REG - Block Energy PLC - Farmout of licence XIQ (part of Project IV)

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RNS Number : 0052Y  Block Energy PLC  04 September 2025

4 September 2025

Block Energy plc

("Block" or the "Company")

Farmout of licence XIQ (part of Project IV)

Block Energy plc, the development and production company focused on Georgia,
is pleased to announce the conclusion of negotiations for the farmout of
licence XIQ (forming part of Project IV) to a leading international E&P
company ("Farm-in Partner"). All necessary agreements ("Transaction
Documents") have been finalised by the parties and submitted to the government
of Georgia for approval. Execution of the Transaction Documents will be
conditional, inter alia, upon their approval by the government of Georgia.

Upon approval, which is expected during Q4 2025 - Q1 2026, the Transaction
Documents will be executed by the parties and complete simultaneously, at
which point the transaction will become legally binding.

The XIQ licence is currently held by Georgia Oil and Gas Limited ("GOGL");
(68%, Operator), Georgia Oil and Gas Corporation ("GOGC"); 22% and Block
Energy (10% with an option to increase to 22%).

Under the agreement the Farm-in Partner will acquire up to a 75% working
interest in the XIQ license, following the execution of the agreed work
programme, comprising 3D seismic and three deep high-impact wells.
Additionally, It will also receive an option to move to 92.5% interest in XIQ,
in return for certain cash and royalty payments.

Highlights:

·    Successful conclusion of negotiations for the farmout of licence XIQ
which contains the exciting Martkopi Terrace prospect.

·    The Farm-in Partner is an international independent E & P company
with a successful record of exploration and development in the Eastern
European region.

·    Agreed terms of the farm-in include full funding by the Farm-in
Partner of a staged work programme of 3D seismic and up to three deep
high-impact wells on the Martkopi Terrace prospect.

·    Total mean unrisked recoverable prospective resources for XIQ licence
of 588.7 MMboe, with Martkopi Terrace mean unrisked recoverable prospective
resources at 301.7 MMboe.

·    Completion is subject, inter alia, to approval by the government of
Georgia. The Company currently expects this to take place during Q4 2025 - Q1
2026.

Commenting, Paul Haywood, Block Energy Chief Executive Officer said:

"We are pleased to have agreed terms alongside our partners for the farm out
of XIQ to a leading international E&P company.

"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.

"Whilst there can be no certainty that the transaction will complete, the
effort and progress from the XIQ partners and farminee 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.

"We look forward to concluding the farmout agreement with our new partner and
publishing full details of the transaction with our stakeholders at
completion."

Licence XIQ & Work Programme:

Licence XIQ is located immediately to the north of Block's existing XIB
contract area and contains significant prospectivity, as defined in the
independent DeGoyler MacNaughton prospective resource report (2023).

The primary target of the farm-in is the Martkopi Terrace prospect, a
structure identified on 2D and 3D seismic in close proximity (c. 10km) to the
prolific Patardzueli-Samgori field which produced c. 180 MMbbl from the same
target reservoir.

The agreed farm-in work programme includes 3D seismic acquisition and the
option to fund of up to three deep, high-impact wells, at which point the
farm-in partner will become the operator.

On completion of the work programme, the farmin partner will have the option
to move to 92.5% in the XIQ license, in return for cash payments and a royalty
to the existing parties.

Block currently holds a 10% interest in the XIQ licence, with an option to
increase this to 22%.

Project IV Background

Project IV refers to Block's exploration activities within its portfolio in
Georgia. This includes the highly prospective XIQ licence (Block 10% with an
option to increase to 22%), IX licence (Block 100%) and the XIH licence (Block
has an option to acquire 22%).

The XIH licence, which is also subject to farmout discussions, is located
immediately to the south of Block's existing XIB licence and covers an area of
486 km(2). Seven structures have been identified within the XIH licence and
DeGoyler MacNaughton (2023) ascribe a total of 485.7 MMboe of mean unrisked
recoverable prospective resources.

A further notification will be made once the licence holders have received the
government of Georgia's decision on the submission.

**ENDS**

For further information please visit http://www.blockenergy.co.uk/ or contact:

 Paul Haywood                Block Energy plc                 Tel: +44 (0)20 3468 9891

 (Chief Executive Officer)
 Neil Baldwin                Spark Advisory Partners Limited  Tel: +44 (0)20 3368 3554

 James Keeshan

 (Nominated Adviser)
 Peter Krens                 Tennyson Securities              Tel: +44 (0)20 7186 9030

 (Corporate Broker)
 Mark Antelme                Celicourt Communications         Tel: +44 (0)20 7770 6424

 Philip Dennis

 Ali AlQahtani

 (Financial PR Adviser)

 

Notes to editors

Block Energy plc is an AIM quoted independent oil and gas production and
development company with a strategic focus on unlocking the energy potential
of Georgia. With interests in seven Production Sharing Contracts in central
Georgia, covering an area of 4,256 km2, including the XIB licence which has
over 2.77TCF of 2C contingent gas resources, with an estimated Net Present
Value 10 ("NPV") of USD 1.65 billion, in the Patardzueli-Samgori, Rustavi and
Teleti fields. (Source: IER, OPC 2024 & Internal estimates).

The Company has structured its operations around a four-project strategy.
These projects, characterized by development stage, hydrocarbon type, and
reservoir, are pursued concurrently to achieve multiple objectives. This
includes increasing existing production, redeveloping fields, discovering new
oil and gas deposits, and capitalizing on the substantial, yet untapped, gas
resource across its licences. The goal is to deliver on multi TCF gas assets,
strategically well located for the key EU market, supported by partner funding
and cash from existing producing assets.

Located near the Georgian capital of Tbilisi, Block Energy is well-positioned
to contribute significantly to the region's energy landscape. This proximity
facilitates seamless operations and underscores our commitment to the economic
and energy development of Georgia.

Glossary

Georgia Oil and Gas Limited ("GOGL") is a privately-held exploration company
focused on Georgia

Georgia Oil and Gas Corporation ("GOGC" is the State oil company of Georgia

 

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