A potentially game changing deal that could significantly bolster Block Energy’s already strong cash position.
“…we are building cash in the background which gives us options. We are in a very good place at the moment…”
With Block Energy’s recent trading update revealing the company remained cash flow positive during 2024, will that remain the case for the production and development company?
Chief executive Paul Haywood confirms that is the plan with a good performing asset base that continues to produce healthy volumes of both oil and gas. “The company continues to remain profitable and building a sensible amount of cash on a bi-monthly basis in line with our lifting schedule and remains financially very healthy.”
It’s one of the reasons that participants have agreed to extend a $2.0 million senior secured loan until 2026. One of those participants is Haywood himself who has injected $115,000 into the business that is focussed on Georgia located on the border of Asia and Europe.
Haywood refers to the geography and the existing infrastructure when he talks about Project Three, another major reason that lenders are happy to wait.
This project is potentially transformational for Block and the farm-in suitors who are currently assessing the multi-TCF gas opportunity that sits on the crossroads of Europe.
“It sits in the heart of Georgia that’s surrounded by infrastructure with pipelines that run through Georgia down into Turkey and can take gas produced within the Republic of Georgia into Europe,” enthuses Haywood. “and the volumes are significant, particularly for a company of our size. Most importantly, those volumes can be appraised and developed, given these volumes are located within a brownfield setup.”
Haywood talks about multiple wells that are re-enterable and an overall project that can be developed at relatively low cost when benchmarked against other projects around the region.
He also talks about the recently introduced CCS project which in a nutshell means assisting an industrial player in Georgia that has a carbon problem and wants Block to assist them clean up their operations. That’s the crude explanation, but supported by the government Block is working on the technology to contain the carbon with specialists and will be updating investors on progress in the ‘not too distant future.”
Taking all the above into consideration Haywood tells Sarah Lowther in this interview that Block is undervalued. “Where we differ, certainly to our peer group, is we are cash flow positive and we are building a sustainable business. This isn’t a science project for myself and the team. We’re here to build a sustainable business and make commercial decisions along the way.”
Read the company’s corporate presentation
Block Energy featured in our 10 oil & gas companies to follow in 2024
Follow the company on Twitter @BlockEnergyplc
The author was remunerated but does not hold shares in the company
