P. 3 ~ Continued - UNCONVENTIONAL OIL & GAS FOCUS: Poland shale gas could change European supply mix

Nov. 7, 2011

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Operators report progress

Marathon is the operator of 11 concessions in Poland covering 2.3 million gross acres (1.2 million net) across three basins: Baltic Syneclise, Podlasie Depression, and Lublin Trough. The potential shales are Lower Paleozoic in age.

In April, Nexen Inc. acquired a 40% working interest in 10 of Marathon's 11 concessions.

Annell R. Bay, Marathon's senior vice-president for exploration, told the Baker Institute energy conference that Marathon expects to drill its first well in the Lublin Trough before yearend.

Having completed 2D seismic surveys. Marathon envisions drilling 7-8 eight wells in Poland during 2012.

"We expect to find some liquids there," Bay said. "The same strategy is not going to work across the whole fairway. We are committed to safety and the environment."

The potential of Poland's shales only can be determined "after multiple wells are drilled and producing." Production needs to be tied into pipelines and monitored long-term, she said, noting that Poland's government is working to develop unconventional production licenses.

Meanwhile, Marathon is analyzing core and log data to target horizontal zones that will be drilled after the first vertical well is drilled. Bay anticipates that the time from spudding a well in Poland to completing a hydraulic fracturing job will be 4-5 months, assuming the equipment is available.

As of Oct. 27, ExxonMobil was analyzing results after completing hydraulic fracing of two unconventional gas wells, Krupe-1 and Siennica-1, a spokesman told OGJ in an e-mail. ExxonMobil has two licenses with Total SA in the Lublin basin as well as four licenses on Podlasie acreage.

Krupe-1 is on the Chelm concession in the Lublin basin and Siennica-1 is on the Minsk Mazowiecki concession in Podlasie basin.

Krupe-1 spudded on Dec. 3, 2010, and reached a depth of 3,807 m. ExxonMobil spudded Siennica-1 on Feb. 20, 2011, and drilled to 3,847 m.

ConocoPhillips has an agreement with Warsaw-based Lane Energy that provides ConocoPhillips with the option to develop up to 1 million acres in the Silurian shale, ConocoPhillips executives said during a September investors presentation.

San Leon Energy PLC of Ireland is buying Realm Energy International Corp. in what San Leon describes as a strategy to increase its focus on shale gas exploration in Poland. Realm shareholders on Nov. 1 approved the transaction. Closing tentatively was scheduled for Nov. 3 depending upon final approval from the Supreme Court of British Columbia, said Realm of White Rock, BC.

After closing, San Leon will have 14 shale licenses in Poland covering 1.7 million net acres. The acquisition provides San Leon with entry into the Podlasie basin adjacent to ExxonMobil's acreage.

Realm's key assets are two licenses in the Baltic basin covering 374,851 net acres and one license in Podlasie basin covering 90,069 net acres, San Leon said.

In addition, Realm has licenses in Spain and France and also has assets in Germany. San Leon also has conventional oil and gas acreage in Poland.

Chevron Polska Energy Resources has a 5-year license to explore for oil and gas in southeastern Poland.

On Nov. 2, Chevron said it spudded its first well in Poland to assess shale gas potential on Grabowiec license, on of four licenses the company has in Lublin basin. The well is being drilled in the community of Lesniowice in Chelm County. Chevron has acquired more than 1,300 km of subsurface data in Poland.

Halliburton Co. has a 3-year contract to help Chevron with its exploration of Poland's shale.

Separately, a group shares interest in the Lebork S-1 well on the Slupsk concession in Poland's Baltic basin. The well logged thick shales with gas shows in formations of Lower Silurian, Ordovician, and Cambrian age.

But fracture stimulations on the Cambrian and Ordovician intervals did not result in an effective test, BNK Petroleum Inc., Camarillo, Calif., said Oct. 30 in an operating update. BNK manages the drilling venture.

BNK now plans to use a high-pressure stimulation string across the same intervals, and the restimulation and testing of the well was scheduled for spring 2012 because a suitable stimulation string cannot be delivered before winter sets in.

A BNK subsidiary is drilling three wells as manager for Saponis Investments Sp z o.o. BNK owns 26.7% of Saponis. Other interest owners are Rohol-Aufsuchungs AG, Vienna, Sorgenia E&P SPA, and LNG Energy Ltd., Vancouver, BC.

BNK holds 195,000 net acres in the Baltic basin of Poland through Saponis and a further 880,000 adjacent net acres through another European subsidiary. (OGJ Online, Feb. 17, 2011). Talisman Energy Inc. executives said the first of three initial shale wells in Poland spudded in September.

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