Block Energy acquires stake in Georgia’s XIQ production sharing contract

Block Energy plc (AIM: BLOE), a production and development company, has acquired a 10% participating interest in the XIQ Production Sharing Contract (PSC) in Georgia, with the option to increase its stake to 22%, the company announced Thursday.

The XIQ licence is highly promising, with estimated mean unrisked recoverable resources of 451.5 million barrels (MMbbl) of oil and 823.3 billion cubic feet (BCF) of gas, according to a 2023 resource report by DeGolyer and MacNaughton. The primary focus is the Martkopi Terrace prospect, which holds a potential 267.2 MMbbl.

Paul Haywood, CEO of Block Energy, expressed enthusiasm for the acquisition: “We are delighted to acquire an interest in the highly prospective XIQ licence, further strengthening our portfolio of strategic, high-impact assets.” Haywood highlighted the significance of the resources report and the participation of Georgia’s national oil company, Georgian Oil and Gas Corporation (GOGC), in the opportunity.

The initial work program includes re-entering the Martkopi-10 well and conducting an environmental baseline study. Discussions with potential farm-in partners are ongoing for additional seismic and drilling work.

The transaction is fully funded through Block Energy’s existing cash reserves, and the company confirmed it has met its obligations under the Joint Operating Agreement (JOA). Block Energy also noted that its stable production base continues to exceed the company’s breakeven point.

The XIQ PSC, located north of Block Energy’s existing XIB PSC, is operated by Georgian Oil and Gas Limited (GOGL) in collaboration with GOGC. GOGL is actively engaged in advanced discussions with several parties regarding a potential farm-out of the licence.

Block Energy anticipates that 2025 will be a pivotal year as the company balances high-impact exploration and appraisal objectives with financial discipline. Further updates are expected as the year progresses.