Shale explorer San Leon signs farm-out deal; shares rise
July 3 | Wed Jul 3, 2013 4:34am EDT reuters.com (Reuters) - Poland-focused shale explorer San Leon Energy Plc said it would farm out its oilfield in the Baltic basin in Poland to privately owned Wisent Oil and Gas, sending its shares up by as much as 18.5 percent.
The company said it signed a letter of intent with Wisent Oil and Gas to fund a three-stage vertical fracture of Rogity-1 well in Braniewo S concession in the Baltic basin.
San Leon said Wisent would have the option to fully fund the drill and testing of a horizontal well to earn a 45 percent interest in the concession. San Leon would remain the operator following the farm out.
"Its a major step for the company to get a farm-in partner but the commercialisation of shale production in northern Poland is still in early days," Macquarie Research analyst Mark Wilson told Reuters.
Shares in the company were up 14.5 percent at 5.75 pence at 0833 GMT on Wednesday on the London Stock Exchange. (Reporting by Tasim Zahid in Bangalore; Editing by Supriya Kurane)
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San Leon To Farm Out Baltic Basin Concession
03 July 2013 sanleonenergy.com
...Subject to the execution of a comprehensive farm-out agreement, Wisent will fully fund the costs of the Fracture and any subsequent testing. One fracture stage will be executed in the Cambrian Piasnica Formation targeting conventional oil and two fracture stages will be executed in the Lower Silurian section targeting shale oil. Upon obtaining regulatory consent, operations are expected to commence on 31 July 2013. Following completion of the Fracture, Wisent will have the option to fully fund the drilling, completion and testing of a multi-staged horizontal fractured well on the Concession (“Horizontal Well” or “Well”). The Well will include a horizontal well bore of not less than 800 metres in length and a minimum number of six fracture stages. Wisent shall decide whether or not to perform the Horizontal Well by 31 October 2013, or such later date as the Parties may mutually agree. The Horizontal Well is expected to spud early February 2014.
Upon completion of the Vertical Fracture and the Horizontal Well, Wisent will earn a 45% interest in the Concession. San Leon currently holds a 100% interest in the Concession and will remain operator following the farm-out.
The Rogity-1 well, which was drilled to a depth of 2,788 meters, encountered continuous gas shows with liquid hydrocarbons over more than 500 meters of the Lower Silurian, Ordovician, and Middle Cambrian sections. The richness of the gas shows is consistent with a wet gas system, confirming the Company's regional model of the eastern side of the basin being in the oil window.
Wisent is focussed on the shale oil potential in Poland’s Baltic Basin. Wisent holds four exploration licences adjacent to the Concession, where it has drilled one vertical well and one horizontal well. Wisent plans to carry out hydraulic fracture operations on its own licences in the coming weeks before moving on to the Braniewo S Concession Concession.
Executive Chairman, Oisin Fanning commented:
“We are very much looking forward to fracking our Rogity-1 well this summer, which will be our second fracture in the Baltic Basin. Our data indicates a more liquids-rich system on the eastern edge of the basin and Wisent agrees with this analysis. This arrangement will combine the knowledge of both parties and help unlock the shale oil potential of this area, particularly in the Silurian formation...
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Successful Fracture of Lewino-1G2 in Gdansk W Concession
03 July 2013 sanleonenergy.com
- Hydraulic Fracture successfully completed
..United Oilfield Services (“UOS”) carried out the operation yesterday and attained an average main treatment pump rate of 120 barrels per minute at pressure, which is the highest achieved outside North America. The pumping lasted less than three hours.
The fracture was completed on schedule and the well will now have tubing installed, in preparation for clean-up and testing.
San Leon will update the market with test results as soon as they are available.,, |
