(Alliance News) - Block Energy PLC on Friday announced changes to the acquisition of Schlumberger Rustaveli Co Ltd, set for completion on Monday, leading to the company's stock jumping in value.
Block Energy shares were up 30% at 4.95 pence each in London on Friday morning.
The exploration and production company focused on Georgia said that, on completion, it will take 29,000 barrels of crude oil inventory.
"The oil inventory is a welcome boost to Block's balance sheet and will support the company in its integration of the assets and incremental production, into the Block portfolio," Block Energy said.
Additionally, Schlumberger is to enter into a transition services agreement with Block Energy, to assist with the handover.
In March, Block Energy announced the acquisition of two blocks from Schlumberger, Blocks XI and Block IX, which are in the production and exploration phases, respectively.
Block Energy said it will issue Schlumberger options giving the Texas-based firm the right to acquire 120 million Block Energy shares at a nil exercise price, which would give it a 23% stake.
The options are exercisable between 12 and 24 months from completion, Block Energy said, and there is an implied value to the base options of USD0.05, which Block said is a 92% premium to its closing price in London on Wednesday of 2.2 pence.
Block XI is the largest-ever production asset in Georgia, Block Energy said, producing over 180 million barrels of oil so far in its lifetime. It is located in the Kura basin, mainly producing from the Middle Eocene age.
Block IX covers 1,925 square kilometres. It has 38 legacy wells, with two wells drilled since 2013 containing oil and gas shows.
Block Energy Chief Executive Paul Haywood said on Thursday: "I am delighted to be able to inform shareholders about the amendments to the sale and purchase agreement and that the acquisition of Blocks XI and IX is in near sight.
"We look forward to November 23, when we will commence ownership of these transformational assets. They will truly define our future as an oil and gas company in Georgia."
By Greg Roxburgh; gregroxburgh@alliancenews.com
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Block Energy P. (BLOE)