San Leon has completed its work obligations on their Zag Reconnaissance License in the western part of the highly prospective Tindouf-Reggane Basin (known as "Zag" on the Moroccan side) in Morocco. As a result of the positive results received from this work the Company has decided to continue exploring Zag and will commence negotiations with ONHYM in the very near future to upgrade the Reconnaissance Licence to a full Exploration License.
San Leon Energy's high resolution aeromagnetic survey, which was integrated with surface and subsurface data, indicated some very large structures; including a 60 km long anticline with the potential for hydrocarbon reserves.
Several significant discoveries have now been made on the Algerian side of this basin complex by Repsol and partners RWE DEA, Sonatrach, and Edison. The most recent discovery by the Repsol Group was in their North Reggane concession with a well that flow tested 629,000 cu m/day (22.2 MM cu ft/day). Repsol's holdings have been reported to be 145 million boe on the eastern side of the Tindouf-Reggane Basin.
The Moroccan side of the Tindouf/Reggane Basin has remained virtually unexplored but since the petroleum system has been shown to be geologically similar across the vast basin, San Leon hope to make similar discoveries in Morocco as Repsol has in Algeria. The Board is also of the opinion that Morocco has arguably one of the best petroleum licensing regimes in the world.
The Board are also encouraged by the recent RWE DEA farm-in to the license adjacent and to the north of San Leon's Zag License. This is RWE's first move into Morocco and is seen by the Board as highly encouraging.
San Leon operates the Zag Reconnaissance License with a 50% stake and partner Island Oil and Gas Plc has a 20% interest. The other partner is Longreach Oil and Gas with 30%.
Phil Thompson, CEO of San Leon Energy commented, "Our aeromagnetic survey has fully justified the management team's belief that the Zag (Tindouf) Basin, and our license in particular has potential.
"When combined with the discoveries on the Algerian side of the basin and the highly attractive terms currently in place throughout Morocco, we could only be optimistic.
"The next task is to identify opportunities to further narrow drilling targets; unlocking what we believe to be serious value in this license. The results from the aeromag, whilst very early, are very exciting. With excellent terms currently being offered in Morocco, we look forward to the future with confidence."
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