Strategic Relationship with Halliburton

RNS Number : 1843A

San Leon Energy PLC

18 March 2013

 

18 March 2013

San Leon Energy Plc
("San Leon" or the "Company")

 
Strategic Relationship with Halliburton to Prove the Unconventional Gas Potential of the SW Carboniferous Basin in Poland

San Leon Energy has signed a Memorandum of Understanding ("MOU") with Halliburton Company Germany GmBH Sp. Z.o.o. ("Halliburton") to develop a strategic relationship to jointly explore and develop the Carboniferous unconventional gas potential in San Leon's Wschowa, Gora, and Rawicz Concessions ("the Concessions") in Poland.  San Leon will continue to serve as operator and manage the operations on the Concessions.  All activities covered under this relationship will be limited to the Carboniferous and deeper sections.  For clarity, the shallower Permian Rotliegendes and Main Dolomite sections are excluded from this relationship.

Under the MOU, it is anticipated that Halliburton will perform and fund a Diagnostic Fracture Injection Test ("DFIT") for the Siciny-2 well in Q2 2013.  Upon completion of the DFIT, Halliburton will have the option to perform and fund a minimum two-stage vertical hydraulic fracture in the Siciny-2 well with San Leon paying 50% of the wholesale proppant (fracturing fluid) cost to Halliburton.  This procedure is also planned for Q2 2013.  San Leon will fund other third party costs on the well-site, such as security and waste disposal, in connection with the DFIT and fracture. 

Subject to the execution of a further binding agreement, completion of the DFIT and hydraulic fracturing phase shall give Halliburton the option to earn up to a 25% working interest in the Carboniferous and deeper sections within the Concessions by fully funding two vertical exploration wells, including full technical evaluation with core, DFIT, and vertical hydraulic fracturing if technically warranted. Halliburton will have 120 days following the hydraulic fracture on the Siciny-2 well to elect to drill the first exploration well to earn a 12.5% interest; and 120 days following the hydraulic facture on the first earning well to elect to drill the second earning well to earn an additional 12.5% interest, making a total of 25%.

Based upon the initial results of the Siciny-2 well drilled by San Leon in 2012, which encountered over 250m of gas saturated tight gas sands with over 200 BFC of gas per square mile, and vintage data, the Company estimates the net Prospect Resource potential of the Carboniferous play on its concession in Poland to be over 60 TCF of recoverable gas.

Executive Chairman, Oisin Fanning commented:

"We are very excited about our evolving relationship with Halliburton which will help us prove the huge resource potential of the Carboniferous unconventional gas play across our vast acreage position in the SW Carboniferous Basin in Poland.  This relationship is further proof of our strategy of creating value through strong technical effort followed by the drill bit.  Halliburton brings the expertise and capabilities to prove the potential of the Carboniferous and quickly take the project from exploration to development."

For further information contact:

San Leon Energy Plc	Tel: [phone]
Oisin Fanning, Executive Chairman
John Buggenhagen, Exploration Director
Macquarie Capital (Europe) Limited	Tel: [phone]
John Dwyer
Fox Davies Capital	Tel: [phone]
Daniel Fox-Davies
Richard Hail
FirstEnergy Capital LLP	Tel: [phone]
Hugh R. Sanderson
David Van Erp
Westhouse Securities (Nominated Advisor) Richard Johnson	Tel: [phone]
Antonio Bossi
College Hill Associates	Tel: [phone]
David Simonson
Rupert Trefgarne
Alexandra Roper

www.sanleonenergy.com

Qualified person

John Buggenhagen, who has reviewed this update, 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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