Oil and gas exploration firm Block Energy has reached a sale and purchase agreement for a Schlumberger subsidiary.

The oilfield services giant owns Schlumberger Rustaveli Company Limited (SRCL), which in turn holds three production sharing contracts (PSCs). Of these, Block Energy will buy Block XIB and Block IX licenses in Georgia. These areas are currently in the production and exploration phases respectively.

At the same time, the company will relinquish the third contract, in Block X.

Schlumberger will receive the right to acquire 120 million 0.25p shares; 23.3% of Block Energy’s enlarged ordinary share capital.

With an area of 1,925km², exploration Block IX has 38 legacy wells, with two wells drilled in 2013.

Located in the Kura Basin, the 615km² Block XIB has produced more than 180 million barrels of oil.

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By GlobalData

Block Energy CEO Paul Haywood said: “We are extremely pleased to announce the acquisition of the PSCs for Block IX and Block XB in Georgia from Schlumberger.  The acquisition is transformational for Block Energy, providing the company scale and increased production, reserves and resources.

“A critical component of this transaction is that it will be completed with no cash consideration, using options on our own share capital. The acquisition demonstrates management’s ability to identify, compete for and secure the right deals for its shareholders in an environment posing unprecedented challenges for the industry.”

The acquisition is, however, subject to receiving regulatory approvals in Georgia and the UK.

Last month, Schlumberger announced a partnership with the Egyptian Ministry of Petroleum for the Egypt Upstream Gateway (EUG) project to help digitise subsurface information.

Also in February, the company announced a new manufacturing centre in the King Salman Energy Park (SPARK) in Saudi Arabia.