income

 

-

20

Finance expense

4

(110)

-

 

 



(Loss)/profit for the period before taxation

 

(432)

627

 

 



Taxation

 

-

-


 



(Loss)/profit for the period from continuing operations (attributable to the equity holders of the parent)

 

(432)

627

 

 



Items that may be reclassified subsequently to profit or loss:

 



Exchange differences on translation of foreign operations

 

 

17

 

286

 

 



Total comprehensive (loss)/profit for the period attributable to the equity holders of the parent

 

(415)

913

 

 



(Loss)/profit per share (basic)

5

(0.06)c

0.10c

(Loss)/profit per share (diluted)

5

(0.05)c

0.08c



 

Condensed Consolidated Statement of Financial Position

As at 30 June 2023

 

Notes

30 June

2023

31 December 2022

 

 

Unaudited

Audited

 

 

$'000

$'000

 

 

 

Intangible assets

 

50

-

Property, plant and equipment

6

25,151

24,815


 

25,201

24,815

 

 

 

 

 4,431

4,791

 

1,585

560

 

 882

450

 

6,898

5,801

Total assets

 

32,099

30,616


 



 

 

 

 



7

3,593

3,565

 

34,785

34,765

 

 4,825

4,525

 

 711 

 694

 

 (16,651)

(16,349)

 

  27,263

27,200


 


 

 

 

4

1,936

-

 



 

 

 

 

 1,177

1,693

 

1,723

1,723

 

2,900

3,416

 

4,836

3,416

 

 

 

 

32,099

30,616

 



 

Condensed Consolidated Interim Statement of Cash Flows

For the six months period ended 30 June 2023


Notes

6 months ended

6 months ended

 

 

 30 June 2023

 30 June 2022

 

 

Unaudited

Unaudited

 

 

$'000

$'000

 

 



 



 

 (432)

 627

 



 

-

(20)

4

110

-

6

827

 950

 

402

652

 

(21)

 34

Net cash flows from operating activities before changes in working capital

 

886

 2,243

(Increase)/decrease in trade and other receivables

 

 (1,009)

 161

Decrease in trade and other payables

 

 (516)

 (767)

Decrease/(increase) in inventory

 

360 

 (675)

Net cashflows (used in)/from operating activities

 

 (279)

962

 

 


 

 


 

(50)

-

 

 (1,173)

(1,076)

Cash used in investing activities

 

 (1,223)

(1,076)

 

 


 

 


4

  (86)

 -

4

2,000

 -

Net cash flows from financing activities

 

 1,914

 -

 

 

 


Net increase/(decrease) in cash and cash equivalents

 

 412

 (114)

 

 450

 1,244

Effects of foreign exchange rate changes on cash and cash equivalents

 

20

 280

Cash and cash equivalents at end of period

 

 882

 1,410



 

Consolidated Statement of Changes in Equity

As at 30 June 2023


Share
capital

Share premium

Accumulated deficit

Other reserve

Foreign exchange reserve

Total equity

 

$'000

$'000

$'000

$'000

$'000

$'000

Balance at 30 June 2022 (unaudited)

 3,501

 34,650

 (20,774)

 10,752

 532

 28,661

Loss for the period

-

-

 (2,235)

-

-

(2,235)

Exchange differences on translation of operations in foreign currency

 

-

-

-

 162

 162

Total comprehensive loss for the period

-

-

(2,235)

-

 162

(2,073)

Shares issued

21

 115

-

-

-

136

Share based payments

-

-

-

 420

-

 420

Options exercised

 43

-

  -  

13

-

            56

Options relinquished

-

-

6,389

(6,389)

-

-

Options expired

-

-

 271

 (271)  

-

           -

Total transactions with owners

 64

 115

6,660

 (6,227)

-

 612

Balance at 31 December 2022 (audited)

 3,565

 34,765

 (16,349)

 4,525

 694

 27,200

Profit for the period

-

-

 (432)

-

-

 (432)

Exchange differences on translation of operations in foreign currency

 -

-

-

-

17

17

Total comprehensive profit for the period

-

-

 (432)

-

17 

(415)

Shares issued

 21

 20

-

-

-

 41

Share based payments

 

-

 

-

 

-

 

 402

 

-

 

 402

Warrants issued

-

-

-

35

-

35

Options exercised

7

-

99

 (106)

-

-

Warrants expired

-

-

  31

 (31)

-

-

Total transactions with owners

 

28

 

20

 

130

 

 300

 

-

 

478

Balance at 30 June 2023 (unaudited)

 

 3,593

 

 34,785

 

 (16,651)

 

 4,825

 

 711

 

 27,263

 



 

Notes to the Condensed Consolidated Interim Financial Statements

For the six months period ended 30 June 2023

1.    General information

2.    Basis of preparation

3.    Operating segments

4.    Borrowings/ Finance expense

The fair value of non-current borrowings are not materially different from their carrying amounts, since the interest payable on those borrowings is either close to current market rate or the borrowings are of a short-term nature (18 months).  The transaction costs were recorded as $53,000 as the cost of arranging part of the facility and $35,000 was calculated as the Warrant Value in reference to the warrants issued to the lenders.

6 months ended

30 June 2023

6 months ended

30 June 2022

$'000

$'000



86

-

24

-

110

-

 

5.    Earnings per share

The calculation of earnings per share for the six months ended 30 June 2023 is based on the loss for the period attributable to ordinary shareholders of $432,000 and the weighted average number of shares of 687,068,781 and is (0.06) cents from continued operations.

The calculation of loss per share for the six months ended 30 June 2022 is based on the profit for the period attributable to ordinary shareholders of $627,000 and the weighted average number of shares of 656,329,007 and is 0.10 cents from continued operations.

The calculation of fully diluted earnings per share for the six months ended 30 June 2023 is based on the loss for the period attributable to ordinary shareholders of $432,000 and the weighted average number of shares of 687,068,781 plus warrants outstanding of 54,241,837 and options outstanding of 114,198,627 at period end and is (0.05) cents from continued operations. 

6.    Property, plant and equipment

Unaudited

Development &

Production Assets

PPE/Computer/

Office equipment/ Vehicles

Total

Cost

$'000

$'000

$'000

At 1 January 2023

 29,115

 2,072

 31,187

Additions

1,111

 62

 1,173

Disposals

-

(35)

(35)

Foreign exchange movements

 2

 11

 13

At 30 June 2023

 30,228

 2,110

 32,338





Accumulated depreciation and impairment




At 1 January 2023

 5,711

 661

 6,372

Charge

 682

 145

 827

Disposals

-

(14)

(14)

Foreign exchange movements

 (1)

 3

  2

At 30 June 2023

  6,392

795

 7,187





Carrying amount




At 30 June 2023

 23,836

 1,315

 25,151

At 31 December 2022

23,404

1,411

24,815

Unaudited

Development &

Production Assets

PPE/Computer/

Office equipment/ Vehicles

Total

Cost

$'000

$'000

$'000

At 1 January 2022

 26,962

 1,802

 28,764

Additions

 998

78

1,076

Reduction of baseline oil asset /disposals

 (244)

(6)

 (250)

Foreign exchange movements

-

 8

 8

At 30 June 2022

 27,716

1,882

29,598

 




Accumulated depreciation and impairment




At 1 January 2022

 4,029

 390

 4,419

Charge

 820

 130

 950  

At 30 June 2022

 4,849  

 520  

 5,369

 




Carrying amount




At 30 June 2022

 22,867

 1,362

 24,229

No impairment was recognised in the six months ended 30 June 2023 (2022: Nil).

7.    Share capital

8.    Related party transactions

The Company's Chief Executive Officer, Paul Haywood has provided $105,000 of the Loan referred to above, and the former Board Director, Ken Seymour, has provided $125,000 of the Loan. $6,376 and $7,025 has been paid in interest to these respective related parties as at 30 June 2023.

 

Mr Haywood and Dr Seymour are each treated as a related party of the Company pursuant to the AIM Rules. Consequently, the participation of Mr Haywood and Mr Seymour in the provision of the Loan Facility constitutes a related party transaction for the purposes of AIM Rule 13.

 

9.    Other matters

A copy of this report is available from the Group's website, www.blockenergy.co.uk

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