TIDM3LEG
RNS Number : 2412M
3Legs Resources plc
22 August 2013
For Immediate Release
22 August 2013
3Legs Resources plc
Corporate update
3Legs Resources plc (the "Company"), an independent oil and gas
group focusing on the exploration and development of unconventional
oil and gas resources, announces the following corporate
update.
Highlights:
Lebien LE-2H horizontal well
-- A natural flow test was commenced on 21 July 2013 and as at
20 August the well was flowing at approximately 300 mscf/d.
-- Preliminary analysis of the flow test data indicates an area
of low conductivity in the vicinity of the well, potentially
restricting the flow of natural gas into the wellbore, which may be
addressed in future well and completion designs.
Strzeszewo LE-1 vertical well
-- Flow testing commenced on 4 August 2013 using a nitrogen lift.
-- As at 20 August 2013, the well was continuing to flow back
frac fluid and approximately 17% of the frac fluid originally
injected had been recovered.
-- After being temporarily shut in to set down-hole pressure
gauges, the well flowed natural gas and a flare was lit for a short
period.
-- Preparations are continuing for a second test programme in
the well, in the Ordovician O3 or Sasino shale, the Company's
primary target.
2013/14 drilling programme
-- United Oilfield Services has been appointed as drilling
contractor for the 2013/2014 drilling programme; a contract has now
been signed which provides for the drilling of two firm wells with
the option to drill up to two additional wells and/or lateral
sections.
-- Well locations within the Company's high-graded area are
being finalised and construction of the first location is expected
to commence shortly.
-- The Company continues with ConocoPhillips to review regularly
the drilling programme and the timetable for its
implementation.
Other licences
-- The Company's southern Poland concessions have been allowed to lapse, consistent with its previously-announced intention not to incur any further expenditure on these concessions.
-- The Company is actively pursuing possible options for
monetising its eastern Baltic Basin and southern German
concessions.
Corporate update
Lebien LE-2H horizontal well
Following the temporary suspension of operations in June, well
testing recommenced on 8 July 2013. After an initial period during
which the well flowed with the aid of a nitrogen lift, the well
started to flow natural gas without assistance on 13 July 2013,
from the Ordovician O3 (or Sasino) shale.
Down-hole gauges were then placed in the well, to collect
pressure data. In addition, pressurised samples of the produced
fluids were collected. This data, which has not, to the Company's
knowledge, been gathered from any previous testing in the Baltic
Basin, will be used to help determine the characteristics of the
reservoir fluid and reservoir conditions. Further drilling and
testing of exploration wells will help the Company to improve its
understanding of the reservoir characteristics of the Sasino shale
on its concessions.
The well commenced a natural flow test on 21 July 2013, flowing
at approximately 400 mscf/d, and as at 20 August was flowing at
approximately 300 mscf/d. The well has continued to clean up during
the test and by 20 August 2013 approximately 42% of the water used
during the hydraulic fracturing operation on the well in 2011 had
been recovered. It is currently intended to continue the natural
flow test for approximately 30 days from inception, with down-hole
gauges then being left in place to collect data.
Preliminary analysis of the flow test data indicates an area of
low conductivity in the vicinity of the well, potentially
restricting the flow of natural gas into the wellbore. This may be
explained by a number of factors, many of which can be addressed in
future well and completion design, such as the effective length of
the lateral section, the frac design, or the presence of non-mobile
elements such as paraffin.
Strzeszewo LE-1 vertical well
Following the completion of the single-stage hydraulic fracture
stimulation in the Cambrian Alum (or Piasnica) shale using a
cross-linked gel, cleaning up of this well commenced on 4 August
2013, using a nitrogen lift as planned. As at 20 August 2013, the
well was continuing to flow back frac fluid, and some 17% of the
frac fluid originally injected had been recovered. After being
temporarily shut in to enable the perforations to be checked and to
set down-hole pressure gauges, the well flowed natural gas and a
flare was lit for a short period. It is intended to continue to
seek to achieve a sustained flow of natural gas for a period, and
to take gas samples. The well will then be shut in to enable
pressure build-up data to be collected.
Preparations are continuing for a second test programme in the
Strzeszewo LE-1 well, comprising a DFIT, hydraulic frac stimulation
and flow test in the Ordovician O3 or Sasino shale, which remains
the Company's primary shale target. The hydraulic frac stimulation
and flow test of this zone are still planned to take place in
2013.
2013/14 drilling programme
The Company's preferred drilling contractor, United Oilfield
Services, has been appointed for the 2013/2014 drilling programme
and a drilling contract has now been signed. The contract provides
for the drilling of two firm vertical wells with the option to
drill up to two additional wells. All the wells will be drilled
initially as vertical pilot wells and, as in the case of the
Company's earlier vertical wells on its Baltic Basin concessions,
will involve an extensive programme of coring and logging so that a
full set of data can be acquired, thus enabling the Company to
refine further its geological model.
Drilling operations are planned to commence in the fourth
quarter of 2013 and to continue throughout the first half of 2014.
Well locations within the Company's high-graded area are being
finalised and construction of the first location is expected to
commence shortly.
The wells will also be drilled with the option to drill lateral
sections. The Company continues with ConocoPhillips to review
regularly the 2013/14 drilling programme and the timetable for its
implementation.
The acquisition of 32 sq km of 3D seismic on the Karwia
concession has now been completed and the new data acquired are
being processed.
Other licences
As indicated in its last Annual Report, the Company has been
investigating options for monetising its licence interests outside
its Baltic Basin concessions, without incurring any immediate
expenditure on these assets. The Company is actively pursuing
possible options for monetising both its eastern Baltic Basin and
its southern German concessions, while it has allowed its southern
Poland concessions to lapse.
Kamlesh Parmar, Chief Executive of 3Legs Resources,said:
"We are pleased to be conducting our third round of testing of
the Lebien LE-2H horizontal well, where we are achieving a
sustained and unassisted flow of gas. We are obtaining valuable new
data from this test which will help us further to progress our
understanding of the Ordovician O3, or Sasino, shale formation and
its commercial potential. We continue to investigate possible ways
of achieving improved flow rates from this and/or similar
wells.
We are pleased also to have completed our first test of the
Strzeszewo LE-1 vertical well, testing the Cambrian Alum, or
Piasnica, shale, although we have as yet been unable to flow
significant volumes of natural gas from this zone. The hydrocarbon
generation potential of the Cambrian Alum shale across this region
of Europe is well known and we remain believers in its potential in
the area of our concessions. We will be carefully examining data
from this well to see what else can be learned with a view to
improving our drilling and completion strategy in this important
zone."
For further information contact:
3Legs Resources plc Tel: +44 1624 811 611
Kamlesh Parmar, Chief Executive
Officer
Alexander Fraser, Chief Financial
Officer
Jefferies Hoare Govett Tel: +44 207 029 8000
Simon Hardy
Jamie Buckland
Northland Capital Partners Tel: +44 207 796 8800
Louis Castro
Matthew Johnson
FTI Consulting Tel: +44 207 831 3113
Oliver Winters
Georgia Mann
Notes to Editors
3Legs Resources plc is an independent oil and gas group focused
on the exploration and development of unconventional oil and gas
resources. 3Legs Resources holds interests in six licences covering
approximately 1,084,000 acres (gross) in the onshore Baltic Basin
in northern Poland, a region considered to be one of the most
promising shale basins in Europe.
The technical information and opinions contained in this
announcement have been reviewed by Christie Ward Schultz (BSc in
Petroleum Engineering, Texas Tech University), Engineering Manager
of 3Legs Resources plc, who has over 14 years of experience in the
oil exploration and production industry. She 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
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