Mayan Energy Limited Update on Investee Company Block Energy (7404S)

TIDMMYN

RNS Number : 7404S

Mayan Energy Limited

27 June 2018

Mayan Energy Ltd / Index: AIM / Epic: MYN/ ISIN: VGG6622A1057 / Sector: Oil and Gas

27 June 2018

Mayan Energy Ltd ('Mayan' or 'the Company')

Update on Investee Company Block Energy

Mayan Energy Ltd (AIM: MYN), the AIM listed oil and gas company, is pleased to note the following update from AIM listed Block Energy Plc ('Block Energy') (AIM: BLOE), the exploration and production company focused on the Republic of Georgia in which Mayan holds a 3.29% interest.

Full Text of Block Energy's Release

Block Energy Plc, the exploration and production company focused on the Republic of Georgia, is pleased to announce the acquisition of an additional 20% interest in the highly prospective 36.5 sq km West Rustavi licence ('West Rustavi' or 'the Licence') in Georgia, increasing its working interest ('WI') to 25%.

-- West Rustavi has proven reserves and gross, unrisked contingent resources ('2C') of 608 BCF gas and 37.9MMBbls of oil and is located in the proven and prolific Kura Basin in Georgia

-- Multiple gas discoveries have already been made in the Lower Eocence and Upper Cretaceous within the Licence, which lie on trend to the same play currently being targeted by Schlumberger on neighbouring licence, Block XIb

-- The estimated cost of gas development and production at West Rustavi is c.US$2.00/Mcf which equates to operating netbacks of c.US$2.6/Mcf (assuming a 75% working interest) - Georgia currently purchases its gas for c.US$5.5 /Mcf

-- With a netback of c.US$2.6/Mcf and conservative 50% recovery the Board believes this translates into a c.US$600m project value to the Company

-- Inspection of existing well heads at West Rustavi to commence this week, preparing for the gas re-test and side track programme

-- Drilling/re-entry of initial targets are anticipated for Q4 2018 which, if successful, will transfer a substantial amount of the Company's contingent oil and gas resources to reserves and significantly advance the gas development strategy on the Licence

-- Acquisition of the additional 20% WI has been satisfied for a cash consideration of US$500,000, and subsequent to US$1million in new ordinary shares in Block priced at 4p per share, issued at the Company's Admission to trading on AIM on the 11(th) June 2018. This forms part of agreement with Georgian Oil & Gas to farm-in to up to a 75% WI in the Licence

-- West Rustavi's development is being conducted contemporaneously with the development of the producing Norio (100% WI) and Satskhenisi licences (90% WI) which provide immediate production uplift on commencement of field operations in Q3

-- Existing oil production costs approximately US$25 per barrel and is sold at Brent minus US$10 per barrel - target of 900 barrels within 24 months

-- Civil and field work at Norio/Satskhenisi including rehabilitation of facilities and reactivation of wells at Satskhenisi to commence in mid-July following routine rig inspections starting next week

Paul Haywood, Director of Block Energy, said: "The value potential for West Rustavi is outstanding. With multiple discoveries and a 608 BCF 2C gross unrisked contingent gas resource and 37.9MMBbls of oil, the Licence is of huge importance to the Company going forward, in terms of development potential and value uplift. Increasing our interest in the Licence is a key strategic objective for Block ahead of embarking on a development programme in Q3 2018, which will unlock both value and production potential, as well as upgrade West Rustavi's resources to proven reserves. Importantly, with estimated operational and development costs of US$2.00/Mcf per barrel, these huge contingent gas resources (contingent on an approved field development programme) are highly profitable and valuable considering the current gas purchase price in Georgia of c.US$5.5 /Mcf.

"In tandem with this, our fully funded work programme, following our recent GBP5million raise, which is targeting a ramp-up in oil production to 900bopd, is also commencing in July. As with the gas at West Rustavi, oil production on our fields offers excellent netbacks, with the current cost of production of c.US$25 per barrel providing net backs of c. US$30-35 per barrel. Even if we operate at half our 900 bopd initial production target, our annual revenue potential would be approximately US$6 million, a level equivalent to a significant proportion of our existing enterprise value. With this in mind, we are looking forward to a highly active period across all three licences commencing immediately. I believe we have the foundation, work programme and news flow to support a significant rerating of our share price."

Grant of Share Options

(i) Management Incentive Option Plan

As previously disclosed in the Company's Admission Document and as part of the Company's commitment to cost saving, staff retention and incentivisation, and to encouraging alignment between all employees of the Company and its shareholders, the Company has granted executive directors of the Company (Paul Haywood, Roger McMechan, Serina Bierer and Niall Tomlinson) an aggregate of 18,098,332 share options, with an exercise price of 4p per share (reflecting the Company's IPO price on 11(th) June 2018) and with a 1 year vesting period for 33.33% of the options and 2 year vesting period for 66.66% of the options (as set out below).

(ii) Executive Director and Key Staff Incentive and Retention Options

In addition to the general employee share option grants described above and as previously disclosed in the Company's Admission Document, options over an aggregate 5,640,000 shares have been granted to key directors Paul Haywood and Roger McMechan who the board considers are key to the future growth of the Company. These are at an exercise price of 2.5p per share, and with a vesting period of 1 year from issue.

 
 1    Details of the person discharging managerial responsibilities/person 
       closely associated 
 a)   Name                               Paul Haywood 
     ---------------------------------  ------------------------------------ 
 2    Reason for the notification 
     ----------------------------------------------------------------------- 
 a)   Position/status                    PDMR 
     ---------------------------------  ------------------------------------ 
 b)   Initial notification/amendment     Initial notification 
     ---------------------------------  ------------------------------------ 
 3    Details of the issuer, emission allowance market participant, 
       auction platform, auctioneer or auction monitor 
     ----------------------------------------------------------------------- 
 a)   Name                               Block Energy plc 
     ---------------------------------  ------------------------------------ 
 b)   LEI                                213800E2J8QAIJ6KN415 
     ---------------------------------  ------------------------------------ 
 4    Details of the transaction(s): section to be repeated for 
       (i) each type of instrument; (ii) each type of transaction; 
       (iii) each date; and (iv) each place where transactions 
       have been conducted 
     ----------------------------------------------------------------------- 
 a)   Description of the financial 
       instrument                        Ordinary Shares of 0.25p each 
     ---------------------------------  ------------------------------------ 
 b)   Identification code                GB00BF3TBT48 
     ---------------------------------  ------------------------------------ 
 c)   Nature of the transactions         Grant of options 
     ---------------------------------  ------------------------------------ 
 d)   Price(s) and volume(s)             (1) Price: 4p; Volume: 7,756,428 
                                          shares 
     --------------------------------- 
                                         (2) Price: 2.5p; Volume: 4,440,000 
                                          shares 
     ---------------------------------  ------------------------------------ 
 e)   Aggregated Information             As per d) above 
                                        ------------------------------------ 
      - Aggregated volume 
                                        ------------------------------------ 
      - Price 
     ---------------------------------  ------------------------------------ 
 f)   Date of the transactions           27 June 2018 
     ---------------------------------  ------------------------------------ 
 g)   Place of the transactions          Off-market 
     ---------------------------------  ------------------------------------ 
 
 1    Details of the person discharging managerial responsibilities/person 
       closely associated 
 a)   Name                               Roger McMechan 
     ---------------------------------  ------------------------------------ 
 2    Reason for the notification 
     ----------------------------------------------------------------------- 
 a)   Position/status                    PDMR 
     ---------------------------------  ------------------------------------ 
 b)   Initial notification/amendment     Initial notification 
     ---------------------------------  ------------------------------------ 
 3    Details of the issuer, emission allowance market participant, 
       auction platform, auctioneer or auction monitor 
     ----------------------------------------------------------------------- 
 a)   Name                               Block Energy plc 
     ---------------------------------  ------------------------------------ 
 b)   LEI                                213800E2J8QAIJ6KN415 
     ---------------------------------  ------------------------------------ 
 4    Details of the transaction(s): section to be repeated for 
       (i) each type of instrument; (ii) each type of transaction; 
       (iii) each date; and (iv) each place where transactions 
       have been conducted 

     ----------------------------------------------------------------------- 
 a)   Description of the financial 
       instrument                        Ordinary Shares of 0.25p each 
     ---------------------------------  ------------------------------------ 
 b)   Identification code                GB00BF3TBT48 
     ---------------------------------  ------------------------------------ 
 c)   Nature of the transactions         Grant of options 
     ---------------------------------  ------------------------------------ 
 d)   Price(s) and volume(s)             (1) Price: 4p; Volume: 5,170,952 
                                          shares 
     --------------------------------- 
                                         (2) Price: 2.5p; Volume: 1,200,000 
                                          shares 
     ---------------------------------  ------------------------------------ 
 e)   Aggregated Information             As per d) above 
                                        ------------------------------------ 
      - Aggregated volume 
                                        ------------------------------------ 
      - Price 
     ---------------------------------  ------------------------------------ 
 f)   Date of the transactions           27 June 2018 
     ---------------------------------  ------------------------------------ 
 g)   Place of the transactions          Off-market 
     ---------------------------------  ------------------------------------ 
 
 1    Details of the person discharging managerial responsibilities/person 
       closely associated 
 a)   Name                               Serina Bierer 
     ---------------------------------  ------------------------------------ 
 2    Reason for the notification 
     ----------------------------------------------------------------------- 
 a)   Position/status                    PDMR 
     ---------------------------------  ------------------------------------ 
 b)   Initial notification/amendment     Initial notification 
     ---------------------------------  ------------------------------------ 
 3    Details of the issuer, emission allowance market participant, 
       auction platform, auctioneer or auction monitor 
     ----------------------------------------------------------------------- 
 a)   Name                               Block Energy plc 
     ---------------------------------  ------------------------------------ 
 b)   LEI                                213800E2J8QAIJ6KN415 
     ---------------------------------  ------------------------------------ 
 4    Details of the transaction(s): section to be repeated for 
       (i) each type of instrument; (ii) each type of transaction; 
       (iii) each date; and (iv) each place where transactions 
       have been conducted 
     ----------------------------------------------------------------------- 
 a)   Description of the financial 
       instrument                        Ordinary Shares of 0.25p each 
     ---------------------------------  ------------------------------------ 
 b)   Identification code                GB00BF3TBT48 
     ---------------------------------  ------------------------------------ 
 c)   Nature of the transactions         Grant of options 
     ---------------------------------  ------------------------------------ 
 
 d)   Price(s) and volume(s)             (1) Price: 4p; Volume: 2,585,476 
                                          shares 
     ---------------------------------  ------------------------------------ 
 e)   Aggregated Information             As per d) above 
                                        ------------------------------------ 
      - Aggregated volume 
                                        ------------------------------------ 
      - Price 
     ---------------------------------  ------------------------------------ 
 f)   Date of the transactions           27 June 2018 
     ---------------------------------  ------------------------------------ 
 g)   Place of the transactions          Off-market 
     ---------------------------------  ------------------------------------ 
 
 1    Details of the person discharging managerial responsibilities/person 
       closely associated 
 a)   Name                               Niall Tomlinson 
     ---------------------------------  ------------------------------------ 
 2    Reason for the notification 
     ----------------------------------------------------------------------- 
 a)   Position/status                    PDMR 
     ---------------------------------  ------------------------------------ 
 b)   Initial notification/amendment     Initial notification 
     ---------------------------------  ------------------------------------ 
 3    Details of the issuer, emission allowance market participant, 
       auction platform, auctioneer or auction monitor 
     ----------------------------------------------------------------------- 
 a)   Name                               Block Energy plc 
     ---------------------------------  ------------------------------------ 
 b)   LEI                                213800E2J8QAIJ6KN415 
     ---------------------------------  ------------------------------------ 
 4    Details of the transaction(s): section to be repeated for 
       (i) each type of instrument; (ii) each type of transaction; 
       (iii) each date; and (iv) each place where transactions 
       have been conducted 
     ----------------------------------------------------------------------- 
 a)   Description of the financial 
       instrument                        Ordinary Shares of 0.25p each 
     ---------------------------------  ------------------------------------ 
 b)   Identification code                GB00BF3TBT48 
     ---------------------------------  ------------------------------------ 
 c)   Nature of the transactions         Grant of options 
     ---------------------------------  ------------------------------------ 
 
 d)   Price(s) and volume(s)             (1) Price: 4p; Volume: 2,585,476 
                                          shares 
     ---------------------------------  ------------------------------------ 
 e)   Aggregated Information             As per d) above 
                                        ------------------------------------ 
      - Aggregated volume 
                                        ------------------------------------ 
      - Price 
     ---------------------------------  ------------------------------------ 
 f)   Date of the transactions           27 June 2018 
     ---------------------------------  ------------------------------------ 
 g)   Place of the transactions          Off-market 
     ---------------------------------  ------------------------------------ 
 

Grant of Warrants

The Company announces that pursuant to the issue of convertible loan notes by the Company on 18(th) December 2017, a further 125,000 warrants have also been issued in lieu of certain fees. The warrants are exercisable at a price of 4 pence per share and are exercisable at any time up to 11 December 2019.

**ENDS**

For further information visit www.Mayan energy.com or contact the following:

 
 Eddie Gonzalez    Mayan Energy Ltd              + 1 469 394 2008 
 Charlie Wood      Mayan Energy Ltd              [phone] 
 Roland Cornish    Beaumont Cornish Ltd          [phone] 
 James Biddle      Beaumont Cornish Ltd          [phone] 
 Nick Bealer       Cornhill Capital Limited      [phone] 
 Frank Buhagiar    St Brides Partners Limited    [phone] 
 Gaby Jenner       St Brides Partners Limited    [phone] 
 

Notes:

Mayan Energy Limited is an AIM listed (London Stock Exchange) North American based energy Company. The Company is actively pursuing a primary recovery oil strategy focused on re-stimulating wells within mature producing basins with immediate cash flow leveraging commercially available technologies and projects that are shallow, low risk with low levels of capex and infrastructure already in place. It also remains interested in creating shareholder value by strategic investments in similar projects with high cash generative potential and by forming beneficial development partnerships that enable the use of pioneering and leading extraction technologies. The Company is currently primarily focussed on building out production at its Stockdale and Forest Hill oil fields in Texas.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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June 27, 2018 05:20 ET (09:20 GMT)