1st Jul 2014 07:59
LONDON (Alliance News) - San Leon Energy PLC Tuesday said it has signed a joint venture deal with the US's Palomar Natural Resources across seven concessions in Poland's Permian Basin for an initial payment of USD20 million in cash.
The oil and gas production company, with operations in Europe and North America, said that Palomar will get a 65% working interest in San Leon's Southern Permian Basin and Northern Permian Basin licences in return for the cash and carried payments for an initial work programme on the sites.
The Permian Basin operations are focused on the discovered but unproduced Siekierki and Rawicz gas fields and the carried work programme aims at bringing the two fields into production as soon as possible.
San Leon said that the carried payment of San Leon's interest in the first two development wells on the Rawicz gas field will be repaid from half of San Leon's production revenues from the site once it goes into production. If it fails to go into production, the carry will not be repaid.
The company added that Palomar will fully carry without repayment, the work over, recompletion, and testing of three existing wells in the Siekierki Gas Field.
The work programmes aim to provide the justification to construct production facilities and pipelines and to achieve near-term production at the sites.
"PNR bring a team of US-based industry experts who have the expertise to maximize production and ultimate recovery from these significant gas fields," Chairman Oisin Fanning said in a statement.
"The receipt of the up-front cash payments, and the execution of work programmes on Rawicz and Siekierki to target early production, put San Leon on a strong footing and will provide a basis for continued production growth throughout the company's portfolio," Fanning added.
San Leon shares were up 9.6% to 2.18 pence, putting it amongst the top AIM All-Share risers during early trading on Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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