PrimeGen announced today that its wholly owned Russian subsidiary OOO Verkhne Michayu Group ("Verkhne") has been awarded the Layevozhskoye oil and gas exploration license in the Baltic Basin in Western Russia.
The vast majority of the area of the Baltic basin is under license or under application by numerous domestic and international companies. This award therefore gives PrimeGen access to a highly desirable region, during a period of considerable competition. The concession totaling 2065.32 km2 is located in the Baltic Basin western Russia including portions of license blocks 36, 45, 46, 73 and 74.
The License is valid for up to 10 years and covers a work program which includes geological studies, seismic acquisition and a one well drilling obligation. If a discovery is made the term extends to 25 years with an additional 25 years, if required.
The primary reason for applying for this license is the high potential of the Paleozoic shales that could lead to a commercial shale gas development similar to the Barnett Shale in the United States. In addition, PrimeGen believes that while testing the shale gas potential of the area there are conventional oil targets above and below the shale intervals further reducing the risk of exploration.
Robert Charlton, CEO of PrimeGen commented, "We are excited to expand our portfolio in Russia into the underexplored Baltic Basin. There is a potentially significant unconventional gas play in the Paleozoic shales that we believe will unlock an overlooked high potential play in the wider region. We also believe there is significant potential that has been overlooked in several conventional targets on the license."
In the initial exploration phase, an environmental study is planned to be carried out. Taking account of 2D material already available, a 3D seismic test is then to be conducted across an area 500 square kilometers in size. In addition, an exploration well is to be drilled once the seismic testing has been completed.
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