12th Feb 2014 11:47
LONDON (Alliance News) - San Leon Energy PLC Wednesday said it has signed a letter of intent with Baker Hughes Poland SP to jointly begin developing the Siekierki Gas Field in Poland.
The oil and gas production company, with operations in Europe and North America, said the companies plan to start gas production from four existing wells, namely Trzek-1, Trzek-2ZH and Trzek-3H on the Siekierki structure, and the nearby Krzesinki-1 well.
The company said the deal envisages the Baker will provide all funding necessary, in the form of cash, in-kind oilfield services, or a combination, to re-complete and bring into production the wells.
San Leon said that Baker's services will be provided at its standard prices and based upon a master service agreement to be agreed between the companies.
The company said that in return for the funding, Baker will receive a certain portion of the profits generated from production until its investment has been fully recovered, at which point it will receive certain net-profit interest from the wells.
The companies have now entered an exclusivity period during which the final work scope and commercial terms will be negotiated and agreed.
San Leon shares were trading flat at 4.50 pence Wednesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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