Block Energy (LON: BLOE) has published an independent report covering the gas resource within Licence B in the Republic of Georgia. This shows headline recoverable 2C gas resources of 1,072bcf, which is slightly larger than the company’s own estimate and this can help the gas producer to farm-out the acreage.
Oilfield Production Consultants was commissioned to prepare an independent engineering report covering the development of the gas resource at the Patardzueli-Samgori fields. It calculates an unrisked NPV of $501m in the mid-case (the range is $227m-$745m). At 1.05p, up 7.69%, Block Energy is capitalised at £7.1m.
The farm out process should begin shortly, and the opportunity could be attractive to some large oil and gas companies. Block Energy believes that the gas prospect extends into its neighbouring licences.
Tennyson Securities reckons that a Chinese company could be the front runner for the farm out, because of the agreements between the Georgian and Chinese governments.
