Talisman and San Leon Sign Joint Venture Agreement

Source: www.gulfoilandgas.com 3/1/2010, Location: Europe

San Leon Energy PLC is pleased to announce that its decision to enter into the Baltic Gas Shale play in Poland has culminated in this exciting farm in announcement with Talisman Energy Inc. ("Talisman"). Talisman is a diversified, global, upstream oil & gas company, based in Canada, currently piloting and developing a number of shale plays in North America. Talisman 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 3rd pending concession application in the Gdansk area.

Highlights:

* San Leon carried through seismic programme and potential 6 well programme – an estimated investment of US$80 million

* Talisman will pay 60% of the seismic costs, remaining costs will be covered through the PGS agreement

* Talisman has paid San Leon €1.5 million on signing the joint venture agreement

* Talisman to drill one well across each of the three concessions

* Option to follow up with three further wells – should the data encourage further development

* Talisman will be assigned a 60% interest in the concessions

* San Leon estimates potential of 4.0-6.0 TCF of recoverable natural gas across these concessions

A Farmout has been signed between the San Leon Polish subsidiary Oculis Investments Sp. z o.o. and Talisman Energy Inc. for the exploration of shale gas in the Baltic Basin onshore Poland. Under the agreement Talisman has agreed to 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 the 2009 agreement between PGS and San Leon. Talisman will also drill one well across each of Oculis's three concessions with the option to follow up with a further three wells should the data encourage further development. Talisman will be assigned a 60% interest in each concession, reducing to 30% if it doesn't elect to drill the optional second well. This represents a potential estimated investment of more than $80 million USD in the coming three years to prove a potentially significant gas play in Poland.

Based upon 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 TCF of recoverable natural gas across San Leon Energy's acreage. Currently Oculis has two concessions, Braniewo and Gdansk West, totalling more than 1,820 km2. Oculis has an additional concession application pending which would add an additional 600 km2. Oculis selected its concessions to explore a diverse range of depth and rock types based upon previous wells drilled in the basin. The company believes its diverse position provides a high probability of commercial success.

Ois?n Fanning, Chairman of San Leon commented:

"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.
Talisman are a global oil and gas player with an excellent track record and expertise in shale gas. This partnership is testament to our continuing efforts to bring value to our shareholders and we look forward to working with Talisman on this programme."


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Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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