San Leon Regulatory News (SLE)

16 September 2013

San Leon Energy Plc

("San Leon" or the "Company")

Lewino-1G2 Initial Vertical Frac and Test Results

San Leon is pleased to announce it has completed the flow back, testing and initial analysis of its first vertical hydraulic fracture stimulation ("frac") of the Lewino-1G2 well on its 221,000 acre (894 km2) Gdansk W Concession in Poland's northern Baltic Basin. This initial vertical frac was performed to test frackability and the flow potential of the lower Ordovician shale and to gather critical data necessary for future horizontal drilling and multi-staged hydraulic fracture stimulation, targeted on obtaining commercial flow rates from the Ordovician and Lower Silurian shales.

The frac was performed through a 4.5-meter perforated interval, at a depth of 3,545.5 to 3,550 meters, in the highly prospective Ordovician Caradocian shale. The frac pumped over 11,000 barrels of fluid and 95 tons of sand propant at an average of 120 barrels per minute with a maximum pressure of 12,200 psi. This is the highest frac pump rate at pressure ever performed outside the US.

Approximately 25% of the frac fluid was recovered along with a small, consistent flow of burnable gas. The well flared gas on several occasions including initial opening of the well after the frac and following a shut-in period after approximately 20% of the frac fluid was recovered.

Results/Conclusions:

· The Gdansk W Concession is located in the gas/condensate window with excellent gas quality estimated to be 98% burnable gas, including 75% methane (C1), 15% ethane (C2), and 8% C3-C10. Based upon initial results the company expects a modest condensate yield from the formation.

· Due to the depth and other rock properties encountered, the use of larger, high-strength propant will be required in future fracs. The Company believes this, and increased propant concentration in the fracs, will significantly increase fracture conductivity and ultimately provide a significant improvement in flow rates.

· The frac fluid chemistry is being redesigned with the benefit of data received from this first frac, and is expected further to improve productivity.

Based upon the significant amount of data collected in this first frac the Company is planning additional vertical fracs in Lewino-1G2 in the Ordovician, to include a re-fracing at the existing fractured zone. Design peer review work is on-going with several other experienced engineering firms in support of UOS' redesign, including APEX Engineering in the USA and Fenix in The Netherlands.

The Company is also in talks with UOS to design, and execute immediately thereafter, fracs in a 1500-metre horizontal section, which the Company expects to unlock the potential of this play.

The Company estimates ongoing operations to take place in early Q4 2013 subject to final design work and regulatory approvals. The Company has already contracted UOS for the additional work at Lewino as part of its on-going services agreement.

Executive Chairman, Oisin Fanning commented:

"The initial results and data collected at Lewino-1G2 are very encouraging and easily justify continued operations on this concession. The amount of data collected along with the flow of burnable gas from the well is an excellent result for this initial frac and test at Lewino and exceeded our expectations for San Leon's first frac in the basin and further underpins our belief that we are in one of the highest potential blocks in the basin. As is seen throughout North America, each working shale is different, and in fact the same shale formations can vary significantly in the same basin. We are at a critical stage in our shale gas exploration in Poland and we are excited to have flowed gas to surface and to have recovered the necessary information to continue to prove this play. Our knowledge of this system has increased exponentially and we believe has accelerated our understanding of the commercial potential of shale gas production in Poland."

Qualified person

Joel Price, who has reviewed this update, has 19 years' experience in the oil & gas industry and is a member of the Society of Petroleum Engineers. He holds a BA in Natural Sciences from Cambridge University, an MEng from Heriot-Watt University, and an MBA from Durham University. Joel is currently the Head of Engineering for San Leon Energy and is based in San Leon's London office.

For further information contact:

San Leon Energy Plc

Tel: +353 1291 6292


Oisin Fanning, Executive Chairman

Macquarie Capital (Europe) Limited


Tel: +44 (0) 20 3037 2000


John Dwyer

Fox Davies Capital


Tel: +44 (0) 20 3463 5000


Daniel Fox-Davies


Susan Walker

FirstEnergy Capital LLP


Tel: +44 (0) 20 7448 0200


Hugh R. Sanderson


David van Erp

Westhouse Securities (Nominated Advisor)


Tel: +44 (0) 20 7601 6100


Richard Johnson
Antonio Bossi

College Hill Associates


Tel: +44 (0) 20 7457 2020


David Simonson
Alexandra Roper

Plunkett Public Relations


Tel: +353 (0) 1 284 4414 / +353 (0) 87 826 0833


Sharon Plunkett


Jennie Cotter

www.sanleonenergy.com