3Legs Concentrating on Northern Poland
3Legs Resources plc. is giving up on Germany and France and concentrating on Poland, particularly in the western Baltic Basin.
The company, which is publishing the preliminary 2012 results, has announced it is going to limit its activities to Northern Poland, primarily to 3 concessions Northwest of Gdansk. Damnica, Lebork and Karwia concessions are located along the Baltic coast and comprise over 2000 km2 (over 500 000 acres).
Tim Eggar, the Chairman of 3Legs said that, after discussions with major shareholders and considering current licence portfolio and available cash resources the "Board has determined that we should limit the geographical focus of our activities to Poland, which is already the Group’s core area of activity in any case.”
3LegsResources is exploring shales of the western Baltic Basin with ConocoPhillips. The American major holds a 70 percent stake in these three concession licenses.
The partnership has already completed fracturing tests on two horizontal wells, and is the most advanced player in exploration for shale gas in Poland, although the company’s outlook for 2013 suggests it may soon lose this statistical position to one or both Polish state-controlled companies (read more: Poland: Orlen Prepares for First Horizontal Fracturing in Lubelskie and Polish Gas Company to Intensify Exploration in 2013)
According to the outlook released by 3Legs, the partnership`s plans for 2013 comprise of further testing of the most promising location, the Lebien LE-2H horizontal well, continuing works in nearby Strzeszewo LE -1 vertical well, plus drilling and testing of a further two or more vertical wells.
The key decision to drill one or more horizontal wells, as the stage of a potential pilot development programme, is expected in 2014.
Hope flows from Lebien, on Lebork concession area, where the first flare opened hunt for shale gas in Poland in late 2010. The company is pointing out to improved results of repeated tests in the horizontal well LE-2H in October and November of 2012. The average unassisted flow rate of 550 mscf per day was registered in the course of 21 days, and according to CEO Kamlesh Parmar, this target formation may have additional reservoir potential.
The other horizontal wells, in Warblino, is a disappointment for the company, which expected significantly higher test flow rates, on the basis of the porosity and gas shows recorded while drilling.
“It seems likely that well performance was affected by a mechanical issue arising from the cementing of the horizontal section, rather than by formation reservoir issues, and also that further drilling and testing of the Cambrian section will be needed in order fully to investigate this issue.”- writes Kamlesh Parmar, adding that different design of the lateral section or the well stimulation will be needed.
All hands on Baltic
The company used to hold three concessions in Southern Poland, NW of the Upper Silesia conurbation. Following seismic testing, 3Legs Resources surrendered Dabie-Laski concession in August 2012 and decided not to move to a drilling phase.
The moratorium on hydraulic fracturing was the reason for rejecting of two applications filed by the company in France. “We have filed notices of appeal against both decisions, although we are currently considering whether it is appropriate to continue this process” – explains the CEO.
3Legs Resources is not going to proceed further on its two concessions in Baden-Wurttenberg, Southern Germany and is exploring options for monetizing those holdings..
Both 3Legs and ConocoPhillips agree that western Baltic can bring success to the exploration for economically viable, unconventional sources in Europe. Earlier this month the ConocoPhillips SVP Exploration and Production EVP Matt Fox declared: “"We think this play really could work.
“We consider not only presents the lowest risk part of our acreage for future exploration and appraisal activities , but also offers a higher probability of success than was attributed to our Baltic Basin acreage at the time of our initial public offering in June 2011” – adds Tim Eggar of 3Legs Resources.