Oil and gas group San Leon Energy (LON:SLE) has been awarded extra acreage on its 100% controlled license blocks 48 and 49 on the Gdansk W Concession in Poland’s Baltic Basin. The move takes the company’s holding from 114.6 sq km to 894.41 sq km and is part of a plan to grow its position in the Baltic Basin and focus on proving the potential of the highly prospective Paleozoic shales for significant natural gas production.
The concession is valid for up to five years and covers a work programme which includes geological studies, 280km of 2D seismic acquisition and a one well drilling obligation. The concession also has an optional 3D seismic survey and an additional two wells.
The expansion of the Gdansk W Concession increases the total area of a farm-out agreement with Talisman Energy (TSX: TLM) which was signed in February. Talisman is a leader in shale gas exploration and development and is paying 60% of a initial seismic acquisition programme covering 480 km of the acreage. Earlier this year, San Leon said initial technical evaluation of the shale gas potential of the Silurian and Ordovician rocks in the Baltic Basin showed the play has an estimated potential of 4.0-6.0 TCF of recoverable natural gas across its acreage.
In January, San Leon was awarded the Nida Concession for oil and gas reconnaissance and exploration in the Malpolska Block in southern Poland. That was followe in May by the award of the 603.4 sq km Szczawno Concession in the Baltic Basin.
Oisín Fanning, the chairman of San Leon, said: “This latest award in this very sought-after shale gas area confirms our drive to early production in Poland and is a welcome affirmation by the Polish authorities. The Concession is on trend with recent drilling by Lane Energy and its partner ConocoPhillips (NYSE: COP) and is also within the scope of our farm-out agreement with Talisman Energy. We are very much looking forward to the operational period, which is already in the advanced planning phase."
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