Momentum Gathers In E&A Ventures
Exploration and appraisal in Georgia continues to gain momentum, with the latest joint venture (JV) between Blake Oil & Gas (UK) and MND Group (Czech Republic) highlighting growing interest amongst independents in the underexplored acreage.
While aspects of the business environment in Georgia remain onerous (as our Risk/Reward Ratings suggest), the government's willingness to attract expertise and capital to develop its oil and gas sector - and break its reliance on imports - has prompted the establishment of a clear regulatory and legal energy framework and has greatly reduced above-ground risks. This has drawn in a plethora of independents over recent years. MND Group joins Frontera Resources and Range Resources (among others) in exploring in Georgia. As E&A activity increases and prospectivity is assessed we anticipate interest in Georgia to grow.
Under the terms of the JV, MND Group will acquire a 50% equity in Blake's three subsidiaries ( see table below) that own and operate the production sharing contracts (PSCs), for nearly US$100mn. Blake will retain operatorship of the PSCs. This will allow MND Group to realise its aspiration of becoming a CEE-focused E&P company (and could also catalyse the divestment of its assets in Pakistan and Yemen).
|Lagging Behind Its Peers|
|BMI's Risk/Reward Ratings, Scores out of 100|