London-listed San Leon Energy has formed a strategic partnership with US company Halliburton to prove the unconventional gas potential of the SW Carboniferous basin in Poland.
The pair signed a memorandum of understanding to develop a strategic relationship to jointly explore and develop the unconventional gas potential in San Leon's Wschowa, Gora and Rawicz concessions.
San Leon noted that the strategic partnership would only cover the Carboniferous and deeper sections of the concession areas, and not the shallower Permian Rotliegendes and Main Dolomite sections.
Under the agreement, Halliburton will carry out and fund a diagnostic fracture injection test (DFIT) on the Siciny-2 well, on the Gora concession, during the second quarter of the year.
It will then have the option to carry out and fund a minimum two-stage vertical hydraulic fracture in the well, with San Leon paying 50% of the wholesale fracturing fluid cost to Halliburton.
Under the agreement San Leon said it would fund other third party costs on the well-site, such as security and waste disposal, in connection with the DFIT and hydraulic fracture.
Subject to the execution of a further binding agreement, Halliburton will then have the right to earn up to a 25% working interest in the Carboniferous and deeper sections of the Polish concessions by funding the cost of two vertical exploration wells.
It will have 120 days following the hydraulic fracture of Siciny-2 to elect to drill the first well which will give it an initial 12.5% stake.
It will then have a further 120 days following the hydraulic fracture of the first exploration well well to elect to drill the second well and increase its stake in the Carboniferous and deeper sections of the concessions to 25%.
"We are very excited about our evolving relationship with Halliburton which will help us prove the huge resource potential of the Carboniferous unconventional gas play across our vast acreage position in the SW Carboniferous basin in Poland,” San Leon chairman Oisin Fanning said in a statement on Monday
“This relationship is further proof of our strategy of creating value through strong technical effort followed by the drill bit. Halliburton brings the expertise and capabilities to prove the potential of the Carboniferous and quickly take the project from exploration to development."
San Leon estimates the net prospect resource potential of the Carboniferous play on its concessions in Poland to be over 60 trillion cubic feet of recoverable gas.