San Leon Energy is pleased to announce that it has signed a binding Letter of Intent (the "LOI") with Aspect Energy (through its subsidiary, Horizon General Ltd, "Aspect") under which Aspect will acquire a 22.5% working interest (half of San Leon's current interest) in a portion of San Leon's Cybinka and Torzym Concessions (the" Concessions") in Poland's Permian Basin (the "Area of Interest" or "AOI"). The Area of Interest is defined based upon the paleogeography of the Main Dolomite formation, to include areas north of the Platform edge, a shallow water depositional area, into the deeper basin deposits. The AOI and current drill ready prospect inventory have all been defined using San Leon's 220 km2 3D survey acquired in 2010.
The terms of the LOI require Aspect to carry San Leon's interest in the drilling of two exploration wells, targeting oil in the Main Dolomite formation. The first well is estimated to be drilled on the Torzym AOI in Q1 2014. The location of the second well will be determined by results of the first well and continued evaluation of existing 2D and 3D seismic, and well data. The second well will be drilled on either the Torzym AOI or the Cybinka AOI. The farm-in is subject to, amongst other things, the execution of a final farm-in agreement and partner approval of the transaction.
The AOI targets toe-of-slope plays. The defined toe-of-slope prospects are targeting conventional high porosity/high permeability reservoirs in the Main Dolomite formation similar to Poland's largest oil fields such as the Lubiatow field. Several toe-of-slope prospects have been identified in the 2010 3D seismic survey. The prospects are defined using detailed seismic attribute analysis focused on identifying high porosity zones. Such methods significantly reduce the exploration risk of this play.
Upon completion of the two exploration wells, the working interests in the AOI will be 22.5% San Leon, 22.5% Aspect, 30% S.N.G.N. Romgaz S.A. ("Romgaz"), and 25% Sceptre Oil & Gas Limited ("Sceptre").
The remaining area on the Concessions which is excluded from the LOI (the "excluded area") will continue to be held as to 45% by San Leon, 30% by Romgaz and 25% by Sceptre. The excluded area is focused on the Platform facies of the Main Dolomite in which the Sosna-1 exploration well was drilled by San Leon in 2012. San Leon and its partners are currently evaluating the commercial viability of further testing of the Sosna-1 well to prove the unconventional potential of the Main Dolomite along the platform edge.
Oisin Fanning, Chairman of San Leon, commented:
"We are delighted to have Aspect join us in Poland. The success of Aspect in the region brings an experienced and successful partner to our conventional exploration program in the Poland's Permian Basin. The two well carry to explore the oil potential of the Main Dolomite in the Cybinka-Torzym Concessions, acquired from Aurelian Oil & Gas, is a great step forward for our exploration activities in Poland."