Block Energy PLC (AIM:BLOE, FRA:BE9) shares rose 27% to 1.68p after the Georgia-focused development company signed a binding framework agreement with China's Zhijiang Sanning Energy to farm out its Project III gas assets in a deal carrying up to $75 million in fully carried costs.
Under the agreement, Sanning will acquire a 51% interest in Project III, covering the Lower Eocene and deeper horizons across Block's XIB and XIF production sharing contracts, while Block retains a 49% stake and continues as operator throughout the appraisal programme.
Sanning will carry Block on an initial $13 million appraisal programme at the Patardzueli-Samgori field, with a further $12 million carry available for early gas processing facilities, subject to successful results, and an optional $50 million carry covering appraisal and production facilities at the Rustavi and Teleti fields.
Project III holds 2.77 trillion cubic feet of 2C contingent resources and carries an estimated gross success case net present value of $2.2 billion.
Block retains 100% of its remaining projects and all existing production.
Transaction documents are expected to be finalised in the second half of 2026, with operations targeted to begin in the first half of 2027.