Block Energy operates in a relatively exotic location. Could you tell us about it?
Block Energy is an E&P focused company, in Georgia, just south of Russia.
Because of the Soviet era we do not perhaps know as much about Georgia as we could. What is the lay of the land there from an E&P perspective?
As of today the area consists of smaller E&P companies. Most recently though, there has been an entry by Schlumberger. They have taken a material interest in three license areas surrounding Block's acreage. In addition to Schlumberger there have been other regional players now showing interest in making an entry. As of this year, activity in Georgia really has started to heat up. I have spent the best part of seven years going back and forth to Georgia, and right now the place has become a very exciting destination for many different reasons.
Would it be fair to say that Schlumberger copied your homework, in terms of arriving at the assets in your zone?
I would like to say it was the other way around. But Schlumberger have been studying Georgia for the past 2-3 years, and have been looking at acquiring positions in different assets. We definitely have the same focus and it seems we are sharing a similar technical understanding of the place we are choosing to operate. Therefore the fact that we are neighbouring each other is a good thing for both parties.
As far as what is under the ground is concerned: very often we hear of new discoveries and then it turns out that it may be producing 10 barrels a day, which is harder to commercialise. What is the size of the asset?
Currently we have a majority interest in two key blocks, circa 45km2. We have an interest in another block which we believe is the jewel in our crown, the West Rustavi Field, which borders the Schlumberger asset. The field next to ours at its peak was producing 70,000 barrels a day. As an oil producing region Georgia's production basically fell off a cliff during Soviet times. Since the early 1990s the place has been struggling in production terms. But the potential is obviously there, which of course is underpinned by the Schlumberger entry. The Kura basin - which we are focused - runs down to the east into Azerbaijan. Azerbaijan is obviously a prolific oil producer, and there is no reason why Georgia cannot have similar success, in relative terms.
You updated the market the other week on a recent transaction. Can you tell us about that?
We have just acquired a 90% interest in the Satskhenisi Field. For us the acquisition was a strategic one in that it doubles our land holding in what we believe to be the fairway of Georgia. It adds to our existing production base and is essentially the same technical play as present in our Norio Field. Norio is a key focus for us in the short term, and any success there can easily be applied in Satskhenisi. It all adds to further upside for the company.
For the rest of 2017 is there more to come?
There is plenty of work going on in the background. We are working very hard at developing the opportunities we see.
By Zak Mir
Zak's Trader Cafe
DISCLAIMER: This article is for information only and does not constitute a recommendation to invest. Investment in a company admitted to the NEX Exchange should only be undertaken after careful consideration and, if appropriate, consultation with an independent financial adviser.