Insight

US excellence to Europe

30 August 2012, Posted by Dr John Buggenhagen

The perception that shale gas and exploration won’t work in Europe is wrong – it will work and is working. In the past I have been quoted as the guy who bursts the government’s monopoly and that is exactly what I intend to do. Part of my job is to bring a commercial, competitive oil and gas environment into Poland, bring down costs and get in line with North America.

At San Leon Energy we’ve built up a portfolio of high-impact exploration assets centred on two core countries - Poland and Morocco - as well as early stage acreage in Albania, the Celtic Sea and the Netherlands. Since we started, the team has been committed to building up a diverse portfolio of unconventional and conventional oil & gas assets. We’ve secured attractive and significant acreage position with over 30 licences covering approximately 11.8 million net acres. We act as operator on all but one of our assets. What makes San Leon special is our exceptional in-house specialist technical team who have local experience in applying proven technology to underexplored acreage. And to lower our risk we made the decision to operate in highly import-dependent countries with attractive fiscal regimes and oil linked gas prices.

The attractiveness of Poland is undeniable – high impact shale gas with low risk early production oil & gas prospects. Through several strategic acquisitions over the years we have emerged as a leading player, becoming the largest acreage holder. Our Polish acreage spreads across three basins targeting multiple conventional plays and two significant gas plays in the Baltic Basin and the southwest Carboniferous Basin.

We’re focused on short term cash generation from the conventional oil plays as well as the enormous potential of the two shale gas plays. The conventional play consists of short term, low risk, low cost accumulations and include our S. Permian Basin and Nida Trough which have early oil production potential. Our North Permian Basin is the short term focus of the company and will fuel the growth throughout the rest of the portfolio. Over time we have built up an excellent shale acreage position in the Baltic Basin, underpinned by the farm-in by Talisman. The full carry of up to six shale gas wells by a highly experienced partner such as them gives us further encouragement and demonstrates their belief in San Leon and our in-house technical expertise.

Morocco is one of the last remaining underexplored regions of North Africa and has favourable fiscal terms, making our entry into this country even more attractive. It encompasses high impact exploration and it has multi TCF potential resources which are on trend with recent large discoveries including shale gas potential and an oil shale project. We are excited about our Tarfaya oil shale pilot which is low cost, well advanced and has the potential to be a game-changer for the company. We have recently accomplished a 1,000 km and 2D seismic programme for our Tarfaya and Zag licences.

San Leon has a suite of assets across Albania, Celtic Sea and the Netherlands, all at an early stage, which we plan to divest of fully or partially in line with our strategy of managing our risk and reward profile. Albania is an emerging asset and I am very excited and encouraged by it. It is a high-impact oil & gas exploration play in a proven hydrocarbon basin and we have recently accomplished 840 km2 3D seismic offshore on our Durresi block by PGS. A farm-out process is currently being run on the high impact Atlantic Margin, as well as royalty payments from the Amstel field in the Netherlands which we are estimate will start in the next 18-24 months.

We have eighteen employees in our Warsaw office who work through all of our projects. Now we have acquired the land their job is to work through all the 2D and 3D seismic and understand the commercial dynamics. This enables us to decide on farming out or whether we need finance. We’ve created our own seismic team and are taking advantage of new technology.

We have producing assets and we are currently looking at a three to five year timescale to deliver major profitability from our core European holdings. Our aim is to now prove up the value and potential of these assets with our current focus on Poland, Morocco and Albania. Our strategy is to use current earnings to invest in future potential, so leveraging our ability to both increase our drilling acreage while properties are still relatively cheap, and use state-of-the-art technology to speed exploration. The plan now is to move to the next phase of our portfolio monetisation.

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About the Author

John is an experienced exploration geophysicist and a proven oil finder, having worked as a prospect generator with ARCO Alaska on the North Slope of Alaska and with Aspect Energy in new ventures exploration in Europe.

1 Comments

31 August 2012 at 11:44 AM

Mark Wilson

Love the new site and the blog John!

Reply

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Opinions expressed on the San Leon Insight blog are those of the respective contributing user only. These views do not represent those of San Leon Energy its management or employees. San Leon Energy is not responsible for and disclaims all liability for content and comments contributed to the San Leon Insight blog by users.

Terms & Conditions

Opinions expressed on the San Leon Insight blog are those of the respective contributing user only. These views do not represent those of San Leon Energy its management or employees. San Leon Energy is not responsible for and disclaims all liability for content and comments contributed to the San Leon Insight blog by users.