More companies abandon Polish shale concessions

Exploration rig
Source: DollarPhotoClub

3Legs Resources decided to join other energy companies in leaving Poland, quoting poor results in its three shale gas concessions in northern Poland. Meanwhile, Polish company Petrolinvest has been refused an extension on exploration licences on two concessions, while the refusal of extension on a further three concessions is currently being appealed.

This year, 3Legs Resources has performed hydraulic fracturing on directional wellbores and carried out flow test in two exploratory wells in Sławoszyn and Lublewo. Between 8th August and 17th September, the Lublewo well produced around 11 thousand cubic meters of gas and 157 barrels of light crude per day. These results, however, did not meet the company’s expectations in terms of cost-effectiveness. What is more, on the basis of currently available information the company is not convinced that the flow rates from the wellbore could increase to a level that is deemed commercially viable.

“The well is producing higher amounts of oil than anticipated, whereas natural gas production is lower than had been hoped,” 3Legs said.

As a result, the company has decided to give up the three concessions in the western part of the Baltic Basin. The thirty per cent shares that 3Legs Resources holds in these concessions will be transferred to ConocoPhillips.

The company is also looking for takers for its three concessions east of Gdansk. If no interested parties are found, 3Legs Resources will return the concessions to the Polish Ministry of Environment.

It is not only foreign companies that experience problems exploring Polish shale. Petrolinvest, which at one time held the highest number of concessions in Poland, is now left holding only three concessions. Last month the Ministry of Environment refused an extension on exploration licences on two of Petrolinvest’s concessions, having decided that the company was unable to secure financing for the planned shale gas operations. Both concessions have returned to the Ministry of Environment and will be available for lease in the next tender.

Silurian LTD, in which Petrolinvest holds a 91.7 per cent stake, also applied for an extension on three more concessions in Głubczyce, Kędzierzyn-Koźle and Opole. The application was submitted after the set deadline and consequently the Ministry issued a decision not to initiate proceedings. The case, however, has not yet been concluded as Silurian has subsequently appealed the decision.

Petrolinvest holds another three concessions via its subsidiary Eco Energy 2010, two of which (Repki and Siemiatycze) will expire in November 2014.

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