Talisman and San Leon enter into Polish Gas Shale Joint Venture Agreement

San Leon Energy PLC announced that Talisman Energy Inc has signed a farm in agreement with San Leon that covers the Company's two existing Baltic Basin concessions (Braniewo & Gdansk W) and also extends to a third application in the Gdansk area.

Under the terms of the deal, Talisman will pay 60% of the costs of a seismic programme and has made a cash payment of €1.5 million to San Leon. The remaining 40% will be conducted and paid for under a services-for-shares agreement that was struck last September between PGS Ventures and San Leon.

Talisman will also drill one well across each of the three concessions with the option to follow up with a further three wells if the results are encouraging. Talisman will be assigned a 60% interest in each concession, reducing to 30% if it doesn't elect to drill the optional second well.

Based on San Leon's initial technical evaluation of the shale gas potential of the Silurian and Ordovician rocks in the Baltic Basin, the play has an estimated potential of 4.0-6.0 trillion cubic feet (TCF) of recoverable natural gas across its acreage.

San Leon began building its Polish exploration portfolio back in February 2009 when it paid $1.5 million in shares for TSX-Venture company Gold Point Energy, which owned 50% of Block 106, Szczecinek. It went on to secure the Braniewo concession last July and picked up Gdansk West in December. In January this year it was awarded the Nida concession within the Małpolska Block.

Oisín Fanning, the chairman of San Leon, said: “This is a superb beginning and further justifies the decision to acquire Gold Point Energy in 2009. This also fully justifies our decision to have a significant presence in Poland under the leadership of Dr. John Buggenhagen in Warsaw.

“The potential here is enormous. San Leon is now fully carried, whilst retaining a 40% interest, through a programme which has the potential to prove up a significant gas play in Poland.”

Source: San Leon Energy