Block Energy has entered into a conditional agreement with Pilgrim Exploration for an investment linked to offshore production sharing contracts in Gabon, alongside plans to raise $6.3 million through an equity offering.
The transaction relates to the Ndjila and Mpari production sharing contracts, covering offshore licenses in the North Gabon basin.
Block said the fundraising will be conducted through a placing via accelerated bookbuild and a retail offer, with proceeds intended to fund a $6 million investment in Pilgrim through a secured convertible loan.
The licenses cover an area of 5,331 sq km and include four historical oil discoveries, with further exploration potential in pre- and post-salt formations.
“This transaction represents an excellent value-accretive acquisition of discovered oil and high-potential exploration in a well-known oil producing jurisdiction. With an excellent data set and highly encouraging drilling activity by former operators we believe that the assets combine an anchor development opportunity with significant upside and broad running room.
“With recent farm-in progress on both Project III and Project IV in Georgia, we believe that the Gabon Transaction provides jurisdictional and geological diversification as well as genuine near-term growth potential for the portfolio and I look forward to updating shareholders on the progress of the technical work programme in due course.
“We have been encouraged by the support of the Gabonese authorities for international investment in the hydrocarbon sector and look forward to working with our partners, Pilgrim and the State of Gabon, on the development of the Ndjila and Mpari PSCs,” said Paul Haywood, Chief Executive of Block Energy.
Under the proposed structure, Pilgrim will remain operator of the licenses, while Block will provide technical support and may convert the loan into an interest equating to 76.5% in the contracts, subject to regulatory approvals.
The companies said an initial work program will include subsurface analysis, development planning and evaluation of existing discoveries.