LNG Energy Ltd., Vancouver, BC, entered into a term sheet with a unit of TransAtlantic Petroleum Ltd., Dallas, to earn a 50% interest in a future shale gas production concession in northwestern Bulgaria.
LNG Energy will initially fund up to $7.5 million to drill, core, and test a 10,500-ft exploratory well on the A-Lovech license targeting the Middle Jurassic Etropole, a calcareous shale similar to the Upper Jurassic Haynesville shale in the US. If the well were successful, TransAtlantic’s Direct Petroleum Bulgaria EOOD will apply to the government for a 35-year production concession expected to cover 405,080 acres.
LNG Energy might also form a subsidiary in Bulgaria that would drill a second well or otherwise explore the concession if formed. LNG Energy said the Etropole formation, especially its organic-rich lower part known as the Stefanetz member, is the targeted interval for a gas resource. It is the proven source rock for major oil and gas fields in northwestern Bulgaria.
The Etropole formation is a thick, black, organic-rich source rock lying at less than 2,500 m to deeper than 5,000 m; it shows appropriate maturity for gas generation and is overpressured throughout much of the region.
LNG Energy said, “The proximity to an established gas market, an existing gas pipeline infrastructure, and gas prices of over $10/Mcf make the Etropole play an economically attractive target.
“Significant gas shows were detected while drilling the Etropole formation in the most recently drilled well by Direct Bulgaria (Deventci R-1) [(OGJ Online, Sept. 28, 2010)]. Many older wells have also encountered shows while drilling in the play area. Given the rock properties of the Etropole, it is believed that it will respond favorably to modern completion and stimulation techniques and may yield significant economic gas resources.”