27th Mar 2014 14:05
LONDON (Alliance News) - San Leon Energy PLC Thursday said it has signed a farm-out deal under which US-based TranAtlantic Petroleum Ltd will fund all of a six well programme in Poland.
Under the terms of the deal, TransAtlantic will earn a 50% stake in the sites based in Poland's Permian basin and become their operator.
San Leon hopes the new deal will help achieve commercial production in the Permian Main Dolomite and Rotliegendes formations as well as proving what is described as a "huge upside" potential of the Carboniferous tight gas play.
San Leon said the estimated value of the work programme is between USD60 million and USD70 million, although costs could be lower thanks to the recent increase in service providers in Poland.
TransAtlantic is expected to pay USD5.0 million to San Leon as a contribution to back costs and a further USD5.0 million once a total of 150,000 barrels of oil equivalent have been sold.
It is expected that the first well under the deal will get underway in June.
"This is a great step forward in quickly bringing our Permian/SW Carboniferous Basin plays to commercial production," Chairman Oisin Fanning said in a statement.
"TransAtlantic brings the experience of a proven North American operator with a track record of successfully proving and producing unconventional oil and plays in Turkey and Bulgaria," he added.
Under the deal, TransAtlantic would earn an undivided 50% working interest in the Nowa Sol, Wschowa, Gora, Rawicz, Prisice, Kotlarka, Olesnica, Praska and Wielun concessions, totalling more than 1.9 million gross acres.
The stock was trading at 3.80 pence Thursday, down 0.20 pence or 5.0%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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