Block Energy Share Discussion Threads

[edgein] 02/4/2019 10:50

"The old wells will need remediation and integrity checks, then suspending before milling out in readiness for sidetrack preparation. The reservoir is shallow and onshore. There would be lower risk in drilling a new well."

Yes its the cheaper option, FRR has used the previous wellstock in Georgia and as did LGO and CERP in T&T et al. Its much cheaper to use historic wells that are in suitable condition than to drill another vertical well from scratch, I thought you would have know that. Day rates for these land rigs, pipe and even the drill mud isn't cheap. That's all avoided by using existing wellstock. Also many sidetracks can be drilled with just a workover rig, not the case in this example though. The old wells are preped like 38 has been therefore its been cleaned up prior to and ready to sidetrack. Why would they spend millions twinning 38 when its in suitable condition?

Moreover they don't have the geological risk associated with drilling the new vertical wells in the first place. Using a good condition refurbished well has no drilling risk rather than low drilling risk as its already been drilled. Only if the well integrity is poor would they need to redrill from scratch.

"The reason the wells were sidetracked was to comply with the work program that they signed up for, not that it necessarily the cheaper option."

Its always a cheaper and less risky option to use historic well re-entry than to drill new wells, that's why every small-mid company that has that option takes that option. Many of the small cap companies are set up with the strategy of low cost workovers for example for that very same reason. If it were cheaper to drill new modern completed wells they would do so. But that's never the case if the wells are in good condition.

Moreover its not a cost saving exercise, nor just a licence requirement, its a requirement of these compartmentalised formations in Georgia. The only way to exploit these reservoirs properly is through directional drilling potentially hitting more than one compartment in the reservoir. How do I know this well I've been in and out of FRR over the years. I thought you may have know that already about the cost savings of well re-entry but I guess I was wrong on that.

Regards,
Ed.

[hazl] 02/4/2019 10:46

IT'S gradually gaining if you draw a line from the lows of the day to where we are now on the chart.

[johncasey] 02/4/2019 10:41

ukog and angus have been going on about sidetracks for what seems like years but never do...block energy get on with it and do it

[greatfull dead] 02/4/2019 10:35

Not quite cleared my decks earlier but more than enough space for BLOE now.

GLA,
GD

[newtothisgame3] 02/4/2019 10:29

Thanks @CityAM for this morning's coverage (readers please note typo in final para - should be 325 bbl/d rather than 35) #bloe @BlockEnergyplc

[toogood4me] 02/4/2019 10:28

It's what I keep thinking wish I could add and will do as soon as funds become available

[gregpeck7] 02/4/2019 10:27

II's waking up to this now IMO chaps... 7p + coming today?

This is quite simply far too cheap based on any metric you can look at to value this...

Buy

[toogood4me] 02/4/2019 10:22

It's a crime to hold this down like this

[gregpeck7] 02/4/2019 10:20

PS looks like the MM's are running out of shares!

[gregpeck7] 02/4/2019 10:20

From what I can see at the moment, Norio is pretty much providing enough output for the "company" to break even... And Norio is the sideshow... West Rustavi where they have 100% WI therefore is dropping straight onto the bottom line...

All of their projections are also based on 60 USD oil? Correct? so at 70 USD where we are now all these projections could be slashed by 15% for breakeven?

And nowhere is gas factored in, its all based on oil (currently)

GP

[toogood4me] 02/4/2019 10:16

Rns from jan 2019-- Highly encouraging progress towards target of 25-fold increase in production at Norio field to 250 bopd by end of H1 2019-- 250 bopd target at Norio is in addition to the 650 bopd being targeted at Block's West Rustavi field by end of Q1 2019 via an initial two well sidetrack drilling programme-- At 900 bopd Block's estimated annual revenues of GBP13million (based on current oil prices) will provide a highly cash generative platform to build a leading independentAnd from 1 well 1100 boom

[gregpeck7] 02/4/2019 10:08

Have a read through the previous news releases.. I am still going over all the details to try and understand it all and why they have achieved such a stunning flow rate - which has also shocked the company clearly. The level of natural fracturing must be significant... Could the upper level be connected to the lower level in which case producing at the medium interval would be optimal? Hopefully they will have some answers...

[greatfull dead] 02/4/2019 10:03

This is an education. Keep it up.

ATB,
GD

[gregpeck7] 02/4/2019 10:01

There is strong potential here for over 1000 bopd sustained production from just 2 wells, that is 10 times their breakeven.. I

If the costs are more or less it is not really of huge concern given the success of this first well..

Also I think a lot are missing, this was just from the mid section - not the upper where there were also strong O+G shows

AND

no gas either.

So the potential here is really eye watering... Its one thing to hit the oil, as PANR know, its another to flow it.....

This looks one of the most exciting plays to pop up in a long time.

[spangle93] 02/4/2019 09:55

"its much cheaper to drill these sidetracks than new wells."

Do you know that? The old wells will need remediation and integrity checks, then suspending before milling out in readiness for sidetrack preparation. The reservoir is shallow and onshore. There would be lower risk in drilling a new well.

The reason the wells were sidetracked was to comply with the work program that they signed up for, not that it necessarily the cheaper option.

[edgein] 02/4/2019 09:43

GP,

Yes indeed, they are currently getting 38 ready for re-entry depending on the results of 16a which are clearly above expectations. I agree, this isn't the typical oil company that drills then appraises then some years later gets the production on line. What the market is totally missing is the fact this well can be immediately produced into the storage tanks on site. Its then repeatable and can be scaled up from the historic soviet wells on the discoveries, its much cheaper to drill these sidetracks than new wells. So this could be done quickly and at low cost. That's where it gets interesting as its like a low cost alternative to the shale producers that need long horizontals and fracced wells. So far BLOE doesn't. The significance of the natural fractured reservoir is no need for frac or re-frac of wells, reservoir quality plays a big part in recoverable volumes. So even if the natural decline rate is in excess of 25% per year they can still keep banging out these low cost development wells and increase overall production volumes.

The company has identified multiple well candidates from the high quality 2D seismic for potentially untapped compartments. Horizontal completions may be able to access more than one of these per well that the old vertical wells couldn't. Not saying every future well would be as good as 16a, but it sets them up very well for future operations given the start of this campaign. It'll be interesting to see the production rates of these wells at the end of 2019. By the time that the sidetrack of 38 is complete and ready to test we could have 6-8 weeks of production from 16a. Exciting times in the near to mid term, looking forward to the RNS on the pressure build up test and reservoir performance.

Regards,
Ed.

[newtothisgame3] 02/4/2019 09:31

'London-listed player reports stronger than expected results from its recently-drilled well'

[babbler] 02/4/2019 09:26

NI is best ignored imo. Always says stuff like that once he has sold and wants back in. imo.

[gregpeck7] 02/4/2019 09:19

Ed agree, and I think there will be some sort of update around the general strategy to develop the field in light of these improved results.. As I said yesterday, this is a new company, some will sell out with an overnight 50% profit but most will stay with this story now for the long haul. Over 20% of the company changed hands yesterday which is crazy... Once the profit taking ends, which should be very shortly IMO, I see a steady sustained rise towards a realistic valuation which is much greater than 15m. The asset is clearly significantly better than the company expected and it is the flagship asset so should have the greatest multiplier on the overall valuation.

As per half year results, break even is 100 bopd. That is now in the rear view mirror. Crazy to think that but that is the case.....

GP

[edgein] 02/4/2019 09:06

Greg,

Yes I'd expect the next RNS after they complete the 72 hr test:

"The well is now shut in for a 72 hour period. On recovery of the downhole gauges pressure transient analysis will be performed and reported by RNS."

So Thursday/Friday update possible or maybe next week, but there's lots more news to come from this hole and the forward plan. Also the near-term transformation of production volumes and cash flow. As I said yesterday I'd expect this one to come online around 500bopd, an almost immediate x10 increase in cash flow. Then straight onto well 38 operations.

Regards,
Ed.

[hazl] 02/4/2019 08:58

Sure to be a few changing hands initially. 8-)

[gregpeck7] 02/4/2019 08:55

And panr 95m mkt cap..

[toogood4me] 02/4/2019 08:47

I see panr rns todayKey Points: Pantheon has announced the full results of its Alkaid well flow test programme onshore Alaska. This was already reported as successful at the primary target Brookian ZOI level, which flowed at 80-100 bpdWe hit 1100 bopd yesterday This is so cheap

[muddyfox0151] 02/4/2019 08:43

I smell gas:)