LNG Energy Ltd. is pleased to announce that its wholly owned subsidiary, Kaynes Capital S.a.r.l. has entered into an agreement to acquire a 50% interest in Joyce Podlasie LLC and a 50% interest in Maryani Podlasie LLC from Source Energy Partners LP for US$4 million. Joyce indirectly holds an undivided 100% interest in the Ilawa Concession in Poland and Maryani indirectly holds an undivided 100% interest the Wegrow Concession in Poland. The remaining 50% of Joyce and Maryani are both owned by Realm Energy (BVI). Together the Ilawa and Wegrow Concessions comprise approximately 360,000 acres and will increase LNG's net Polish shale gas acreage by approximately 180,000 acres. This acquisition provides LNG one of the larger acreage positions in the Baltic Basin.
LNG will assume Source's obligations and pro rata 50% financial commitments in the concessions. These financial commitments are limited in 2011 and 2012 and do not require drilling or major capital expenditures. The closing of this acquisition is subject to a number of conditions, including the completion of due diligence, and is scheduled to close on February 14, 2011.
The Baltic Basin in Poland is one of the most exciting and prospective shale gas development arenas in Europe. These two new concessions along with LNG's existing acreage are within the core of the Baltic shale gas basin activities, adjacent to or in close proximity to the concessions being evaluated by ExxonMobil, Marathon, ConocoPhillips, ENI, Talisman and LNG through its ownership in Saponis Investments. LNG will participate in over 1,100,000 acres of core Baltic Shale acreage, increasing LNG's existing net land position from the 146,000 acres in Saponis to approximately 326,000 acres with this acquisition.
During 2011, in Poland LNG will be participating in three vertical wells in the basin through its ownership of Saponis, the first of which is nearing the end of drilling operations. New and reprocessed existing 2D seismic will be undertaken to further LNG's technical understanding of the Silurian/Ordovician gas bearing shale intervals within the newly acquired Ilawa and Wegrow concessions.
"The current drilling and development activities in Poland will be of substantial benefit to LNG over 2011 and 2012 as numerous new wells are drilled in the basin by various operators." commented Dave Afseth, President & CEO of LNG. "We are seeing very encouraging information from our first well being drilled and are excited about the technical characteristics, initial response and economic gas prospectivity of these shales as they are rapidly defined and developed in the basin"
