Commencement of Seismic Survey

RNS Number : 7994F

San Leon Energy PLC

03 May 2011

 



SAN LEON ENERGY

("San Leon" or the "Company")

Commencement of Offshore Ireland Seismic Survey

San Leon and its partners are pleased to announce they have commenced a 280 square kilometre 3D seismic survey on their North Porcupine FEL 1/04 Licence ("Licence"), offshore Ireland.

PGS Exploration UK Limited ("PGS") has been contracted to carry out the survey using the M/V Ramform Vanguard seismic vessel. The 3D seismic programme will evaluate a highly prospective structure in the Licence, namely the C1 Lead, in preparation for a planned 2012 drilling programme. A best case in place resource of 1097 million barrels (MMBO) has been calculated for the C1 lead.

San Leon, through a wholly owned subsidiary, currently holds a 41.5% interest in the block and is the operator. Valhalla Oil and Gas Limited ("Valhalla") holds 38.5% and Supernova Ireland Resources B.V. ("Supernova") holds 20%. Through a farm-in agreement with Valhalla, San Leon has agreed to pay 80% of the seismic programme costs, rather than its 41.5% working interest requirement. In exchange, San Leon will gain a further 32.5% working interest in the licence from Valhalla. Following the survey and government regulatory approval, San Leon will hold 74%, Supernova will hold 20% and Valhalla will hold 6%.

As detailed on 18 September 2009, San Leon has a seismic services agreement with PGS Ventures AS, who is providing a $50m facility for seismic services.

Oisín Fanning, Executive Chairman of San Leon Energy, commented:

"We are delighted that we have been able to mobilise a vessel for this survey so quickly after the completion of the 840 square kilometre survey offshore Albania three weeks ago. This is a testament to San Leon's ability to capitalise on opportunities when they arise.

The farm-in agreement with Valhalla allows us to move this asset forward and seek new farm-in partners for the drilling of a well. The Porcupine Connemara Oil field already offers a future development opportunity within the Licence and we expect the C1 Lead to at least compliment Connemara. We believe the Atlantic margin offshore Ireland is underexplored and is in the same position as the North Sea was 40 years ago. This 3D programme will allow us to map a very exciting one billion barrel oil target."

North Porcupine FEL 1/04 Licence, offshore Ireland.

The Porcupine Basin C1 Lead is located in Licence FEL 1/04 in the northern main Porcupine Basin and targets a mapped turbidite fan pinchout, considered to be analogous to the Buzzard Field in the Morray Firth Basin offshore United Kingdom. Mounded depositional forms are clearly visible on 2D seismic above the base Cretaceous unconformity. Thick Lower Cretaceous shales overlie the unconformity in wells located updip to the pinchout.

The hydrocarbon system at Lower Cretaceous level is proven by the Burren oil discovery to the south and the capacity of Upper Jurassic source rocks to generate large volumes of hydrocarbons is established by the adjacent full to spill Upper Jurassic Connemara Oil Field. A best case in place resource of 1097 million barrels has been calculated for the C1 lead. The C1 Lead represents an untested play type in the Porcupine Basin.

Licence FEL 1/04 also encompasses the discovered Connemara Field and the H Prospect. A pilot development programme has been outlined for the Connemara Field, targeting mid case in place resources of 67 MMBO, out of total field mid case in place resources of 151 MMBO.

The H Prospect consists of a tilted fault block located adjacent to the Connemara Field. The full to spill H Prospect OIIP calculation for the mapped Oxfordian reservoir, which is also the main reservoir at Connemara, is 913 MMBO.

Discoveries at C1 and H could benefit from the existing discovered hydrocarbons at Connemara.

03 May 2011

ENQUIRIES

San Leon Energy plc	Oisin Fanning, Executive Chairman	[phone]
	John Buggenhagen, Director of Exploration
Macquarie Capital (Europe) Limited		[phone]
	John Dwyer
	Paul Connolly
	Ben Colegrave
Fox-Davies Capital Limited		[phone]
	Phil Davies
	David Porter
Arbuthnot Securities Limited	Nominated Adviser	[phone]
	Nick Tulloch
	Ben Wells
College Hill	Investment Relations Adviser	[phone]
	Nick Elwes

Qualified person

John Buggenhagen has over 15 years experience in the oil & gas industry. He has a Ph.D. and M.Sc. in Geophysics from the University of Wyoming and a B.Sc. in Geophysics from the University of Arizona. He is currently the Director of Exploration for the San Leon Energy

Group and based in San Leon's Warsaw office in Poland.

 

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