Block Energy, the development and production company focused on Georgia, has announced the successful completion of a £1.5 million equity fundraising at an issue price of 0.7 pence per share, and an update on operational and asset progress across its portfolio.
Highlights:
- The fundraising comprises an institutional placing of, and direct subscriptions for, a total of 214,282,000 new ordinary shares of 0.25 pence each ("Ordinary Shares") at the Fundraising Price (the Placing and Subscription, together the "Fundraising").
- Fundraising completed with strong demand from new and existing investors, providing additional financial flexibility to progress growth initiatives.
- Proceeds strengthen the balance sheet at a time of active commercial negotiations on asset farm-outs and continued progress of the Company's new venture strategy.
- Project IV (XIQ) farm-out remains on schedule, with positive feedback received from governmental authorities.
- Project III farm-out negotiations advancing with multiple third parties.
- Project II subsurface and redevelopment planning progressing in line with schedule.
- Project I well KRT-39ST drilled safely, on time and within budget, marking the first successful application of 'slim-hole' drilling technology in Georgia.
Summary of the Fundraising:
The Fundraising, conducted within existing share allotment authorities, is Block's first equity fundraise since 2020 and raised £1,499,974 from certain investors (including institutional investors), before expenses.
107,141,000 warrants will be issued to the investors, on the basis of 1 warrant for every 2 new Ordinary Shares subscribed. The Warrants will have an exercise price of 1.0p per share and an exercise period valid for 12 months from Admission.
The issue of the Warrants is subject to shareholder approval for the headroom required, with a general meeting of shareholders of the Company to be held within 90 days of today's date. The funds will be applied to:
- Support the completion of the Project IV ("XIQ") farm-out, which is expected to conclude in Q4 2025 or Q1 2026.
- Advance the Project III farm-out process, with commercial discussions continuing to progress.
- Continue development of the Company's CCS project, including implementation of the third-party verification programme.
- Pursue new venture opportunities in both Georgia and internationally.
- Establish greater financial headroom in the event of further commodity price fluctuations.
Operations Update:
Project IV (XIQ):
Good progress is being made on completion of the Project IV farm-out, with the existing parties - Block, Georgian Oil and Gas Limited ('GOGL') and Georgia Oil and Gas Corporation ('GOGC') - working to complete the transaction. Upon completion, the Parties will see a leading international E&P company commit to a significant exploration work programme focused on the Martkopi Terrace prospect which holds 301.7 MMboe mean unrisked recoverable prospective resources (DeGoyler MacNaughton 2023).
Project III:
Negotiations are advancing with a major international energy and petrochemical company on a potential farm-in to Project III.
In parallel, Block has signed a non-exclusive Memorandum of Understanding with a leading international trading company establishing a framework for potential future gas offtake and marketing cooperation. Efforts on the gas marketing side are in support of ongoing discussions around the farm-out of Project III, which would see initial production of 20 MMCF/d (c. 3,300 boepd) following completion of the appraisal programme, with planned ramp up (in the 2C case) to 200 MMCF/d (c. 33,000 boepd).
Project III is a strategic gas appraisal project, located approximately 15km from the Southern Caucuses Gas Pipeline ('SCP'), a major component of the Southern Gas Corridor, which sees natural gas delivered primarily from Azerbaijan to Turkey and EU markets.
The 2024 Independent Engineering Report ascribed 1,074 BCF 2C contingent resources and an NPV10 of USD 501 MM (OPC, 2024) to the Patardzueli-Samgori field. Project III also contains an additional two fields (Rustavi and Teleti), both with proven gas, and a low-risk exploration prospect, the South Dome field.
The Company continues to receive strong support from the Georgian government for its planned farm-out of Project III, reflecting the project's strategic alignment with Georgia's objective to expand domestic gas production and strengthen its role within the regional energy corridor
Project II:
The Company continues to advance a detailed field redevelopment plan for Project II, focused on unlocking substantial contingent resources through the application of its proven slim hole drilling and completion techniques, infrastructure optimisation, and phased production reactivation.
The redevelopment effort and supporting plan, will form the basis of a high-impact farm-out opportunity for industry partners seeking immediate access to significant resources and near-term production with infrastructure. Given the onshore nature of the project and proximity to infrastructure (including the intercontinental Baku-Tbilisi-Ceyhan oil export pipeline) the redevelopment has significant economic value.
Patardzueli-Samgori Middle Eocene (Project II) contains 2C contingent resources of 235.0 MMbbl (Block Energy, 2022).
Project I
The latest project I well, KRT-39ST, was drilled safely, on time, and within budget, marking the first successful application of the Company's 'slim-hole' technology in Georgia.
The operation, executed using the Company's own rig and crew, achieved its primary technical objectives and validated the efficiency of the drilling methodology. Completion operations are currently underway after which the well will be passed to the production team as part of Company's baseline Project I production portfolio.
Application for Admission and Total Voting Rights
The 214,282,000 new Ordinary Shares will rank pari passu in all respects with the existing ordinary shares of 0.25 pence per share in the capital of the Company. Application has been made to the London Stock Exchange for the new Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will become effective at 8:00 a.m. on or around 13 November 2025.
Following Admission, the Company's enlarged issued ordinary share capital will be 986,935,343 Ordinary Shares. This figure may be used by holders of Ordinary Shares 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 Guidance and Transparency Rules.
Commenting, Paul Haywood, Chief Executive Officer of Block Energy Said:
'This fundraising represents the Company's first equity raise since 2020 and was completed with strong institutional support. The proceeds provide additional flexibility as we progress multiple commercial workstreams, including the farm-outs of Projects III and IV, advancement of our CCS pilot, and the build-out of a new ventures portfolio designed to deliver material growth opportunities.
Operationally, the team continues to deliver. The KRT-39ST well was drilled safely, on time and within budget, marking a technical first for Georgia with the successful deployment of our slim-hole drilling technology. Early results from our CO2 mineralisation programme are encouraging and demonstrate our ability to innovate and adapt as the energy transition accelerates.
With a strengthened balance sheet, a high-impact pipeline of projects, and growing industry engagement, Block is positioned to build further value across both its core portfolio and emerging new ventures'.
Source: Block Energy
