Block Energy (BLOE), the exploration and production company focused on the Republic of Georgia, signed a memorandum of understanding for a proposed offtake of its 25% owned West Rustavi permit.
The agreement is with Bago Ltd, one of the largest private gas suppliers and purchasers in Georgia, who have agreed to purchase a minimum of 1000 cubic meters of gas per day from West Rustavi.
The company's West Rustavi permit, contains proven reserves and gross contingent resources of 608 Billion Cubic Feet ("BCF") gas and 37.9MMBbls of oil.
Shares in Block Energy are up 5% at 3.1p each on the day of the announcement.
Paul Haywood, Director of Block Energy, said: “I am highly encouraged by progress we have made towards securing a final offtake agreement with Bago, one of Georgia's largest domestic private gas traders with extensive infrastructure capable of handling large volumes of gas.”
He continued: “West Rustavi offers huge value potential for Block and with rig contracts now in place, we are all set to commence work programmes to unlock this potential and upgrade resources to proven reserves.”
Multiple gas discoveries have already been made within the license and the company announced it will be updating the market when the final offtake agreement is put in place.
Georgia is a low-cost, business-friendly country, which has proven but underdeveloped oil and gas reserves, providing an excellent opportunity for companies to gain a first mover advantage in the region.
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