Poland Close to Europe's First Commercial Shale Gas

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - Poland's ambitions of becoming Europe's first commercial supplier of shale gas took a significant leap closer recently when Dublin-based San Leon Energy (Dublin, Ireland) announced successful testing at one of its wells in the north of the country.

San Leon announced the successful completion of flow testing in the Ordovician shales at the vertical Lewino-1G2 well on its 221,000 acre (894 km2) Gdansk W Concession in Poland's northern Baltic Basin. It recorded sustained gas production at a rate of 45,000--60,000 standard cubic feet per day (scf/d) after six weeks of well clean-up, 'despite the well not yet being fully cleaned of frac fluid', the company said. The positive results open the way for San Leon to drill and test a long horizontal well with multi-staged frac as soon this summer - subject to permitting, rig availability and planning with technical partners. Based on U.S. data, horizontal wells typically yield 7-30 times the production rate and recovery of vertical wells in the same formation.

"This is the most encouraging vertical shale well test in Poland to date," claimed San Leon Executive Chairman, Oisin Fanning, "We have moved a long way towards "cracking the code" towards commercial production from our unconventional plays. This has been achieved in conjunction with our technical partners, and is the result of the successful iteration of the frac design to the point where we can now see the production potential of our extensive shale gas acreage in Poland's Baltic Basin. These learnings will be put to good use in the planned multi-staged fracced horizontal well in the Lewino area, where we believe we shall be able to stimulate the entire vertical extent of the Ordovician interval with each frac, and prove commercial flow rates."

Dennis McKee, CEO and President of project partner United Oilfield Services (UOS), added: "The recovery of gas so early in the flowback of frac fluid is highly unusual and very positive. It suggests to me that the formation really wants to flow gas. In the upcoming horizontal well we can use the success from the frac design from the upper Ordovician to target the whole of the Ordovician."

Poland, alongside the U.K., Ukraine and Romania, are keen to exploit shale gas reserves using the controversial practice of hydraulic fracturing or 'fracking', which involves injecting a mix of water and chemicals at very high pressures into the shale in order to crack it and release gas flows.

Poland is proving a difficult country to operate in according to some leading exploration companies. Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas), Marathon Oil Company (NYSE:MRO) (Houston, Texas) and Talisman Energy USA Inc. (NYSE:TLM) all exited the Polish shale sector last year blaming 'red tape'. There have also been a series of scandals, with Polish state prosecutors charging four government employees and three businessmen over collusion in a bribery scheme to help companies win shale gas exploration licences.

In December, Polish Oil & Gas Company (PGNiG) (Warsaw, Poland), the country's largest oil and gas company, signed a Memorandum of Understanding (MoU) with U.S, energy major Chevron (NYSE:CVX) (San Ramon, California) to collaborate on shale gas exploration projects in south-eastern Poland. For additional information, see December 16, 2013, article - Poland Strikes Shale Gas Deal with Chevron .

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