Block Energy Provides Q1 Operational Update

Block Energy plc, the exploration and production company focused on Georgia, is pleased to announce the following operations update for the three months ended 31 March 2022.

Highlights
· Over 92,000 operational man-hours worked in Q1 2022, with no lost-time incidents
· Strong exit Q1 production rate of over 630 boepd
· Q1 production of 46.1 Mboe (Q4: 34.6 Mboe) or an average of 512 boepd
· Q1 revenue of $2,361,000 (Q4: $2,550,000)
· Long-lead items received and gathering pipeline being built for well WR-B01 sidetrack

Health and Safety
92,000 operational man-hours have been worked by staff and contractors in Q1 (Q4: 110,000 hours) with no lost-time incidents.

Operations
JKT-01Z commenced production in mid-January 2022. Analysis indicates the well is in good communication with the in-place volume of 8 MMbbls associated with long-term producing well KRT-39.

Gas production from J KT-01Z was quickly tied into the gas infrastructure at well KRT-39 to support rapid monetisation. Since mid-January 2022, oil and gas production from JKT-01Z has delivered substantial additional cashflows to the Company, supporting early payback and moving the Company into being cashflow positive.

Preparations for the drilling of the side-track of well WR-B01 continue to make good progress. Many of the long-lead items required to drill two sidetracks have been purchased and already arrived in Georgia. Furthermore, construction of the pipeline from the WR-B01 to WR-38 wellsites, to enable the immediate monetisation of any gas produced from the WR-B01 sidetrack, has commenced.

Oil and Gas Production
During Q1, gross production was 46.1 Mboe (Q4: 34.6 Mboe), comprising 32.1 Mbbls of oil (Q4: 24.9 Mbbls) and 14.0 Mboe of gas (Q4: 9.7 Mboe). The average gross production rate for Q1 was 512 boepd (Q4: 376 boepd).

Production in Q1 was impacted due to well WR-38Z being off-line. WR-38Z was brought back into production at the end of March, replenishing lost production providing a strong Q1 exit rate for daily production of over 630 boepd.

Oil Sales
In Q1, Block sold 24.4 Mbbls of oil (Q4: 33.6 Mbbls) for $2,168,000 (Q4: $2,441,000), resulting in a weighted average price of approximately $89 per barrel (Q4: $73 per barrel), representing a 22% increase in the realised price in Q1 compared with Q4.

Gas Sales
In Q1, the Company sold 48.4 MMcf of gas (Q4: 36.1 MMcf) for $193,000 (Q4: $109,000), resulting in a weighted average price of approximately $4.00/Mcf (Q4: $3.03/Mcf).

Cash Position
As at 31 March 2022, Block had $1.2 million cash at bank (31 December 2021: $1.2 million).

Block Energy plc's Chief Executive Officer, Paul Haywood, said:
"As the first quarter production results demonstrate, the Company is delivering operationally, which combined with improved commodity prices, creates a robust financial result. This gives us a stronger platform to deliver on the inherent value of Block's assets and monetise the wider reserves and resources within our portfolio. We believe we now have a better understanding of the subsurface, which we have translated into a practical plan to grow production and create value for shareholders. While we can do this with our existing resources, we are also looking into non-dilutive financing options to accelerate production growth, and other ways to enhance value for shareholders."