RE: Short Term Future Developments30 Dec 2025 18:25
Block Energy (AIM:BLOE) has taken significant steps towards unlocking the full value of previously discovered fields in the former Soviet republic of Georgia, closing on a farm-in deal for the company’s highly prospective Project III gas resource, and completing a pilot injection programme towards the validation of a major Carbon Capture and Storage (CCS) facility near the capital city of Tbilisi. Initial results have confirmed rapid mineralisation of the injected CO2.
BLOE is now Georgia’s largest independent oil and gas company, with interests in seven PSCs covering an area of 4,256 km2, with good connections to the Southern Gas Corridor linking Azerbaijan with Turkey and southeast Europe. The company’s principal asset is its 100pc interest in the onshore licence Block XIB, historically Georgia’s most productive block. XIB’s key fields have more than 2.77 TCF of 2C contingent gas resources with an estimated NPV of $1.65bn. BLOE is pursuing four concurrent projects to monetise low-cost, low-risk developments across the company’s assets to reinvest in delivering XIB’s gas resource..
The company’s flagship Project III is focused on the undeveloped gas-bearing natural fracture system within the Block’s Lower Eocene and Upper Cretaceous reservoirs. BLOE estimates the Project could achieve production of 4.7 bcm per year – around 40pc more gas than Georgia currently consumes.
Earlier this month BLOE received a non-binding farm-in offer for Project III from ‘a large energy company’. 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 $25-30m.
Negotiations are advancing with a major international energy and petrochemical company on a potential farm-in to Project III. The company has signed a non-exclusive MoU with a leading international trading company establishing a framework for potential future gas offtake and marketing cooperation. The farm-out would see initial production of 20 MMCF/d (c. 3,300 boepd) following completion of the appraisal programme, with a planned ramp up (in the 2C case) to 200 MMCF/d (c. 33,000 boepd).
Project IV is focused on another farm-out, for the XIQ PSC just north of Block XIB, in which the company holds a 10pc interest. Discussions are advanced for a leading international E&P company to commit to an exploration of XIQ’s Martkopi Terrace prospect, which holds 301.7 MMboe mean unrisked recoverable prospective resources.