TIDM3LEG
RNS Number : 1597S
3Legs Resources plc
16 November 2011
16 November 2011
3Legs Resources plc
Operations on Warblino LE-1H2 horizontal well
3Legs Resources plc (the "Company"), a company focussed on the
exploration and development of unconventional oil and gas resources
with a particular focus on shale gas in Europe,announces the
following operational update.
Key points
-- The Warblino LE-1H2 horizontal well flowed at an initial rate
of 60 to 90 mscfd of natural gas and over 1,000 bpd of fracture
fluid, declining after five days of testing to approximately 18
mscfd of natural gas and 300 bpd of fracture fluid, when the well
was shut-in
-- Testing equipment has been released; further production
testing proposed for spring 2012, when weather conditions are more
favourable
-- The Company considers that the well could benefit from being
shut in for an extended period of several months to recover from
the fracture stimulation and to enable the fracture treatment
fluid, potentially obstructing the flow of natural gas, to
dissipate
-- Extensive coring, wireline logging, production and other data
have been gathered and are being analysed in order to advance
further the Company's understanding of the target formations, for
reservoir assessment and for future drilling and completion
designs; these analyses are expected to be completed in the first
quarter of 2012
Baltic Basin concessions
Following its announcement on 26 September 2011 regarding the
drilling of the Warblino LE-1 vertical pilot and LE-1H2 horizontal
wells, the initial testing phase on the Warblino LE-1H2 well has
been temporarily suspended. A seven stage hydraulic fracture
stimulation ("frac") programme was successfully executed across the
500 metre horizontal section in the deeper lower Palaeozoic shales.
This deeper zone was not included in the Competent Person's Report
issued in connection with the Company's initial public offering
earlier this year, as it had not been drilled in either of the
Company's two (vertical) wells referred to in that report.
Analysis of the deeper zone indicates total organic carbon and
porosity values which compare favourably to a number of US shale
plays. However, the zone also presents challenges for drilling and
completion (including frac design), which the Company expects to
address in future operations.
The frac at Warblino LE-1H2 used a gelled fluid, which enabled
significantly higher concentrations of sand to be delivered into
the formation than can typically be achieved with a slick water
solution as was used on the Lebien LE-2H well. Following the frac,
the well started to unload frac fluid at over 1,000 bpd, and to
flow natural gas at 60-90 mscfd. Because of the significant volumes
of frac fluid, a nitrogen injection lift was initiated early to
continue the flow. After five days of testing, approximately 21% of
the total injected frac fluid had been recovered, and the well was
continuing to produce approximately 18 mscfd of natural gas and 300
bpd of frac fluid.
The well was shut in after five days and the testing equipment
released. The Company will continue to monitor the well over the
winter period, with a view to considering further production
testing in spring 2012. The Company believes that the well could
benefit from being shut in for an extended period of several months
to recover from the fracture stimulation and to enable the fracture
fluid, potentially obstructing the flow of natural gas, to
dissipate.
As indicated in its announcement on 26 September 2011, the
Company had originally planned a longer horizontal section on the
Warblino LE-1H2 well, but opted to limit the lateral length to 500
metres due to hole stability issues. The Company believes that the
reduced length of the horizontal section will have had a
proportional impact on the well's performance, but that data gained
may enable it to overcome similar down-hole issues and to drill
longer horizontal sections in future wells targeting this zone.
The Company is continuing its detailed analysis of data gathered
from all of its wells in the Baltic Basin, including cores, logs
and tests, in order to refine and update its regional geological
model and potential drilling and completion designs. The Company
has also acquired or agreed to acquire data from other operators in
the Baltic Basin through data trades. The Company expects these
analyses to be completed in the first quarter of 2012, following
which it will determine a near-term exploration plan in conjunction
with its venture partner ConocoPhillips.
Peter Clutterbuck, Chief Executive of 3Legs Resources, said:
"We have now concluded our 2011 drilling and testing programme
for the Baltic Basin, which has achieved its objectives of
completing two wells with horizontal sections and multistage fracs.
We have demonstrated that shale gas can be flowed in both wells and
in different horizons, and we have gathered extensive amounts of
new data with which to advance further our understanding of the
production potential of the reservoir. Although flow rates have
been low, we expect to be able to further improve well
productivity, as is often the case in other shale plays in the US
at this stage of appraisal.
Our primary focus now is on developing improvements in hydraulic
fracture and completion design which will further enhance well
production rates, in addition to considering the acquisition of new
2D and 3D seismic and the drilling of a number of new wells in the
near term. This is critical in order to convert this very large gas
in place volume into commercial reserves. The benefits of
developing a domestic energy supply from a clean fuel such as
natural gas are potentially very significant, particularly in the
prevailing economic climate."
For further information contact:
3Legs Resources plc Tel: +44 1624 811 611
Peter Clutterbuck, Chief
Executive Officer
Alexander Fraser, Chief
Financial Officer
Jefferies International
Limited Tel: +44 207 029 8000
Chris Snoxall
Alex Grant
College Hill Tel: +44 207 457 2020
Nick Elwes
Catherine Maitland
Notes to Editors
3Legs Resources was established in early 2007 to focus on the
exploration and development of unconventional oil and gas
resources, with a particular focus on shale gas in Europe. A first
mover in Poland, 3Legs Resources has acquired six licences covering
approximately 1,084,000 acres (gross) in the onshore Baltic Basin,
a region considered to be one of the most promising shale basins in
Europe. The Company's primary targets in the Baltic Basin are the
organic-rich black shales of the Lower Palaeozoic section. In
addition to these assets, the Company holds onshore exploration
licences over acreage near Krakow in southern Poland and in
Baden-Wurttemberg in south-west Germany.
The technical information and opinions contained in this
announcement have been reviewed by Peter Clutterbuck (MA Honours in
Engineering, Cambridge University and former Member of the Board of
the Society of Petroleum Engineers in London), Chief Executive
Officer of 3Legs Resources plc, who has over 35 years of experience
in the oil exploration and production industry. He has consented to
the inclusion herein of such technical information and
opinions.
www.3legsresources.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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