bne IntelliNews -
San Leon Energy, the London-listed unconventional energy independent, announced on February 25 that it is close to tapping Poland's first commercial shale gas flows, reviving Warsaw's hopes of a shale gas boom.
The company reported "highly positive well test results" for its Rawicz-12 well. It said it expects the drilling to form its first commercial gas discovery from Polish shale.
San Leon has long been a cheerleader for Polish shale gas, especially over the past couple of years as disappointing test drillings have led energy majors to exit the country.
This will be music to the ears of Warsaw, which will hope it will revive momentum for Polish shale gas exploration. International companies flocked into the country in 2010 on the back of huge reserves estimates. Poland spoke of energy independence, if not turning itself into a European energy game changer. However, reserve estimates have since been sharply cut, and difficult geology has further dented hopes.
US giant Chevron is the latest to leave. It said last month it would join the likes of ExxonMobil in quitting the hunt. Like its peers, Chevron has been hit by falling global gas prices. The company shut shale gas operations in Lithuania last year, and it's operations in Romania and Ukraine look uncertain.
The recent plummet in oil prices is also putting pressure on investment across the sector. ConocoPhillips remains the last energy major looking for shale gas in Poland. An energy conference in December appeared to agree it was "a funeral ceremony for shale gas".
Investors are clearly keen to believe San Leon's version of events, however. The company has somewhat pegged its future to the Polish shale gas dream, so its announcement led shares to soar by as much as 67%.
"This is the well we have been waiting for - a significant gas discovery in one of the highest-priced gas markets in Europe," San Leon Chairman Oisin Fanning enthused.
The company anticipates that an additional three to five wells will be drilled to develop the field - which sits amidst licences held by Polish state-controlled companies such as PGNiG. The second well on Rawicz is already in planning, San Leon said.
"This well is transformational for the company, a step towards energy independence for Poland, and the first of what San Leon anticipates will be a series of such wells for the company in the Rawicz field and elsewhere in Poland," the company insisted in its statement.
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