BlockFuel Energy Inc. is progressing permits for the proposed Steinman #1-23 well in Central Oklahoma and has begun operating an initial natural gas-powered computing and data mining installation near Stillwater. The company also said its proposed merger with Innovation Beverage Group Limited remains subject to required approvals and the satisfaction of remaining closing conditions.
#Steinman #1-23 drilling remains conditional
BlockFuel expects drilling at Steinman #1-23 to begin in early December 2026. The proposed start depends on required regulatory approvals, site preparation and the availability of contractors and equipment.
The planned vertical well is intended to test the Mississippian formation at approximately 4,700 feet. BlockFuel is also assessing a possible Wilcox formation test at approximately 5,100 feet, subject to final technical review, permitting and budget approval.
The company said information from the well could help assess reservoir quality, completion requirements and the economics of comparable locations. It also noted that results from individual wells may vary and that a successful outcome would support further development.
#Natural gas-powered computing installation is operating
BlockFuel has installed and commenced operating its initial gas-to-power computing and data mining equipment on its acreage near Stillwater. Natural gas is used to fuel onsite generators, with the electricity then supplying the computing equipment.
The installation is being used to assess generation reliability, fuel consumption, computing performance, maintenance requirements and overall economics. BlockFuel said the results will inform any consideration of future expansion.
The company said the financial outcome of the operation will depend on the value of the computing output compared with fuel, equipment, maintenance and other operating costs. Potential future applications involving artificial intelligence or high-performance computing would require separate assessments of connectivity, cooling, power reliability and customer demand.
#Oklahoma asset base and development options
BlockFuel's previously disclosed Oklahoma position covers approximately 55 square miles, or roughly 35,000 acres. It includes producing and temporarily shut-in wells, oil storage, natural gas gathering facilities and saltwater disposal infrastructure near Stillwater.
The company's stated development options include reactivating suitable shut-in wells, recompleting existing wells where technically appropriate, drilling selected new vertical wells and considering additional gas-to-compute installations where gas availability and commercial returns support investment.
BlockFuel has previously identified more than 200 potential drilling locations across its acreage. The company said these locations require further assessment and do not represent a commitment to drill. Their commercial potential depends on geological results, approvals, funding and operating economics. They do not constitute proved reserves or assure future production.
#Proposed merger with Innovation Beverage Group
Innovation Beverage Group, which trades on Nasdaq under NASDAQ:IBG, owns approximately 51% of BlockFuel. IBG, BlockFuel and InnoBev Merger Corp., a wholly owned subsidiary of IBG, have entered into an amended and restated agreement and plan of merger.
The proposed transaction remains subject to required approvals, including Nasdaq's approval of the combined company's listing application, as well as the satisfaction of remaining closing conditions. The companies expect to complete the merger as promptly as practicable following those approvals, but the announcement states that there is no assurance the merger will be completed within the targeted timeframe or at all.
If completed, IBG is expected to be renamed BlockFuel Energy Limited, BlockFuel would become its wholly owned subsidiary and the combined company is expected to trade on Nasdaq under the symbol BFE, subject to the required approvals. IBG's existing beverage operations would continue within a separate subsidiary.
#Risks and upcoming updates
BlockFuel identified regulatory approval timing, geological conditions, drilling and completion results, gas availability and quality, contractor and equipment availability, financing, commodity prices, digital asset prices and mining difficulty, equipment performance and operating costs as factors that could affect its plans and results.
The company said there can be no assurance that Steinman #1-23 will be commercially successful or that the computing operation will generate positive returns. It also said the proposed merger, drilling timing, target formations and depths, potential drilling locations, production growth, gas-to-compute economics and possible expansion are forward-looking matters subject to risks and uncertainties.
BlockFuel expects to provide updates on merger progress, the proposed IBG name change, permitting and site preparation for Steinman #1-23, drilling and testing results as available, and the performance and possible expansion of the initial gas-to-compute installation.
#Key Takeaways
- BlockFuel expects drilling at the proposed Steinman #1-23 well to commence in early December 2026, subject to regulatory approvals, site preparation and contractor and equipment availability.
- The planned well would test the Mississippian formation at approximately 4,700 feet; a potential Wilcox test at approximately 5,100 feet remains subject to technical review, permitting and budget approval.
- An initial natural gas-powered computing and data mining installation near Stillwater is operating, with results to be assessed against fuel, equipment, maintenance and other operating costs.
- BlockFuel's proposed merger with Innovation Beverage Group remains subject to required approvals and remaining closing conditions.
- More than 200 potential drilling locations have been identified, but they require further assessment and are not a commitment to drill or an assurance of future production.
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