Georgia

SEP owns economic interests in 3 Production Sharing Contracts/Agreements in the Republic of Georgia.

These interests are held via royalty holdings in Ninotsminda Oil Company Limited, Martkopi Oil Company Limited and Nazvrevi Oil Company Limited, which are the contractor parties for the Ninotsminda, Manavi and West Rustavi PSC, the Norio (Block XIc), and North Kumisi PSA and the Nazvrevi and Block XIII PSC respectively.

A farm-out arrangement with MND, part of the privately owned KKCG group was entered into in July 2012 by Blake Oil and Gas Ltd ( a wholly owned subsidiary of SEP). The arrangement provides for MND to fund a firm capital program of $65.5m plus a contingent capital program of $32.5m in return for a 50% equity interest in the contractor companies. MND holds operatorship of the joint operations.

The operations now focus on three main assets, developing the producing Ninotsminda field, appraising the cretaceous Manavi discovery and appraisal, and further exploration of the Norio block. The current planned work program is substantially funded through the farm-out arrangement with MND.