San Leon To Farm Out Baltic Basin Concession

RNS Number : 4785I

San Leon Energy PLC

03 July 2013

 



03 July 2013

San Leon Energy Plc

("San Leon" or the "Company")

San Leon To Farm Out Baltic Basin Concession

·     Wisent Oil & Gas plc ("Wisent") to fully fund a three stage vertical fracture of Rogity-1 well in Braniewo S concession (the "Concession")

·     Wisent then has the option to fully fund the drill and testing of a horizontal well to earn a 45% interest in the Concession

San Leon is pleased to announce that it has signed a binding letter of intent (an "LOI") with Wisent, under which Wisent shall carry out a three stage vertical fracture ("Vertical Fracture" or "Fracture") of San Leon's Rogity-1 well on the Braniewo S Concession (the "Concession") in the Baltic Basin, Poland.

Subject to the execution of a comprehensive farm-out agreement, Wisent will fully fund the costs of the Fracture and any subsequent testing. One fracture stage will be executed in the Cambrian Piasnica Formation targeting conventional oil and two fracture stages will be executed in the Lower Silurian section targeting shale oil. Upon obtaining regulatory consent, operations are expected to commence on 31 July 2013.

Following completion of the Fracture, Wisent will have the option to fully fund the drilling, completion and testing of a multi-staged horizontal fractured well on the Concession ("Horizontal Well" or "Well"). The Well will include a horizontal well bore of not less than 800 metres in length and a minimum number of six fracture stages. Wisent shall decide whether or not to perform the Horizontal Well by 31 October 2013, or such later date as the Parties may mutually agree. The Horizontal Well is expected to spud early February 2014.

Upon completion of the Vertical Fracture and the Horizontal Well, Wisent will earn a 45% interest in the Concession. San Leon currently holds a 100% interest in the Concession and will remain operator following the farm-out.

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 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. Wisent holds four exploration licences adjacent to the Concession, where it has drilled one vertical well and one horizontal well. Wisent plans to carry out hydraulic fracture operations on its own licences in the coming weeks before moving on to the Braniewo S Concession Concession.

Executive Chairman, Oisin Fanning commented:

"We are very much looking forward to fracking our Rogity-1 well this summer, which will be our second fracture in the Baltic Basin.  Our data indicates a more liquids-rich system on the eastern edge of the basin and Wisent agrees with this analysis. This arrangement will combine the knowledge of both parties and help unlock the shale oil potential of this area, particularly in the Silurian formation.

San Leon continues to execute work programmes in diverse plays that could add significant value to our shareholders and this LOI creates a further opportunity to prove the shale oil potential in our portfolio."

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
Alexandra Roper
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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