Block Energy plc has signed a farm-out agreement with Georgia Oil and Gas Ltd (GOGL) for 50% of its XIB licence in Georgia.
LICENCE XIB
The licence covers a total 614 km2 and includes the Patardzeuli, Samgori, Teleti and Rustavi fields which Block said had produced more than 180 MMbbl of oil.
The company added that the portions of XIB farmed-out focused on exploration, formed part of Block’s newly established Project IV, and excluded any of the areas currently in production.
The portions cover a 103km2 section in the north of the licence (bordering licences XIM and XIQ) and a 148km2 area in the southeast of XIB (bordering licences XIH and XIL).
Block said that the northern section was now known as the ‘Didi Lilo’ area and the southeast section as the ‘South Samgori’.
The company added that the transaction would have no impact on its existing production base or operator status across all existing fields.
GOGL is the largest exploration company in Georgia with an acreage of more than 13,200km2 within various PSCs.
TERMS
The binding joint operation agreements (JOAs) cover a 50% farmout of Block Energy’s non-core areas of the licence.
Terms include a US$3 million work programme comprising $2.5m for 210km of 2D seismic acquisition.
Additionally, the farm-out involves $500,000 for seismic reprocessing of 1,000km existing seismic data within and around Didi Lilo, South Samgori and the remainder of XIB.
Annual gross budgets for the JOAs will not exceed $100,000 ($50,000 net to Block) per annum, until either GOGL or a third-party farminee elects to acquire a 3D seismic survey over the area and / or drill a well.
Block retains the option to either benefit from a carry, fund its share of any future 3D survey/drilling or further farm-down its interest in the licence areas.
SUBSTANTIAL
“This farm-out enables Block to combine and progress advanced exploration opportunities (800 MMBOE) with a capable and well-qualified operator, at de minimis cost, whilst allowing it to continue to focus on its core production and appraisal-led three Project strategy, ” said chief executive Paul Haywood.
“This high-impact exploration opportunity also compliments the existing portfolio with very substantial upside which continues to attract the attention of major oil companies across the region.”
PARTNERS
Block added that in 2022, GOGL received investment from national oil company Georgia Oil and Gas Corporation (GOGC) to mature exploration and appraisal targets within its portfolio, north and south of Block’s Samgori oil field.
The sub-contractor for the 210km 2D seismic data is Geofizyka Torun S.A., a subsidiary of the Polish Oil & Gas Company PGNiG SA, now merged with Orlen Group.
GOGL and Geofizika will interpret the Norio Deep prospect/play to extend to within the Dido Lilo area, a Middle/Upper Eocene prospect/play.
The company will also interpret the Nakarala prospect/play to extend into the South Samgori area.
GOGL and its technical partners have assigned Dido Lilo and South Samgori a risked (P50) resource of more than 400MMboe.
GOGL is also involved in advanced detailed farm-out discussions with national and major oil companies around a farm-in to Dido Lilo and South Samgori.
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