San Leon well disappoints

29th Sep 2011 08:28

Europe- and North Africa-focused oil and gas group San Leon Energy has had to plug its first low-cost conventional exploration well in the Nida Concession as a dry hole, at a total estimated cost of 700,000 euros. The disappointing results came after the well, in southern Poland, was successfully drilled to a total depth of 1,000m and encountered several reservoirs in the underlying Jurassic seam with gas shows and high quality reservoir sandstones with gas shows in the Cretaceous seam.The target of the well was a 3-way faulted structure in the Cretaceous sandstones, a previously untested carbonate buildup in the Jurassic, and potential reservoirs in the underlying Jurassic section.The Jaslo DIR-700 rig is plugging the well and will immediately move the rig to the Belvedere-1 location which is ready to receive the rig. The Belvedere-1 well is targeting a four-way closure within the Cretaceous and Jurassic horizons.Oisin Fanning, chairman of San Leon: "Whilst this is a disappointing result for the company, it represents a very small part of the company's portfolio and we continue to believe that there is the potential to drive near term cash flow from some of the smaller, shallower and low-cost prospects in our inventory and look forward to spudding the Belvedere-1 prospect very shortly."This is an exciting time for San Leon; the company has just spudded the Lewino 1G2 well in the Gdansk-W concession in the Baltic Basin in Poland, which is fully carried by Talisman Energy, and has an active and fully-funded drilling programme for the remainder of 2011 and 2012."The share price fell 10.29% to 15.25p by 08:46.NR