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LONDON (Alliance News) - Georgia-focused Block Energy PLC said Friday it has signed a memorandum of understanding for a gas offtake agreement in the country.
The memorandum, signed with Georgian gas supplier Bago Ltd, covers the company's 25% owned West Rustavi permit.
Bago will acquire gas produced at West Rustavi at a minimum of 1,000 cubic metres of gas a day, and it is also considering whether to fund gas infrastructure at the permit.
Block said a final agreement will be conditional on final price negotiations and successful gas appraisal work at West Rustavi.
Managing Director Paul Haywood said: "I am highly encouraged by progress we have made towards securing a final offtake agreement with Bago, one of Georgia's largest domestic private gas traders with extensive infrastructure capable of handling large volumes of gas.
"West Rustavi offers huge value potential for Block and with rig contracts now in place, we are all set to commence work programmes to unlock this potential and upgrade resources to proven reserves."
He continued: "With multiple gas discoveries having already been made within the licence which lie on trend to the same play currently being targeted by Schlumberger on a neighbouring licence, Block XIb, I look forward to commencing our imminent work programme with optimism as well as to updating the market when a final offtake agreement has been put in place."
Shares were 2.3% higher Friday at 3.02 pence each.