Operational Update

RNS Number : 7727D

San Leon Energy PLC

29 March 2011

 



29 March 2011

SAN LEON ENERGY

("San Leon" or the "Company")

Operational Update

San Leon Energy Plc ("San Leon" or the "Company"), the AIM listed company focused on oil and gas exploration in Europe and North Africa, is pleased to provide the following operational update on its portfolio of assets.

Poland - Exploration programmecontinues as planned

·      The acquisition of 60 sqkm of 3D seismic data over Szczecinek Block 106 (San Leon 50%) was completed by the end of January 2011.  Data processing was concluded on 15 March 2011 and interpretation is now expected to be completed by early June 2011; with an exploration well planned for Q3 2011.

·      The seismic company, Geofizyka Krakow, is currently acquiring 480 km of 2D seismic data over San Leon's Gdansk W Concession in the Baltic Basin. The programme is expected to be finalized by mid April 2011. Geofizyka Krakow will deploy a second seismic crew for the Braniewo and Szczawno Concessions at the end of March 2011.  The entire seismic programme is expected to be completed by June 2011.  Seismic processing is being carried out in real-time to select final drilling locations for the upcoming three well drilling programme. The full 480 km 2D seismic programme is 50% complete and a drilling rig has been booked for 1 August 2011, which will be used to drill three back-to-back wells.

·      Geofizyka Krakow has also been contracted to acquire 100 km of 2D seismic over the Company's 100% owned Nida Concession, which is on trend with some of Poland's largest oil fields. The acquisition of this seismic is planned to commence at the end of March before drilling locations are finalised for an upcoming drilling programme. Up to three wells will be drilled, with an expected start date by end of June 2011.

·      San Leon has awarded Hungarian company, Acoustic Geophysical, with the contract to acquire 165 sqkm of 3D seismic data over the Company's Nowa Sol Concession.  The 3D seismic programme, which is expected to commence in May 2011, is targeting numerous prospects and leads along the southern Fore Sudetic Monocline of the Permian Basin.  This survey is designed to support an upcoming drilling campaign in the Nowa Sol Concession which is currently planned to start in Q4 2011.

·      Work is continuing in the Carboniferous shale play across the Wschowa, Gora, Winsko and Rawicz Concessions, which cover 880,000 acres.  Core analysis and interpretation of historical seismic data is being carried out. The seismic programme across this acreage is scheduled to commence in Q3 2011.

·      Lars Huberthas been appointed as Exploration Manager for San Leon Poland in Warsaw. Lars has 16 years of experience in the oil and gas industry.  He joined San Leon Energy from Houston, where he used leading high-end geophysical technology (inversion, AVO, and neural network analysis), combined with structural interpretation and sequence stratigraphic analysis to explore for large, high yield prospects in Texas and Louisiana.  Lars also has European, North African and Middle Eastern experience.  He has previously held technical positions within Exxon, Halliburton and Schlumberger.

Morocco

·      The Tarfaya Oil Shale pilot project is well advanced. The drilling of two wells (one injector and one producer) began last week and first results are expected towards the end of next month.

·      San Leon is also preparing for its upcoming 1,000 km 2D seismic programme in the Tarfaya and ZagLicences, onshore Morocco. The seismic programme is scheduled to commence in late Q2 2011.

·      Full re-interpretation of the seismic data on the offshore Foum Draa and Sidi Moussalicencesis near completion. Once this is successful, the Company is likely to seek farm-in partners for drilling.

Ireland

·      Following the Company's acquisition of Island Oil & Gas plc, San Leon continues to appraise its high impact Atlantic Margin assets and is seeking farm-in partners.  To date, seven parties have signed Confidentiality Agreements to review the data.

·      North Porcupine (FEL 1/04)- The company is planning a new 3D seismic programme in the licence for Q3 2011.

·      Slyne Licence (FEL 4/06) - Initial interpretation of some fast track seismic lines from our Q3 2010 300 sqkm 3D seismic programme has begun. Final processing of the 3D is expected by the end of March 2011 with full interpretation expected by early June 2011.

·      Rockall Licence (FEL 3/05)- OMV has assigned its 50% interest to San Leon Energy and paid San Leon £3 million.  San Leon now has a 100% working interest in the licence and is seeking farm-in partners.

·      The company is also seeking a farm-in partner for the South Porcupine Licence (FEL 3/08).

·      Polarcus has been contracted to acquire a 3D programme over the Barryroe Licensing Option (08/01) in June this year.  The survey is being acquired to further delineate the Barryroe oil discovery which was last drilled in 1990 and flowed at over 1,600 barrels of oil per day.

Albania

·      San Leon received Council of Ministers' approval for the offshore Durresi Block Complimentary Petroleum Agreement on January 28 2011.

·      San Leon and its partner, Beach Energy Limited, have now commenced an 840 sqkm 3D seismic survey.  The survey is being carried out by PGS and is expected to be completed by the end of April 2011.

·      The 3D seismic programme will evaluate a number of highly prospective structures in the Block, including the A4-1X discovery, in preparation for a planned 2012 exploration and appraisal drilling programme.

Iraq

·      San Leon, and its Joint Venture Partner in Iraq Al Meinaa Oil Services Company, have also signed a Joint Participation Agreement, last week, with the Governorate Council of Karbala in Central Iraq.

·      Under this Agreement the consortium (San Leon, Al-Meinaa and the Governorate Council of Karbala) will submit a joint proposal to the Ministry of Oil in Iraq for the development of the fields of Kifil, West Kifil and Merjan.

Netherlands

·      The Amstel Field, offshore Netherlands, in which San Leon has a 2.5% royalty, is currently being drilled by new 50% owner GDF SUEZ E&P Nederland B.V..

SeisQuest

·      San Leon is establishing a seismic acquisition company using wireless technology from OyoGeospace (USA) and vibrators from Sercel (France).

·      This crew has already been engaged to conduct the Tarfaya and Zag seismic programmes in Morocco.

·      The Company intends to train Polish nationals on this new technology and employ the new crew on San Leon's future seismic programmes, which will further accelerate the Company's exploration programmes. Currently two seismic companies operate in Poland and both are owned by Poland's PGNiG group.

Oisin Fanning Chairman of San Leon Energy commented:

"San Leon has made significant progress over the last few months and is now entering one of the most active and important periods in the Company's history.  Ten  wells are being drilled before the end of this year, some of which have the potential to be company makers, including the first wells on our Baltic basin acreage with our partner Talisman.  Combined with this we have also recently acquired or are about to acquire approximately 3,000 kms of seismic, which will enable us to firm up a number of prospects and potential drilling sites. 

We have built an incredibly exciting portfolio of assets.  We also have an exceptional team of individuals who know these assets and regions and, following our fundraising last year, the funds in place to be able to carry out this extensive work programme.  I look forward to providing further updates as our programme progresses."

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.

 

END

 

 

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