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Block Energy expects gas sales to begin in fourth quarter

Gas purchaser Bago is completing the final stages of the permitting process to enable it to construct its gas sales pipeline

Block Energy PLC - Block Energy expects gas sales to begin in fourth quarter

Block Energy PLC (LON:BLOE) said it expects gas sales to commence in the fourth quarter from West Rustavi despite the coronavirus pandemic proving “very hard to predict”.

The firm said gas purchaser Bago is completing the final stages of the permitting process to enable it to construct its gas sales pipeline, which they expect to have completed later this year.

READ: Block Energy counts down to first gas sales from West Rustavi

The Georgia-focused exploration and production company said it has been implementing cost-cutting and cash conservation measures in response to COVID-19.

Proceeds from sales of crude oil from its West Rustavi, Norio and Satskhenisi licences were US$313,000 during the first half of the year and US$568,000 following the period end in August and September.

Over the course of September, an early production facility (EPF) was commissioned and the construction of the gathering line between the EPF and WR-38Z was commenced.

The firm said the shut-in of the West Rustavi field's production at wells WR-16aZ and WR-38Z was decided to conserve valuable gas resources until the gas sales pipeline is complete later this year.

Early results from fully migrated 3D seismic processing are providing insight into the full potential of the West Rustavi XIF licence area, it added.

In the six months to June 30, Block reported a net loss of US$2.6mln compared to US$2.7mln a year ago, with cash at period-end sitting at US$2.2mln.

The loss included an impairment of the capitalised costs in respect of the Satskhenisi licence amounting to US$208,000, 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 during the current period.

“The acquisition of SRCL has been slightly delayed due to COVID-19 restrictions, but both parties remain committed to its completion,” said chief executive Paul Haywood.

“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 acquisition.”

Shares rose 1% to 2.41p on Wednesday morning.

Quick facts: Block Energy PLC

Price: 3.6 GBX

AIM:BLOE
Market: AIM
Market Cap: £15.77 m
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