Block Energy PLC (LON:BLOE) said it has closed the bookbuild for a share placing which is set to raise GBP5.28mln to be used to boost production at the West Rustavi field and recently acquired projects.

The company, in a statement after Wednesday’s close launching the fundraise, had said it intended to bring in GBP5mln. An accelerated bookbuild process was undertaken by stockbroker Mirabaud Securities.

It announced on Thursday that some 176mln new shares will be sold to investors at a price of 3p per share. Block shares closed at 4.15p on Wednesday, and were down 15% to 3.50p in early trade on Thursday, still above the placing price.

READ: Block Energy completes transformational Georgia asset

Block has earmarked the new funds for the implementation of the first phase of a new two-phase development strategy, following its acquisition of the Schlumberger Rustaveli business.

“The equity raise enables Block to deploy capital into its significant portfolio, which has been strengthened by the recent acquisition,” said Paul Haywood, Block chief executive in a statement.

Last week, the company announced the completion of its deal to acquire Schlumberger Rustaveli Company Limited (SRCL), securing the transformational licences for Georgian onshore blocks IX and XI.

The deal significantly increases production and provides fresh several development and exploration opportunities that the company plans to advance in the coming months.

Phase One, over the next twelve months, will see the company restart two existing wells at the West Rustavi field, WR-38Z and WR-16aZ, to resume oil production and commence gas sales from newly commissioned facilities. It will also workover the existing WR-16aZ at West Rustavi.

New drilling will take place with one well planned at the West Rustavi project (it will be known as the WR-BA well) and an existing well (JKT-1) at Block XV will be re-entered to access horizontal sidetrack drilling.

Block anticipates some 550 barrels of oil per day (bopd) of additional production at each of WR-BA and JKT-1.

It is anticipated that Phase One will unlock more than US$40mln of future cash flows and will support the more extensive Phase Two campaign.

In Phase Two, which is slated to start in late 2021, Block envisages the drilling of four new wells – three of which will be at Block XV and the other will be at West Rustavi.

“The second phase will see a further four wells drilled in the group’s portfolio, adding further production and establishing Block as a significant oil and gas producer,” Haywood added.

“I would like to thank all our shareholders for their continued support and welcome our new shareholders as we begin a new phase of development.”

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