Block Energy (BLOE) – CEO interview
Georgia-focused oil firm, Block Energy, has just completed a £12 million fundraising. CEO Paul Haywood is confident in his outlook.
Block Energy shareholders have made large gains in 2019, with the share price rallying as much as 520% year to date on news of positive drilling results, before settling over the past month.
Speaking to IG’s Jeremy Naylor, its chief executive officer (CEO), Paul Haywood, outlined his plans.
The proceeds from the £12 million raise will be used to accelerate production in the West Rustavi field, dig additional wells and look at additional acquisition opportunities.
West Rustavi has a mix of oil and gas assets, with contingent resources of up to 38 million barrels of oil and an estimated gas reserve of 600 billion cubic feet, which could transform the company’s prospects.
Haywood has a 12-month production target ranging from 1500 to 2000 barrels per day. The lower figure would generate up to $1.7 million of free cashflow per month with oil at $65 a barrel.
Looking into the future he thinks the three-year development program could see Block Energy extract 8000 barrels of oil per day and whilst also having gas production of 15 million cubic feet per day, which would offer a combined free cashflow to the company of around $25 million.
Storage capacity onsite at the West Rustavi field is insufficient but Haywood is confident that arrangements will soon be made with a major oil trading company, expecting to put out a note to the market when that is formalised. He notes that the West Rustavi output is of high quality, attracting a modest discount to the Brent Crude spot price.