(Alliance News) - Georgia-focused Block Energy PLC on Thursday announced the acquisition of two blocks from Schlumberger BV.
Block Energy has purchased Blocks XI and Block IX, which are in the production and exploration phases respectively.
The company 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, 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 Energy shares were 32% higher on Thursday afternoon in London at 2.91p.
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.
"We are extremely pleased to announce the acquisition of the production sharing contracts for Block IX and Block XIB in Georgia from Schlumberger. The acquisition is transformational for Block Energy, providing the company scale and increased production, reserves and resources," said Block Energy Chief Executive Paul Haywood.
"A critical component of this transaction is that it will be completed with no cash consideration, using options on our own share capital. The acquisition demonstrates management's ability to identify, compete for and secure the right deals for its shareholders in an environment posing unprecedented challenges for the industry."
By George Collard; georgecollard@alliancenews.com
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Block Energy P. (BLOE)