, the oil and gas exploration and production company focused on Georgia, has issued shares as settlement of $500,000 payable to Georgian Oil and Gas Limited in return for increasing Block Energy’s working interest in West Rustavi to 71.%.
The AIM listed company announced in February it is increasing its stake to 100% of its highly prospective West Rustavi oilfield in Georgia. Previously the company signed an earn-in deal for a 75% working interest after a workover and sidetracking programme, but will soon see it take full ownership of the asset.
Block’s CEO Paul Haywood said: “The agreement gives the Company a clear path to a 100% WI in West Rustavi, complementing our respective 100% and 90% interests in the Norio and Satskhenisi fields. A 100% WI in West Rustavi will give the Company complete discretion over the realisation of the field’s potential.”
The shares were issued at 4p a share as per the agreement. The shares are expected to be admitted for trading on AIM on or around 19 March 2019. The company’s issued share capital will then comprise of 270,444,392 Ordinary Shares.
Paul Haywood spoke to Vox Markets about West Rustavi's exciting potential, the progress Block is making in carrying out its horizontal sidetracking programme at the field, and how the deal will give the company complete strategic control over the licence's development.
Block Energy will increase its stake to 90% after a payment of $250,000 in cash, payable on the commencement of further operations at West Rustavi, or August 31 this year - whichever is earlier.
Mr. Haywood added: “The economic impact of this transaction is also significant, whereby in our single well base case production scenario (325 bopd) well netbacks increase by over 40pc on completion of the transaction, to around US$41 per bbl at US$60 Brent.”
“Moreover, we welcome further strengthening of the relationship between Block and our major shareholder GOG. The deal structure, which is heavily weighted towards equity in the Company, is a strong testament of GOG’s confidence in the Company’s current value and potential upside. West Rustavi is an analogue to the nearby Ninotsminda field where the founders of GOG performed horizontal sidetracks increasing initial production from 50 bopd to over 1,900 bopd.”
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