Block Energy, the development and production company focused on Georgia, has provided a portfolio update covering progress on farmouts, Carbon Capture and Storage ('CCS'), drilling activity, and new venture opportunities.
Farmout Update
The Company's active farmout programme continues to progress positively, in-line with its strategy of advancing multiple high-impact projects while minimising shareholder dilution.
- Project III: Discussions, including advanced due diligence processes with multiple interested parties, remain ongoing.
- Project IV (XIQ): Block and its partners on the XIQ licence are in negotiations with a leading international E&P company with respect to a potential farm-out of the licence. While there is no guarantee that a transaction will be concluded, the Company is encouraged by the strong technical and commercial alignment to date and will provide further updates as appropriate.
CCS Pilot Update
Further to the announcement on 14 April 2025, the Company continues to lead regional efforts in CCS innovation and is pleased to provide the following update on its CO2 injection pilot:
- Injection operations are scheduled to commence in the current quarter.
- Following the pressure communication test, tracer testing has also confirmed connectivity between the injection and monitoring wells, providing a strong technical foundation for the verification of the mineralisation of CO2 following injection. The tracer tests are ongoing and, once sufficient data is acquired, injection will commence.
- A detailed monitoring and verification programme has been developed.
- Data generated from the pilot will support validation of CO2 mineralisation and underpin commercial engagement with industrial emitters and carbon market participants.
If successful, the pilot will mark the first instance of mineralisation-based CO2 storage in the region, positioning Block as a first mover in this space and opening the door to future carbon credit revenues and broader decarbonisation partnerships, particularly with industrial companies exposed to CBAM (Carbon Border Adjustment Mechanism) regulation.
Project I Drilling Update
The Company is planning to spud a sidetrack in late September/October this year. The sidetrack will be the first use of directional 'slim hole' technology in Georgia and budgetary estimates see the well being drilled and completed for approximately 40% of the cost of Block's previous 'conventional' Project I sidetracks.
The well is being drilled as a pilot for the Company's 'slim hole' technology. If successful, it has the potential to unlock significant additional low-cost drilling opportunities across Projects I and II. The programme is being funded from existing cash resources.
At current production rates of approximately 480 boepd (July average) and prevailing oil prices, the Company remains operationally cash-flow positive.
New Ventures
In parallel with progress across the core Georgian portfolio, Block continues to evaluate additional growth opportunities that align with its capital-efficient strategy.
- Georgia: Georgia Oil and Gas Limited ("GOGL") has been awarded the XIH Production Sharing Contract, and the Company is considering exercising its option to acquire a 20% working interest in the asset. This follows the successful joint venture partnership with GOGL across the XIQ licence in Project IV, and provides exposure to additional high-quality exploration acreage.
- International: Block continues to evaluate proven, undeveloped, off-market opportunities internationally that align with its operating model. The Company remains focused on areas where members of the team have relevant experience.
Commenting, Paul Haywood, Block Energy Chief Executive Officer said:
'We are making progress on multiple fronts. Our ongoing farmout programme continues to build momentum as we pursue capital-efficient pathways to unlock the value of our high-impact Georgian portfolio. The upcoming CCS injection pilot, marks a major milestone in our decarbonisation strategy, early technical indicators are encouraging, and success would position Block at the forefront of mineralisation-led CO2 storage in the region.
'We are also preparing to pioneer a new slim-hole drilling technique, aimed at delivering significant cost cuts and productivity gains. Alongside this, we continue to advance a number of new venture opportunities, both in Georgia and internationally. Throughout, our focus remains firmly on capital discipline, technical innovation, and long-term value creation across the portfolio.'
Source: Block Energy
