AIM-listed Block Energy, the development and production company focused on Georgia, has provided an update on the Project III farm-out process.
The Company has received a non-binding farm-in offer from a large energy company following extensive technical and commercial engagement.
The indicative offer includes a full carry of the Patardzueli-Samgori appraisal programme, comprising:
- Three historical well re-tests (two Lower Eocene and one Upper Cretaceous);
- Two highly-inclined sidetracks targeting the Lower Eocene; and
- A full suite of reservoir data acquisition and well-testing operations.
In addition to the appraisal carry, the offer includes an initial development carry covering the construction and hook-up of a 20 MMcf/d (c. 3,300 boe/d) early-production facility. Block estimates the total gross cost of the proposed carry to be in the range of US$25-30 million.
The offer is subject to the negotiation of and entry into customary detailed binding agreements as well as Georgian government approval of the transaction.
The Patardzueli-Samgori field contains 1,074 Bcf of 2C contingent resources with an estimated NPV10 of US$501 million (Oilfield Production Consultants, 2024). Project III also includes the Rustavi and Teleti fields, containing a further 1,710 Bcf of 2C contingent resources (Block Energy, 2024), and the South Dome exploration prospect, which contains 574 Bcf of gross unrisked 2U prospective resources (Block Energy, 2025).
Paul Haywood, Chief Executive Officer of Block Energy, commented:
'We are very pleased to have received a farm-in offer from a strong prospective JV partner with whom we have progressed extensive negotiations. While there is no certainty that a transaction will complete, the non-binding offer meets our core objectives: a full carry of the appraisal programme and early-stage development of Patardzueli-Samgori, a field with over 1 Tcf of 2C contingent gas resources, with material upside across the Rustavi and Teleti fields as well as the South Dome exploration prospect which are all located within 15 miles of the South Caucasus Pipeline, one of Europe's major gas import corridors.
We look forward to updating shareholders as negotiations advance and as we continue to progress activity across the wider portfolio.'
Source: Block Energy
