Aurelian Acquires Stake in Polish Concessions
Aurelian Oil & Gas PLC, the exploration and production company specializing in Central Europe, on Monday signed a Heads of Agreement with McCallan Oil & Gas (UK) Limited, a private UK company 51% controlled by the Vancouver Canada-based company, Regent Ventures LTD. and its wholly owned Polish subsidiary, Eurogas Polska Sp. z o.o. in relation to Eurogas' interests in southeast Poland. Aurelian will earn a 25% beneficial interest in Eurogas' concessions, which will be operated by Polskie Gornictwo Naftowe i Gazownictwo SA (PGNiG), the exploration and production arm of Polish Oil and Gas Corporation, the Polish State Company (POGC).
A new Mining Usufruct Agreement (MUA) is currently being negotiated between PGNiG and the Polish licensing authorities. The concessions are in the process of being transferred from Eurogas to PGNiG. A new joint operating agreement (JOA) will be executed, under which PGNiG will hold the MUA and the concessions on behalf of Aurelian and Eurogas, and under which the interests will be:
- PGNiG (Operator), 50%
- Aurelian, 25%
- Eurogas, 25%
The concessions, which cover 3,481.5 sq. kms. are located in the southeast of Poland in the heart of the Carpathians where oil and gas have been produced since the mid-1850s. The Przemysl field, Poland's largest gas field with reserves of 2.43 tcf (70 bcm), lies adjacent to the northeast.
Several oil and gas fields lie within the concession boundaries although these are not included as part of the concessions. These fields are mainly old and shallow, although one (Strachocina) has recently been converted for gas storage purposes. The existence of the fields however indicates the presence of an active hydrocarbon system, consistent with that of the producing Carpathian trend.
Only six modern seismic lines exist within the entire concession area, but these do indicate the presence of potentially large hydrocarbon-bearing undrilled structures at depth. It is anticipated that new seismic will be undertaken and a well drilled during the first 3-year term of the concessions.
The arrangements with McCallan and Eurogas provide for Aurelian to earn its 25% interest by paying for Eurogas' 25% share of obligatory expenditures incurred by the joint venture during the first 3-year term of the concessions. Under a separate agreement, Aurelian will provide technical management services to Eurogas in relation to the concessions.
Michael Seymour, Managing Director of Aurelian Oil & Gas PLC commented:
"These concessions, which are almost unexplored, contain one of the most prospective areas in Poland and, indeed, the whole Carpathian oil and gas producing trend. The Carpathian trend, which extends from Austria in the west, through the Czech and Slovak Republics into Poland, the Ukraine and Romania, is a prolific oil and gas region that has been producing since the middle of the nineteenth century. This addition to our portfolio of projects is complimentary to our other interests in Poland and the Carpathians. We are very pleased to be joining Eurogas and PGNiG and look forward to the commencement of joint operations."
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Company: McCallan Oil & Gas (UK) Limited more info
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