Block Energy completes placing to raise £12 million
AIM-listed Block Energy, the exploration and production company focused on the Republic of Georgia, has completed a placing of 109,090,000 new Ordinary Shares, raising approximately £12 million (before expenses) with institutional investors at a Placing Price of 11 pence per share.
Mirabaud Securities acted as sole bookrunner and broker in connection with the Placing.
Mirabaud has been appointed as joint broker to the Company with immediate effect.
The Placing Price represents a discount of approximately 15.7 per cent. to the closing market price, of 13.05 pence per Existing Ordinary Share on 15 May 2019, the last business day before the announcement of the Placing.
Chief Executive Officer Paul Haywood commented: “We are delighted to have secured support for an ambitious work programme to develop our West Rustavi licence, the potential of which was confirmed by last month’s excellent oil production test rates at well 16aZ of approximately 1,100bbl/d, more than three times higher than forecast.
“We used the £5 million we raised for our IPO last June to demonstrate our capacity to undertake disciplined low cost operations and prove the value of our assets. With this fresh injection of £12 million we keenly anticipate pursuing our programme to unlock West Rustavi’s company-making potential: proven reserves of 0.9MMbbls, contingent resources of 38 MMbbls and 608 BCF and excellent netbacks of US$36/bbl at US$65/bbl Brent and US$3.40/MCF for gas.
“We have designed a rigorous programme promising rapid paybacks. The upgrade of production facilities will provide capacity for production from three new side-tracked wells. In the fourth quarter this year we will side-track West Rustavi well 38, a neighbour and analogue to 16aZ. Two further wells, West Rustavi 30 and 3 will be side-tracked through the first half of next year, and their associated gas discoveries tested.
“We will acquire a 3D seismic survey this year which will allow us to identify optimal locations for new gas wells and horizontal oil wells to be explored next year. We will also continue our ongoing workover programme at Norio, and have scheduled the field’s well 60 for side-tracking later this year.
“The funds raised also give us the freedom to explore fresh opportunities: we are a young, ambitious company keen to apply the low cost, innovative drilling technologies we have deployed in Georgia to new ventures in the region and beyond. Today marks a major step forward for Block as we move towards our objective of becoming one of AIM’s newest mid-tier oil and gas producers.”