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DJ Block Energy Plc Acquisition and Total Voting Rights

1 August 2017 
              Block Energy plc ("Block Energy" or the "Company") 
        Acquires producing oil field in Georgia and Total Voting Rights 
Block Energy, the exploration and production company focused on the Republic of 
Georgia, is pleased to announce it has secured a 90% working interest in the 
Satskhenisi Production Sharing Agreement ('SKN PSA') via the acquisition of 
100% of the share capital of Satskhenisi Ltd, ('SMI') a Marshall Islands 
registered company ('the Acquisition'), from Iskander Energy Corp., a 
privately-owned company registered in Alberta, Canada. The SKN PSA, which 
neighbours the Company's Norio field in Georgia and lies 50km from Tbilisi, 
currently produces light, sweet crude oil and has significant conventional and 
unconventional appraisal and development upside. 
The Acquisition, which is to be funded via the issue of new ordinary shares in 
the Company, is in line with the Company's strategy to build a portfolio of low 
cost/high impact development assets in a proven region of Georgia and rapidly 
scale up production and reserves via the implementation of low cost work 
Subject to Iskander Corp. meeting certain commercial Condition Precedents 
("CPs"), the Company will issue 70,000,000 new ordinary shares in the Company 
as consideration to Iskander Energy Corp. As a result of the transaction 
Iskander Energy Corp. holds 14.35% per cent. of the enlarged issued share 
  * 26.3sq km field holds multiple wells that have produced more than 310,000 
    barrels ("bbls") oil to date from the lower Miocene (Maikop) geological 
    horizon - currently producing approximately 10bbls/d of 35-40deg API sweet 
    oil from three wells 
  * Significant potential to scale up production and reserves from both the 
    Maikop as well as uphole in geological formations similar to the producing 
    zones in the Company's neighbouring Norio Permit 
  * Oil in place of more than 65 million bbls in the Maikop (internal 
    estimates) - potential for this to double following the successful 
    development of additional geological horizons 
  * Production is highly profitable at today's oil prices: low operating costs 
    of US$20-US$25/bbl; oil sold at Brent Crude rates minus US$9/bbl for 
    marketing and transport 
  * Excellent fiscal terms - the Company retains 75% of revenue (including 
    taxes and royalties) from oil sales until all historical and future capital 
    costs are recovered (>US$10M) 
  * Permit runs to December 2025 with a five year extension available 
  * Acquisition includes a significant inventory of oilfield equipment and 
    materials valued at approximately US$500,000 
  * Near term development plan at SKN PSA includes several minor workovers and 
    re-activations on existing wells to boost production 
Paul Haywood, Director, said, "The acquisition of Satskhenisi is yet another 
milestone for Block Energy, as not only does the asset add immediate production 
and cash flow to our portfolio, it also adds to the significant resource base 
that our existing Norio and West Rustavi fields already provide.  In line with 
our strategy we are building a portfolio of proven oil and gas assets which 
share the same geology.  Success at any of our fields during our upcoming work 
programme will therefore have direct read across for the rest of our portfolio, 
including Satskhenisi, and we believe this will prove to be a value trigger 
event in terms of both reserves and shareholder value.  This is an exciting 
period for the Company and I look forward to providing further updates on our 
Further information on the Satskhenisi Permit 
The Satskhenisi Permit has multiple wells that continue to produce oil from the 
lower Miocene ("Maikop") deposits from depths of approximately 500-1400m. 
 Similar to the Company's Norio licence, oil and gas rights for the SKN PSA are 
held down to depths of -1300m subsea which equates to approximate drilled 
depths of 2,300m measured from surface. 
The principal producing formation is a series of clay-rich sands and shales 
that are also believed to be the source rocks for much of the oil produced in 
the region.  Gross Maikop thickness is 500-700m with cumulative net sand 
thicknesses in many wells exceeding 100m resulting in a significant oil in 
place value of more than 65mmbbls according to internal estimates.  There is 
also significant upside potential in both the upper and middle Miocene as well 
as repeated thrust sections of the deeper Maikop formation.  It is estimated 
that successful development of these additional geological horizons represents 
a more than doubling of the current estimates for oil in place. 
The SKN field was originally discovered and developed in the 1950s during the 
Soviet era in Georgia's history.  No further work was completed in the field 
until Iskander farmed into the field in 2013 and drilled two development wells 
and completed hydraulic fracture stimulation work in multiple zones. 
Production results from this work were less than anticipated and Iskander 
discontinued further attempts due to the depressed oil price environment and 
lack of further corporate financial resources.  Technical and operational 
learnings from that work programme will be used to guide the field's future 
The acquisition of the Satskhenisi permit brings unique operational synergies 
including a significant inventory of oilfield equipment and materials valued at 
approximately US$500,000 which will be useful in the Company's Georgian 
drilling and workover programme scheduled to begin later this year.  Key 
learnings gained in the Norio field will be applied to the direct analogue 
formations in the Satskhenisi Permit, thereby offering significant leverage and 
upside to the Company. The Satskhenisi Permit has no outstanding workplan 
commitments to either the Georgian state or the working interest partner. 
A modern independent reserves evaluation study for all of its Georgian Permits 
is underway with Gustavson and Associates (based in Boulder Colorado, USA). 
This study's scope will be expanded to include the SKN PSA area. 
Block Energy's near-term development plan for the SKN PSA will be to complete 
several minor workovers and re-activations in Q3/Q4 2017 on existing wells to 
boost existing production.  The Company's early main focus will be on the 
recently acquired Norio and West Rustavi fields.  Successful operational 
procedures and results, particularly in Norio, will be applied to the SKN PSA 
later in 2018. 
Oil sales from the SKN PSA have been occurring most quarters for the last three 
years.  Full payment for the oil sales has been received consistently within a 
week of the sale date.  The crude from the SKN PSA is of premium quality and 
can be blended with the slightly heavier crude (28 deg API) from the Company's 
Norio field to ensure that all crude receives the best market price possible. 
Total Voting Rights 
In accordance with the Financial Conduct Authority's Disclosure and 
Transparency Rules, the Board of Block Energy confirms that the Company has 
428,413,388 Ordinary Shares in issue, each share carrying the right to one 
vote. The Company does not hold any Ordinary Shares in treasury. 
Accordingly, the Company has a total of 428,413,388 shares in issue which carry 
voting rights. This figure may be used by shareholders in the Company as the 
denominator for the calculations by which they will determine if they are 
required to notify their interest in, or a change to their interest in, the 
share capital of the Company under the Financial Conduct Authority's Disclosure 
and Transparency Rules. 
The Directors of the Issuer accept responsibility for this announcement. 
For further information contact: 
Block Energy plc  Executive 
Director                          Tel:  020 3053 3631 
Paul Haywood                      Paul 
Peterhouse Corporate Finance      Tel +44 020 7469 0930 
Guy Miller / Mark Anwyl 

(END) Dow Jones Newswires

August 01, 2017 02:00 ET (06:00 GMT)