Commencement of Rogity-1 Well Vertical Fracture

RNS Number : 9232K

San Leon Energy PLC

05 August 2013

 



5 August 2013

San Leon Energy Plc

("San Leon" or the "Company")

Commencement of Rogity-1 Well Vertical Fracture

San Leon is pleased to announce that United Oilfield Services ("UOS") yesterday completed its first vertical fracture stage in the Rogity-1 well on the Braniewo S Concession (the "Concession") in Poland's northern Baltic Basin. This first stage was performed in the oil-bearing, tight Cambrian quartzite sandstones at the bottom of the well as part of a three stage vertical hydraulic Fracture Stimulation Programme (the "Programme").  Temporary production tubing is being run to facilitate a short-term flow test and build-up test over the next four weeks to test the Cambrian.

The objective of this first fracture is to understand the frackability and production potential of the tight Cambrian sandstones.  It is anticipated that any future development would be with multi-staged fracked long offset horizontals.  San Leon has mapped a large Cambrian structure at the Rogity-1 well, which the Company is analysing as a sweet spot for oil production via natural fractures.

This is the first frack of a three stage Programme in the Rogity-1 well as part of the recently signed farm-out agreement ("FOA") with Wisent Oil & Gas plc ("Wisent"), under which Wisent will fully fund the costs of the Programme and any subsequent testing in the well.  The Programme is designed to test the prospective interval from the bottom of the well up.

The primary target of the Programme is focused on the shale oil potential of the lower Silurian.  The second and third stages, which will be performed concurrently, are designed to test the shale oil potential of the lower Silurian.  Based upon the detailed core and petrophysical analyses, the prospective interval in the lower Silurian is estimated to be up to 100 meters thick.  It is expected that the two fracks within the lower Silurian will be executed over a three day timeframe followed by approximately four weeks of flow testing and data gathering.  Timing of these fracks will be based upon completion of testing and data acquisition of the Cambrian.

Following completion of the Programme, Wisent will have the option to fully fund the drilling, completion and testing of a multi-staged, horizontal fractured well on the Concession. The well will include a horizontal section of not less than 800 metres and a minimum of six fracture stages. Under the terms of the FOA, Wisent has the option to elect to earn a 45% working interest by drilling the horizontal well by 31 January 2014, or such later date as San Leon and Wisent may mutually agree (the horizontal well has to be spudded by 01 May 2014).  Wisent has the option, subject to the conditions of the FOA, to become operator of the Concession.

San Leon currently holds a 100% interest in the Concession.

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/oil bearing 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 holding four exploration concessions adjacent to the Concession, where it has drilled one vertical well and one horizontal well to test the potential of the lower Silurian and Cambrian.

Executive Chairman, Oisin Fanning commented:

"We are excited to have executed the FOA with Wisent and look forward to working with them on the proving the liquids potential of the lower Silurian in Braniewo S concession. The primary target for this vertical fracture stimulation programme is the lower Silurian shale oil potential which has huge upside reserve potential across the eastern Baltic Basin.   The secondary target in the deeper Cambrian for tight oil brings further upside to the Basin.  This fracture programme is our second test of the Lower Paleozoic in the Baltic Basin this year following the fracture of Lewino 1G2 in our Gdansk W Concession at the beginning of July.

We look forward to updating the market with results from both wells as results become available"

Wes Skrobowski, Chief Executive of Wisent, said:

"Wisent is delighted to be working with San Leon on the Braniewo S concession. We completed our first hydraulic fracture successfully in our Babiak horizontal well last week and this follow-up frack in the neighbouring Braniewo S Concession will help to unlock the regional potential in the area".

For further information contact:

San Leon Energy Plc	Tel: [phone]
Oisin Fanning, Executive Chairman
Macquarie Capital (Europe) Limited	Tel: [phone]
John Dwyer
Fox Davies Capital	Tel: [phone]
Daniel Fox-Davies
Richard Hail / Susan Walker
FirstEnergy Capital LLP	Tel: [phone]
Hugh R. Sanderson
David van Erp
Westhouse Securities (Nominated Advisor)	Tel: [phone]
Richard Johnson
Antonio Bossi
College Hill Associates	Tel: [phone]
David Simonson	Or [phone]
Catherine Wickman
Plunkett Public Relations	Tel: [phone]
Sharon Plunkett
Jennie Cotter

www.sanleonenergy.com

Qualified person

Lars Hübert, who has reviewed this update, has over 17 years experience in the oil & gas industry. He holds a BS from the University of Oslo, a MS from the University of Wyoming, and a MBA from Heriot Watt University. Lars is currently the Exploration Manager for all unconventional oil  and gas for San Leon Energy and is based in San Leon's Warsaw office in Poland.

 

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