Aurelian spuds, ends Romanian sale

Siekierki: The Krzesinki-1 well is the fourth to take place on the Siekierki tight gas project - the Trzek-2 well is pictured here.

London-based Aurelian Oil & Gas spudded its first Siekierki south-west well earlier this week as it finalised the sale of its non-core Romanian interests to Raffles Energy Netherlands.

The Krzesinki-1 well is expected to reach its target depth of 4150 metres early in the fourth quarter of 2011 and is targeting mid case net resources to Aurelian of 44 billion cubic feet with an upside case of 465 bcf

The forth well to be drilled in Aurelian’s greater Siekierki appraisal programme will test a structural high 6 kilometres south west of where the other Siekierki wells – Trzek-1, -2 and -3 had been drilled.

In an announcement, Aurelian said the well was on trend with a number of conventional producing fields developed by PGNiG to the north and FX Energy to the south.

“It is therefore possible that a discovery could be developed without any requirement for the fraccing technology which was utilised in the core area,” Aurelian said.

The project is located on the Poznan licences – owned by a joint venture between Aurelian (90%) and Avobone NV, a subsidiary of the Indofin Group.

Aurelian also announced the conclusion of the sale of its Romanian non-core interests for an initial payment of €6.8 million ($9.8 million) plus future potential payments.

The purchase price was made up a base cash consideration of €5.3 million plus a further cash consideration of €1.55 million relating to final working capital and other completion adjustments.

The company will also receive payments of €50,000 for every billion cubic feet of gas discovered and €300,000 for every million barrels of oil discovered based on the volumes of proved and probable reserves approved in the relevant Field Development Plans.

The projects sold, after the company received regulatory and third party approval for the deal, include the Bilca Gas Project Area of the Brodina Concession, the Suceava Concession, and the Bacau North Areas (A and B) of the Bacau Concession.

The structure of the deal adjusts up and down depending on future gas prices and final production achieved from the Bilca and Climauti Gas Project Areas.

The sale allows company resources to be redirected towards Romanian Carpathian Thrust Fold Belt Core Area, with company chief executive Rowen Bainbridge saying the company was pleased with the value of the deal.

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