Block Energy plc expects to complete its gas sales pipeline this year and start sales from its projects in Georgia.
FINANCES
Block’s three current licences are West Rustavi (100% working interest), Norio (100%), and Satshenisi (90%).
In its interim results for six months ended 30 June 2020, the company reported revenue from oil sales of $313,000 (2019: $nil).
During August 2020, Block sold stored crude oil from its three licences for $568,000.
The company posted a net loss of $2,668,000 compared with H1 2019 of $2,725,000.
The net loss included an impairment of the capitalised costs in respect of the Satskhenisi licence amounting to $208,000 (2019: $nil), but it was still lower than the comparative six months ended 30 June 2019 owing to no revenue in the prior period and administrative cost savings.
Net operating cash outflow was $2,498,000 (H1 2019: $1,732,000) and the company held $2,258,000 cash.
OPERATIONS
During H1 Block Energy procured an early production facility (EPF), including a gas processing unit, which it commissioned at the site in September 2020.
The company began construction of the gathering line between the EPF and WR-38Z during September 2020.
Shut-in of the West Rustavi field’s production at wells WR-16aZ and WR-38Z to conserve valuable gas resources until the gas sales pipeline is completed.
SCHLUMBERGER SAP
Chief executive Paul Haywood said that the company’s agreement with Schlumberger to acquire its subsidiary Schlumberger Rustaveli Company Ltd (SRCL) had been delayed due to Covid-19, but both parties remained committed.
TECHNICAL STUDY
“With the EPF in place and connected to the first of two West Rustavi wells, we expect gas sales to commence in Q4.
“We have been progressing an extensive sub-surface technical study, which is revealing some exciting short and medium-term opportunities that will be presented to the market on completion of the [SRCL] acquisition.
“Block Energy remains strong and agile, with cash on the balance sheet and near-term realisation of its gas reserves.
“Through these gas sales, we will generate more cash from our production base.”