Block Energy Expands Georgian Portfolio with Acquisition of XIQ PSC Interest
Why we think this is good
The acquisition of a 10% interest in the highly prospective XIQ PSC represents a positive strategic move for Block Energy, expanding its footprint in Georgia. While the timeline for realizing the full revenue potential is unclear, the low acquisition cost, secured funding, and the company's existing operational experience in the region suggest this is a prudent and value-accretive opportunity.
Key Points
- Acquired a 10% participating interest in the highly prospective XIQ PSC, with an option to increase to 22%
- XIQ PSC estimated to contain 451.5 MMbbl oil and 823.3 BCF gas mean unrisked recoverable prospective resources
- Initial work programme includes Martkopi-10 well re-entry and environmental baseline study, fully funded from existing cash resources
- Baseline production remains stable and above company breakeven
Summary
Block Energy has acquired a 10% participating interest in the highly prospective XIQ Production Sharing Contract (PSC) in Georgia, with an option to increase its stake to 22%. The XIQ PSC is estimated to contain mean unrisked recoverable prospective resources of 451.5 million barrels of oil and 823.3 billion cubic feet of gas. The initial work programme includes a well re-entry and an environmental baseline study, which are fully funded from the company's existing cash resources. Block Energy's baseline production remains stable and above the company's breakeven, providing a solid foundation for this expansion. While the timeline for realizing the full revenue potential is not clearly defined, the low acquisition cost and the company's operational experience in the region suggest this is a positive strategic move.