Block Energy announces the acquisition of two adjacent blocks from Schlumberger. Block Energy will acquire producing Block XIB and exploration Block IX. It is agreed that Schlumberger will apply to relinquish Block X. The Acquisition significantly increases Block’s access to production, reserves and resources. It represents a major milestone towards the Company’s objective of becoming the leading independent oil and gas producer in Georgia. Completion of the Acquisition is conditional upon regulatory approvals in Georgia and the United Kingdom. 

Highlights

• No cash consideration. Instead, options over Block's share capital for the Acquisition conserves the Company's cash reserves.
• Acquisition of producing Block XIB (615 km²) and exploration Block IX (1,925 km²). Block XIB is Georgia's most productive block, with over 180 million bbls of oil produced from the Middle Eocene, peaking in the mid-1980s at 67,000 bopd.
• Boosts 2P reserves of oil and gas by 64 million boe and initial production by 245 bopd.
• Offers approximately 600 BCF of initial-gas-in-place in the Lower Eocene and Upper Cretaceous, following Schlumberger's recent appraisal drilling.
• Increases 2C contingent resources by 29 million boe and offers significant upside potential of 245 million boe of prospective resources.
• SRCL has a cost recovery pool of around US$133 million on Block XIB.
• Includes oilfield materials inventory of US$1.5 million in value, estimated by Block.
• Includes central production facility with storage for 36,000 barrels of oil, a workshop, a laboratory, and a compound with an office and warehouse.
• The new permits share synergies with Block's existing operations.
• Minimum work programme fully fulfilled on Block XIB and Block IX.
• A term of 14 years remaining on both permits with possible extensions of five years.

Block Energy Chief Executive Officer Paul Haywood said:
"We are extremely pleased to announce the acquisition of the PSCs 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. 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. We have posted a short presentation on our website www.blockenergy.co.uk  and look forward to completing the deal and updating the market further with a work programme for the enhanced integrated portfolio."

Link to Block Energy Georgia country profile