AIM-quoted independent Block Energy has struck a conditional agreement to invest in the Ndjila and Mpari production sharing contracts offshore Gabon, marking the company’s first foray into the West African country and a significant geographic expansion of its portfolio. The investment will be funded through a proposed equity fundraising of $6.3 million, to be completed in two tranches.
The two contiguous offshore licences, located in the mature North Gabon basin, cover 5,331 square kilometres and contain four historical oil discoveries drilled by former operators including Texaco, Shell, and Tullow. The Iguega field serves as the portfolio’s anchor asset, with Shell previously developing a concept plan and its discovery well testing at rates of 3,300 barrels of oil per day. Three further discoveries — Ekouata, Topaz, and Pilote — will be assessed for potential follow-on development.
Under the terms of the deal, Block Energy will provide a convertible loan of up to $6 million to Pilgrim Exploration, which holds a 90 percent interest in both PSCs. Block has the option to convert the loan into an 85 percent interest in Pilgrim or in the PSCs directly, which would translate to a 76.5 percent economic interest in the licences, with Pilgrim retaining 13.5 percent and the State of Gabon holding 10 percent. Block will also make available up to $4 million in non-cash support — staff and resources — to Pilgrim, while Pilgrim remains the operator with technical backing from Block.
The approved initial work programme includes subsurface interpretation and data integration, refinement of the Iguega development concept, evaluation of the three other discoveries, licence-wide mapping including pre-salt horizons, prospect ranking, and preparation of assets for development finance. A modern 3D seismic survey acquired across the licences in 2017 is expected to materially support this work.
Block Energy Chief Executive Paul Haywood described the transaction as a value-accretive acquisition combining discovered oil with high-potential exploration in an established oil-producing jurisdiction. He noted that recent investments by Exxon, BP, and Trafigura in Gabon provide confidence in the country’s subsurface and surface credentials, and that the deal complements the company’s existing Georgia portfolio with jurisdictional and geological diversification.
Source: offshore-energy.biz