San Leon relinquishes nine of its Polish concessions

Polish flag
Source: DollarPhotoClub

Irish oil and gas exploration company San Leon has announced that it has relinquished all or part of nine Polish concessions (totalling 680,000 net acres, or 14% of the previous Polish total). The company continues exploration in the Polish regions of the Karpaty, the Permian basin, and in the Gdansk W shale gas concession.

Karpaty and Permian Basin

San Leon intends to drill two exploration wells in the Karpaty area and one exploration well in the Permian Basin in Poland during a single campaign using a rig from Exalo, beginning in mid-September. All wells are relatively shallow and are in a proven hydrocarbon trend area. All three wells are expected to be completed before the end of the year:-

  • Kęty, on the Bestwina concession in Karpaty, targeting gas in Miocene sandstone with a 4 Bcf mid-case recoverable target. 60% San Leon Energy (Operator), 40% PGNiG.
  • Gierałtowice on the Bielsko-Biała concession in Karpaty, targeting gas in the Upper Carboniferous sandstone primary target and Lower Carboniferous limestone secondary target with a 4 Bcf mid-case recoverable target. 60% San Leon Energy (Operator), 40% PGNiG.
  • Niwiska, on Block 243 in the Permian Basin, targeting oil, in the naturally-fractured Main Dolomite, with a 400,000 bbl mid-case recoverable target plus some gas. San Leon Energy will operate the well, and this drilling will fulfill the final stage of its farm-in, leaving the equity split 50% San Leon Energy and 50% Celtique Energy.

Lewino well

The planned Lewino horizontal well in the Gdansk W shale gas concession is in advanced engineering planning. Finalisation of the well and frac design, and a decision to drill, will be taken following analysis of results from the nearby ConocoPhilips/3Legs and BNK wells.

All operators in Poland share well results and detailed drilling information to expedite the development of the region’s shale resource. We have seen very recent heightened interest in farming in to the concession.

JV with Palomar Natural Resources

In July this year, San Leon announced that it has signed a joint venture agreement with Palomar Natural Resources across seven Concessions in Poland’s Permian Basin. The JV was initially focused on developing the discovered, unproduced Siekierki and Rawicz gas fields.

In return for a 65% working interest in the Southern Permian Basin and Northern Permian Basin Concessions, Palomar has paid upfront to San Leon $5 million and $15 million, respectively, in cash. The company will carry out for San Leon a defined initial work programme aimed at bringing the Rawicz and Siekierki fields into production as soon as possible. Palomar will become the operator of all of the Concessions.

The Joint Venture is divided into two core areas across seven exploration concessions including:

  • the Rawicz (39/2009/p), Wschowa (8/2009/p), Gora (30/2008/p) and Nowa Sol (5/2009/p) concessions (“Southern Permian Basin”); and
  • the Poznan North (26/2008/p), Poznan East (4/2003/p), Poznan East (5/2003/p) concessions (“Northern Permian Basin”).

Palomar has announced that it plans to spud a well on Rawicz in Q4 2014 and is actively working up plans for the other areas of the joint venture.

Divesting of assets

Apart from relinquishing some of its Polish assets and following technical work to appraise all licences as part of its asset management strategy, San Leon has:

  • Relinquished its licence in Germany
  • Made a decision to relinquish its assets in Italy
  • Sold its Slovakian subsidiary, Aurelian Oil & Gas Slovakia (“AOGS”) s.r.o to Discovery Polska LLP, a private Texas based company.
  • Relinquished its Tarfaya oil shale licence, onshore Morocco, as the Timahdit oil shale licence is of significantly higher quality

Oisin Fanning, San Leon Executive Chairman, commented:
“The Company continues to farm out assets and drill wells to progress towards production and cash flow. Palomar are moving quickly with a programme for developing the Rawicz field and planning activity on other areas of the joint venture, and the three-well drilling campaign in Karpaty and the Permian Basin is part of our strategy to target early production.”

“Planning is also currently underway for our next Gdansk West well at Lewino, initial results of the Conoco/3Legs and BNK horizontal wells appear positive and further results are expected soon.”

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