UK’s Block Energy Expands Into Gabon Offshore With PSC Acquisition Deal

UK-listed Block Energy is positioning itself for entry into Gabon’s offshore upstream sector after signing a conditional agreement with Pilgrim Exploration Limited covering two offshore production sharing contracts (PSCs).

The transaction relates to the Ndjila (G4-269) and Mpari (G4-270) offshore blocks, situated in Gabonese waters and spanning a combined area of roughly 5,331 square kilometres. The acreage includes four previously identified oil discoveries, notably the Iguega field, where historical production tests reportedly achieved flow rates of up to 3,300 barrels per day.

According to Pilgrim Exploration, the licences are supported by an extensive archive of subsurface and seismic data, which could reduce exploration lead times and improve development planning should the acquisition proceed.

Under the proposed structure, Block Energy will provide Pilgrim with a convertible loan facility. Pilgrim currently controls a 90% stake in the PSCs through affiliated subsidiaries, and conversion of the facility — subject to approval from Gabonese authorities — would leave Block Energy with an indirect economic interest of 76.5% in the offshore assets.

To support the transaction, Block Energy intends to raise approximately US$6.3 million through a two-phase capital raise involving a private placement and an offer to existing shareholders. Chief executive Paul Haywood described the move as a strategically attractive entry into a proven hydrocarbon province with both discovered resources and additional exploration upside.

If completed, the agreement would mark Block Energy’s first operational foothold in Africa and a significant geographic expansion beyond its existing portfolio in Georgia, which currently accounts for virtually all company revenues.

The company remains a relatively small independent operator, with annual revenues of just over US$7 million and a market capitalisation of approximately US$16 million. As a result, the proposed Gabon entry represents a measured but potentially transformative step into offshore exploration, a segment associated with substantially higher capital intensity and technical risk.

The development also reflects renewed industry interest in Gabon’s offshore sector, where mature production has declined over the past two decades, but sizeable undeveloped acreage remains available. National crude output averaged around 230,000 barrels per day in 2024, according to Gabon’s Ministry of Petroleum and Gas.

Speaking during Africa Energy Week 2025 in Cape Town, Petroleum Minister Mays Mouissi Nguema said only 27.5% of Gabon’s petroleum acreage is currently under active development, underlining the country’s remaining exploration potential as operators revisit West African offshore opportunities.