ConocoPhillips lets Poland shale option lapse

Lapsed: ConocoPhillips lets Poland option expire

US giant ConocoPhillips will not exercise its option to take over as operator with a 70% stake in three concessions in Poland's Baltic basin, current operator 3Legs Resources said on Tuesday.

The UK-based operator said ConocoPhillips "did not give notice" by the 30 September expiry date, but that the decision was "anticipated".

The news could raise further questions about Poland's shale prospects, coming weeks after ExxonMobil said it planned to return two of its six shale-gas exploration licenses after saying earlier that it had no more plans to drill for shale in the country.

The three concessions in the ConocoPhillips-3Legs deal - Cedry Wielkie, Stegna and Godkowo - lie to the east of the city of Gdansk in a contiguous block of about 578,000 acres. 3Legs chief executive Peter Clutterbuck told Upstream last month that the eastern Baltic basin is more liquids-prone than the dry gas found in the west, but it is regarded as "less good quality".

"ConocoPhillips' decision not to exercise its option on our three eastern Baltic Basin concessions is consistent with our own strategy of high-grading our acreage and focusing our activity on those areas which we believe offer most potential," Clutterbuck said in a statement on Tuesday.

"We are firmly focused on prioritising and further de-risking the considerable areas that offer the most prospectivity in our Baltic Basin acreage, which are situated on our western concessions."

ConocoPhillips has already taken an option to become the operator and 70%-interest holder of three concessions in the western Baltic basin - Damnica, Lebork and Karwia - comprising about 506,000 acres. The US major took over as operator on 14 September. 

3Legs said the western concessions are "most prospective for further exploration, by reason of the thickness of the target formations and reservoir rock properties".

The company said its drilling and seismic operations to date "have increased the probability of success in this most prospective acreage", compared to assessments made at the time of its initial public offering in June 2011.

Operations in the west a proceeding as planned, 3Legs said.

"Testing equipment has been mobilised to the Lebien location, where further testing is due to commence imminently on the Lebien LE-2H horizontal well, it said, adding that rig mobilisation for the Strzeszewo LE-1H vertical well is continuing, with a spud expected within the next week.

3Legs "will be considering its options carefully before engaging in any operations on its eastern concessions", it said.

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