San Leon Regulatory News (SLE)

23 October 2013

San Leon Energy Plc

("San Leon" or the "Company")

Lewino-1G2 Operational Update

San Leon is pleased to announce the next operational steps for the 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.The initial vertical frac was performed to test both the fracture stimulation and flow potential of the lower Ordovician shale and to gather necessary data for future horizontal drilling and multi-staged hydraulic fracture stimulation. The Company announced on 16 September 2013 that, in conjunction with United Oilfield Services (UOS) and other specialist frac consultancies, it would use the data to optimise further frac operations in the well. That design work has now been completed, materials and services have been ordered, and mobilisation of the snubbing unit to prepare the well for the fracs will commence shortly. As with any drilling operation, the timescales can be subject to some variation, however, the snubbing unit will be mobilised in the coming days and the Company expects flowback, clean-up and testing to begin at the end November or early December,

During these operations, two further fracs will be performed on Lewino-1G2. The first will be a re-frac of the existing zone, while the second will frac a new overlying part of the Ordovician Caradoccian formation. The design work is expected to optimise these operations by changing several parameters relative to the initial frac, including the use of ceramic propant, which has significantly higher strength than sand, reducing propant crushing, and therefore expected to yield better frac conductivity and communication to the wellbore. Although this is believed to be the first time that ceramic propant has been used in Poland, it is very widely used in the US.

Executive Chairman, Oisin Fanning, commented:

"We are pleased with our optimisation plans for the next stage of the frac stimulation operations on Lewino-1G2. These have been based on the valuable data acquired from the first frac, and have had input from all parties involved. We look forward to reporting back on our progress."

Qualified Person

Joel Price, who has reviewed this update, has 20 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.

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