3Legs Resources Plc, the shale-gas explorer that began selling shares yesterday, will be able to show that its wells in Poland are commercially viable in 1 1/2 to 2 years, Chief Executive Officer Peter Clutterbuck said.
3Legs’s six shale-gas exploration licenses in the Baltic basin in northern Poland cover as much as 4.8 trillion cubic meters of gas, Clutterbuck said by telephone. The company has three more licenses for smaller reserves in the south of Poland near the city of Krakow, he said.
3Legs expects to raise about 62 million pounds ($101 million) through the initial public offering on London’s AIM market, he said. The company announced its offer of 190 pence a share yesterday. It has expected capitalization of 161 million pounds and the free float will be about 50 percent, he said.
“What we’re doing now is using the funds raised from the IPO to further explore this region,” Clutterbuck said. “ So far nobody has proved a commercial discovery, but there is an expectation in the industry that this is likely to happen.”
Poland may hold as much as 5.2 trillion cubic meters of shale gas, according to the Energy Information Administration. If extracted, it would cover more than 300 years of domestic consumption.
3Legs has a joint venture with ConocoPhillips for the 6 licenses in the Baltic basin. Conoco invested $45 million in the project and in 2 months will have the option to acquire 70 percent of the joint venture’s assets, according to Clutterbuck. The company is looking for opportunities in other former communist countries in the European Union, he said.
The IPO was brokered by Jefferies Group Inc. Conditional dealings began on the London Stock Exchange yesterday, and regular trading is due to start June 14.