Last checked at 24 Mar 2014 07:00
24 March 2014
San Leon Energy Plc
("San Leon" or the "Company")
LOI for Cybinka and Torzym Concessions amended to include Sosna Frack
San Leon announces that is has amended the terms of its Letter of Intent (the "LOI") with Horizon General Ltd ("Horizon"), announced in August 2013. In addition to the previously-notified terms, Horizon has now agreed to pay for San Leon's share of costs in the planned operation to fracture the Sosna-1 exploration well, which will evaluate the commerciality of the unconventional Main Dolomite play.
Under the revised agreement, Horizon will now acquire a 22.5% working interest (half of San Leon's current interest) in San Leon's Cybinka and Torzym Concessions (the "Concessions") in Poland's Permian Basin.
In return for earning its working interest, the amended terms of the LOI require Horizon to:
· fully fund 100% of San Leon's working interest share (namely 22.5%) of the costs of fracking the Sosna-1 exploration well up to a gross cost of €1,500,000.
· fully fund 100% of San Leon's working interest share (namely 22.5%) of the costs of the drilling, completing, and testing of a Torzym well up to a gross cost of €6,000,000. The Torzym well is targeting a toe-of-slope conventional Main Dolomite play similar to some of Poland's largest oil fields such as the Lubiatow field.
· fully fund 100% of San Leon's working interest share (namely 22.5%) of the costs of (i) the drilling, completion, and testing of an additional exploration well within the Concessions targeting the Permian Main Dolomite or (ii) production facilities or a combination of both (i) and (ii) up to gross costs of €6,000,000.
San Leon and Horizon shall use reasonable endeavors to frack the Sosna well and spud the initial Torzym well by 31 August 2014.
The farm-in is subject to, amongst other things, the execution of a final farm-in agreement and partner approval of the transaction.
Upon completion of the above work programme, the working interests shall comprise 22.5% San Leon (operator), 22.5% Horizon, 30% S.N.G.N. Romgaz S.A., and 25% Sceptre Oil & Gas Limited.
Oisin Fanning, Chairman of San Leon, commented:
"This farm-out covers San Leon's expected costs to fracture the Sosna well and drill two wells in the Torzym and Cybinka areas. Success in these operations will deliver material upside to San Leon's holdings in the Concession at no cost to the Company and will have a direct read across to our other blocks in the Permian Basin. If the Torzym well is successful, we have built flexibility into this agreement, and included a carry on costs, to install the facilities necessary to bring the resource into production as early as possible."
For further information contact:
San Leon Energy plc Oisin Fanning, Executive Chairman
| +353 1291 6292 |
finnCap Ltd Corporate FinanceMatt Goode Christopher RaggettCorporate BrokingElizabeth JohnsonJoanna Weaving
| +44 (0) 20 7220 0500 |
Fox-Davies Capital Limited Daniel Fox-DaviesOliver StansfieldJonathan Evans
| +44 (0) 20 3463 5000 |
Macquarie Capital (Europe) LimitedSteve BaldwinNicholas Harland
| +44 (0) 20 3037 2000 |
Westhouse Securities LtdNominated AdviserRichard JohnsonAntonio Bossi
| +44 (0) 20 7601 6100 |
Vigo CommunicationsFinancial Public RelationsPatrick d'AnconaChris McMahon
| +44 (0) 20 7016 9573 |
Instinctif PartnersInvestor Relations AdviserDavid SimonsonCatherine Wickman
| +44 (0) 20 7457 2020 |
Plunkett Public RelationsSharon Plunkett | +353 (0) 1 280 7873 |
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 Chief Operating Officer for San Leon Energy and is based in San Leon's London office.