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LONDON (Alliance News) - Block Energy PLC on Tuesday said it inked an agreement with Georgian Oil & Gas Ltd to take its stake in the West Rustavi Licence to 100%.
Currently, Block Energy owns a 25% interest in the West Rustavi licence, located in Georgia. Block's interest in the licence is held via its subsidiary Georgia New Ventures Inc.
On completion of the transaction, Block will take full strategic control of operations in the field, which holds an estimated 38 million barrels of gross contingent resources of oil.
The acquisition of the remaining 75% stake, will proceed in different stages.
The first 71.5% interest will be paid USD250,000 in cash on completion. Additionally, within 30 days, Block Energy will pay a further USD500,000 in cash which will be used by Georgian Oil & Gas to subscribe for shares in Block Energy at at least 4 pence each.
The second stage will see Block Energy take its interest in the licence to 90% for USD250,000 in cash. The third stage, to increase to 100%, will be again USD500,000 in cash to be used by Georgian Oil & Gas to subscribe for Block Energy shares.
The company currently has sufficient cash resources to meet its obligations under each of the stages above, Block Energy said.
Block Energy shares were trading down 1.4% at 3.85 pence each on Tuesday afternoon.