Block Energy plc said it has completed negotiations for the farm-out of license XIQ in Georgia with an undisclosed E&P company “with a successful record of exploration and development in the Eastern European region”.
The agreement will become legally binding upon approval by the government of Georgia, expected in the fourth quarter of 2025 or the first quarter of 2026, Block Energy said in a news release.
Under the agreement, the farm-in partner will acquire up to a 75 percent working interest in the XIQ license following the execution of the agreed work program, consisting of 3D seismic and three deep high-impact wells in the Martkopi Terrace prospect. Additionally, it will also receive an option to increase its interest to 92.5 percent, in return for certain cash and royalty payments, according to the release.
Financial terms of the agreement were not disclosed.
The primary target of the farm-in is the Martkopi Terrace prospect, a structure identified on 2D and 3D seismic in close proximity to the Patardzueli-Samgori field, which produced around 180 million barrels from the same target reservoir, Block Energy said.
The XIQ license is currently operated by Georgia Oil and Gas Limited (GOGL) which holds a 68 percent interest, Georgia Oil and Gas Corporation (GOGC) with 22 percent, and Block Energy with 10 percent interest and an option to increase to 22 percent. The license is located north of Block Energy’s existing XIB contract area and contains significant prospectivity, according to a recent resource report cited by Block Energy.
The total mean unrisked recoverable prospective resources for the XIQ license is estimated at 588.7 million barrels of oil equivalent (MMboe), with Martkopi Terrace estimated to have mean unrisked recoverable prospective resources of 301.7 MMboe, the company said.
Block Energy CEO Paul Haywood said, “The successful conclusion of negotiations represents a major step for the development of the XIQ license and a material milestone for Block Energy and our shareholders. The significant proposed investment by a company with an excellent track record for exploration underlines the quality of our asset base and the prospectivity within the basin”.
“[While] there can be no certainty that the transaction will complete, the effort and progress from the XIQ partners and [prospective farm-in firm] provides confidence in a successful outcome. At completion, the agreement will not only unlock the potential of XIQ but should provide momentum to the ongoing farmout of Project III as well as other licenses within the Project IV portfolio,” Haywood continued.
“We look forward to concluding the farmout agreement with our new partner and publishing full details of the transaction with our stakeholders at completion,” he said.
XIQ is a part of Block Energy’s Project IV, which refers to exploration activities within its portfolio in Georgia, including the IX license where the company owns 100 percent interest and the XIH license, where the company has an option to acquire 22 percent.
The XIH license, which is also subject to farm-out discussions, is located south of Block Energy’s existing XIB licence and covers an area of 486 square kilometers. Seven structures have been identified within the XIH licence with an estimated 485.7 MMboe of mean unrisked recoverable prospective resources, according to the release.
To contact the author, email rocky.teodoro@rigzone.com
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