Block Energy Share Discussion Threads

[georgie pie] 30/1/2019 13:45

Good to see another solid day here, looks like trades are starting to pick up and rightly so, current share price very cheap indeed.

[bad gateway] 29/1/2019 13:46

12:54 29 Jan 2019
Paul Haywood, director of Block Energy PLC (LON:BLOE), updates Proactive London's Andrew Scott on the sidetrack operations at the West Rustavi field, in the existing 16a wellbore.

It's the first of an initial two well programme there as Block aims to increase production up to 650 barrels of oil per day by the end of the first half.

The drilling follows a successful oil test in December which confirmed it is in an active hydrocarbon system, and, the previously producing reservoir retains reserves and is still pressurised.

Haywood describes the sidetrack as a “high impact well” for the company.

[georgie pie] 24/1/2019 13:15

From Big Bench on LSE

Nice Snippet to end on...






Q7. Having raised £5m at the IPO in June at 4p, what do you make of the market sentiment relating to Block Energy and do you feel the current share price of around 3p is a fair reflection of where the company is at?

We believe we are significantly undervalued relative to our peers. This is primarily for two reasons: the value for oil companies through 2018 has been soft for many reasons, and the market’s perception of Georgia has been distorted due to the poor corporate governance and performance of some companies in the past.

Confidence in Block is now starting to rise, indicated by the increase in our trading activity and the number of investor meetings being requested.

What can Block Energy shareholders look forward to over the next 12 months?
Lots of activity in the field. We expect good results to bolster confidence that will unlock value for our shareholders.

[burtond1] 23/1/2019 12:03

https://twitter.com/tmsreach/status/1088028884342312961?s=21TMS welcomes guest blogger and financial commentator @EliasJones01 to the platform where he shares great insight from his latest interview with @BlockEnergyplc #BLOE an AIM listed exploration and production company focused on the Republic of Georgia...

[bad gateway] 23/1/2019 07:39

Good to see thew sidetrack starting. Could get quite interesting if this one comes in imo.

[spangle93] 19/1/2019 13:16

Croasdalelfc - you are correct, I believe. It wasn't clear to me from the original documentation whether completing the 2 sidetracks was the minimum criterion for opening negotiations, or the only criterion, regardless of result. But I think from subsequent reading, the situation is how you describe it.

Anyway, after posting I won an argument against myself, so I've taken an initial stake. Since then the price fell, of course, so I apologise - I'm usually the kiss of death.

It's not cos of Haywood, it's largely because
1. the company is starting to build a track record of delivery,
2. many of the potentially risky re-entry type operations are now past (and they have shown benefit from the shiny new tool, which has a pretty chequered history of efficiency) and
3. henceforth, in the next couple of months, there should be fewer preparation activities and instead, genuine value-adding work being completed.

In other words, I believe the risk-benefit has now tilted in favour of taking a chance.

GLA

[lastoneout] 18/1/2019 13:34

Thanks to indebt1 on lsehttp://www.valuethemarkets.com/index.php/2019/01/18/block-energys-ceo-paul-haywood-firms-positive-progress-heads-towards-900bopd-production-bloe

[croasdalelfc] 18/1/2019 13:09

Actually the figures are correct 75% of 650 plus 100% of 250 x 365 x 50 is $13.5m . The earn in is after 2 sidetracks and the sidetracks are targetting 650 bopd

[lastoneout] 15/1/2019 14:28

I believe BLOE will gain 75% of WR on completion of the 2 fully funded sidetracks targeted for end of Q1. Agree the gas could prove to be a major bonus

[spangle93] 15/1/2019 09:15

Good RNS. More progress being made. These non-standard technologies have a bit of a chequered track record (and also depend on the reservoir being as predicted) but all activities appear to remain on track, if slightly delayed.

I want to believe in the story, and I want to trust their MD, I truly do. But he just sounds like someone from whom I wouldn't buy a used car. Apart from making elementary errors when talking off the cuff, his positive spin (though not uncommon in AIM oil companies) is misleading.

For instance
"With our existing production at Norio selling for Brent minus US$10, a combined rate of production at Norio and West Rustavi of 900 bopd would have the potential to generate circa US$13 million in annual revenues at current oil prices, a level that far outstrips our current £7 million market valuation"

Well, 900 BOPD would generate ca. $13MM per annum (rate * price * days).
But it's not all theirs. In West Rustafi, they currently have 25% of production, so it would only be (250+225) 475BOPD net to BLOE at end 1Q. The $13MM calculation is based on 75% of West Rustafi, which is their ultimate target, which requires completion of a work programme and spending $1MM on workovers (as well as upgrades to facilities and successfully sidetracking the wells)

And not being picky, but $13MM is around £10MM, and the market cap is £8.7MM, so it's hardly "far-outstripping".

I think there's a nice little business case here, particularly with the gas, but I need to get past the bletherings of the MD

[sea7] 14/1/2019 15:13

Yep - 45bopd over a five hour period and only from one section. Lots more to come here.

[novicetrade68] 14/1/2019 14:22

I guess 8 x 45 would become 360 bopd so overachieving on the 250 bopd target.

[novicetrade68] 14/1/2019 14:20

A lot to take in with this RNS, maybe there's selling because of the small 45 bopd number. I imagine to see a lot more news here these coming weeks, this is also the first time I read about an oil column 600 ft thick, but perhaps was already highlighted in the admission doc.

[sea7] 14/1/2019 14:11

rns out..

Highlights

· 45 barrels of oil recovered during a five hour period at Norio well 44

· Follows first application of specialist perforation tool which is to be used on multiple wells, as part of fully funded workover programme

· 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 ~£13million (based on current oil prices) will provide a highly cash generative platform to build a leading independent

and ...

Horizontal sidertracks west rustavi,

The target reservoir is at a depth of approximately 6,900 feet and is believed to have had an original oil column up to 600 feet thick.

[novicetrade68] 11/1/2019 15:49

maybe wind of an update, nice to see it climbing.

[babbler] 04/1/2019 09:17

Great start ti the year so far. Update due soon...

[spangle93] 31/12/2018 08:49

Thanks burtond1

The last sentence in the link says it all
"Is it worth getting exposure now as a punt on the firm being able to deliver on its ambitious plans?"

IMHO, the risk-reward has swung toward the latter over the six months it's traded. The price has fallen: conversely, they've not done too bad at delivery of their workovers, especially since operational start.

If they can turn this into oil flows, and/or gas flows, this is undervalued on cash flow. Following on, they need to turn conditional gas resources into reserves for a real re-rate

[burtond1] 31/12/2018 07:51

https://total-market-solutions.com/2018/12/31/our-outlook-for-2019-part-2/

[spangle93] 20/12/2018 16:53

2Prsimo - good point, that concerns me too. Bit of a moaning Mourinho. The other concerns are mistakes when he's interviewed, and the frequent name-drop references to Schlumberger. Islington is pretty close to Hackney, but they differ substantially, as does the geology in these thrust belts.

My impression is that they've reported good progress on work to date (plus), though they are behind initial schedules (minus). The work to date hasn't added any value by itself though - it's just facilitated later sidetracks. No reserves have been added, production hasn't grown, the gas wells haven't yet been retested, so why should the market consider the company value to be higher.

The next stage involves re-entry, sidetracking, and perforation with technology that's untried in the region. That's a risk red flag. If it works, then the price should re-rate.

[babbler] 20/12/2018 08:21

Or maybe he's shocked the market hasn't seen the potential... They said fully funded so can't be pre raise ramp....Time will tell but does seem cheap imo.

[2prsimo] 20/12/2018 08:08

I always get a bit concerned when the ceo of a company ramps said company in news releases and says it's undervalued - that's twice now in the last two statements. Bit of a red flag.

[babbler] 20/12/2018 08:05

We believe our current GBP7 million market capitalisation significantly undervalues our assets, given the potential of our current operations at Norio and West Rustavi, the opportunities presented by four additional sidetrack targets, the gross 608 BCF gas resources at West Rustavi, the additional workover opportunities at Norio, and the 28 MMbbl of gross 2C contingent resources at Satskhenisi.

[lastoneout] 18/12/2018 12:06

That's right but she is stepping down and being replaced by the outsourcing company. Had another read through the RNS's over the weekend and this company looks absurdly undervalued. Assuming of course that the sidetracks and reworking of the old wells goes to plan but the chance of success seem quite high to me. An interesting couple of months ahead of us

[euclid5] 18/12/2018 11:04

don't they have a finance director that deals woth all that?