TIDMSLE
RNS Number : 9771I
San Leon Energy PLC
23 June 2011
23 June 2011
SAN LEON ENERGY
("San Leon" or the "Company")
Operational update
San Leon, the AIM-traded oil and gas exploration and development
company focusing on projects in Poland, Morocco, Albania and the
Atlantic Margin, is pleased to provide the following Operational
Update.
Poland - Exploration programme continues as planned
-- Interpretation and prospect evaluation is ongoing in
Szczecinek Block 106 (San leon 50%). San Leon and its partner, Gas
Plus, are looking at further studies including a regional core
study to evaluate the paleogeography and continued evaluation of
the newly acquired 3D survey. Gas Plus, the operator of the
licence, are likely to delay drilling until 2012 (from Q3 2011) due
to internal planning considerations.
-- The Baltic Basic 2D seismic programme, over the Gdansk W,
Braniewo and Szczawno Concessions, was completed in June 2011. The
Company successfully acquired 480 km of 2D data. The programme was
completed with a perfect HSE (Health, Safety and Environment)
performance. A drilling rig has been booked for 1 August 2011,
which will be used to drill three back-to-back wells.
-- Geofizyka Krakow completed 120 km of high quality 2D seismic
over the Company's 100% owned Nida Concession in May 2011. The data
has been interpreted and confirmed three high potential structures
on trend with the prolific Grobla and Plowice oil fields. A San
Leon subsidiary, Vabush Energy, plans to drill two of these
prospects commencing in July/August 2011.
-- Acoustic Geophysical has started the acquisition of 165 km(2)
of 3D seismic on the Company's 100% owned Nowa Sol Concession. The
survey is currently c.20% complete and is seeking to delineate
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 ongoing in the Carboniferous shale play across the
Wschowa, Gora, Winsko and Rawicz Concessions (San Leon 100%). The
Company continues to evaluate the existing core and well data in
preparation for the first exploration well in the area which is
planned for Q4 2011. Core analysis is being performed by TerraTek
(Schlumberger) and the Polish Oil & Gas Institute in Krakow.
Petrophysics on the existing well logs has been performed by
NuTech.
Morocco
-- The Tarfaya Oil Shale pilot project is well advanced.
-- The base camp has been constructed and all operational
personnel are on site with all communications systems in place.
-- The pilot plant site construction and the assembly of the
process equipment has been completed.
-- Two wells have been drilled at a distance of 10 meters apart
confirming the presence of 30 metres of prospective oil shale at a
depth of 195 meters. This is slightly thicker than the original
prognosis. The initial model provided by ONHYM (Morocco National
Office of Hydrocarbons and Mines) has also been confirmed by the
well logs.
-- A pre frac injection test with water was applied to collect
data concerning the natural connectivity between the two wells and
was followed by a mini hydro frac. This was unable to establish
connectivity between the wells.
-- Initial analysis of these tests has suggested the presence of
natural fractures in the shale. San Leon is encouraged by the
possibility of these natural fractures which could enhance the
propagation of heated gas throughout the prospective intervals.
-- The Company is re-evaluating the technical programme to
incorporate the new data gained from these tests into its model for
commercial extraction of oil from the Tarfaya Shale.
-- The Company plans to drill a third test well using the same
rig in August 2011. Core data will be collected, from this well, in
order to evaluate the local geologic parameters of the prospective
shale interval as well as the presence and orientation of any
natural fractures at the pilot location. Following the drilling of
the third well, San Leon will again perform a small frac on the
shale to establish connectivity between the wells. Based upon these
results injection tests will be designed to take advantage of the
fractures.
-- Upon successful flow testing with water, followed by
nitrogen, propane will subsequently be brought to the pilot plant
to test the process of heating the shale with natural gas.
-- San Leon's new seismic acquisition subsidiary, NovaSeis, is
up and running in Morocco. NovaSeis plans to start the acquisition
of 1,200 km of 2D seismic in its Tarfaya and Zag Licences by July
1, 2011.
-- Full re-interpretation of the seismic data on the offshore
Foum Draa and Sidi Moussa Licences is 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.
-- San Leon completed a 250 km(2) 3D seismic survey on the North
Porcupine Licence (FEL 1/04) in May 2011. The offshore survey was
designed to evaluate the highly prospective C1 Lead. PGS
Exploration UK Limited was contracted to carry out the survey using
the M/V Ramform Vanguard. San Leon has a seismic services agreement
with PGS Ventures AS, who is providing a US$50m facility for
seismic services, part of which was used for this survey. We expect
to finalise the data processing contractor(s) in the coming weeks.
Seismic processing is expected to be complete in early Q4 2011.
-- The Company continues to interpret the 300 km(2) Slyne
Licence (FEL 4/06) 3D survey. Delays in processing and
interpretations are the result of very complex structural issues
and significant surface volcanics which have made imaging some
areas of the survey very difficult. The initial interpretation is
encouraging and the Company plans to open a data room in
August/September 2011.
-- Following the completion of the assignment of OMV's 50%
interest in Rockall Licence (FEL 3/05) to San Leon in March 2011,
the Company had insufficient time to secure a seismic survey vessel
for the licence in Summer 2011. San Leon expects to apply to the
Irish Government for a licence extension.
-- The company is also considering several options for data
acquisition/analysis of the South Porcupine Licence (FEL 3/08)
including 2D/3D seismic and controlled source electro magnetic data
acquisition with a view to seeking a farm-in partner to the
licence.
-- 3D seismic acquisition operations have commenced on Barryroe
Licensing Option (08/01) in the north Celtic Sea, offshore Ireland.
Polarcus has been contracted to carry out a 220 km(2) survey, which
is expected to be completed by the end of June.
Albania
-- The 840 km(2) Durresi Block 3D seismic acquisition survey was
completed in April 2011. The data is currently being processed by
Western Geophysical in London, who are expected to deliver the
final processed data in early Q4 2011. Parallel interpretation and
prospect generation will continue in the interim.
-- 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.
Netherlands
-- GDF Suez E&P Nederland B.V, the new 50% owner in the
Amstel Field, offshore Netherlands, has successfully completed the
drilling of an appraisal well on 29 March 2011. The partners are
currently evaluating a development plan for the oil field, in which
San Leon Energy holds a 2.5% royalty.
Italy
-- San Leon has notified the Italian authorities that it is
relinquishing two offshore Sicily permits. The Company has made the
decision following the publication of a new Italian Environmental
Law in June 2010 which placed tighter restrictions on oil and gas
exploration within five nautical miles of the coast and twelve
nautical miles of any protected environmental area. In effect, San
Leon would not have gained an environmental authorisation to drill
exploration or appraisal wells in two permit areas, D.352 CR-SL
(Narciso) and D.354 CR-SL (Sciacca). The relinquishment will become
effective upon publication of a notice in the official Italian
Ministerial Gazette, B.U.I.G.. San Leon will continue to retain
D.353 CR-SL (Narciso South) and its two onshore Po Valley assets
Sorbolo and Sospiro.
Oisin Fanning, Chairman of San Leon Energy commented:
"We continue to make steady progress and meet our objectives as
we move from seismic acquisition to drilling on many of our
licences. The completion of three seismic acquisition programmes in
Poland, particularly the 2D seismic acquisition in the Baltic
Basin, and the start of another programme on our Nowa Sol
Concession mean our shareholders can now look forward to drilling
these prospects over the coming months.
Furthermore, our new seismic acquisition company, Novaseis, is
about to begin the first of two seismic acquisition programmes in
Morocco and this follows the successful completion of our offshore
Albania and Atlantic Margin Ireland surveys.
The Company's operational and technical capacity continues to
grow in line with our increasing activity, particularly in Poland,
where our knowledge base and expertise is geared towards delivering
near term value for our shareholders."
ENQUIRIES
San Leon Energy
plc Oisin Fanning, Executive Chairman +353 1291 6292
John Buggenhagen, Director
of Exploration
Macquarie Capital
(Europe) Limited +44 (0) 3037 2000
John Dwyer
Paul Connolly
Ben Colegrave
Fox-Davies Capital David Porter +44 (0) 203 463
Limited 5010
Arbuthnot Securities Nominated Adviser +44 (0) 20 7012
Limited 2000
Nick Tulloch
Henry Willcocks
College Hill Investment Relations Adviser +44 (0) 20 7457
2020
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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