San Leon Energy Plc plans to develop Polish shale gas assets as soon as possible after Talisman Energy Inc. exited the country and Marathon Oil Corp. said it would follow suit, the company’s exploration director said.
San Leon rose as much as 15 percent in London today to the highest level in more than two months after saying it bought Talisman’s interest in Poland’s Baltic basin. Dublin-based San Leon will become operator of three licenses in the area and signed a deal with United Oilfield Services Inc. to hydraulically fracture a well in the so-called play, it said.
About 25 percent fewer exploration wells were completed last year in Poland than forecast amid complex permitting rules and the government’s announcement that prospective output will be taxed.
Over the past year, Exxon Mobil Corp. pulled out of the eastern European nation, citing disappointing drilling results, Talisman exited following a change in strategy and Marathon said yesterday it is evaluating disposal options for its licenses there. Chevron owns Polish acreage at Grabowiec, Zwierzniec, Frampol and Krasnik, and owns a subsidiary Chevron Polska Energy Resources Sp Zoo employing 30 people in Warsaw.
“I don’t think the majors have the mind-set and the patience to explore and prove these types of plays,” John Buggenhagen, San Leon’s exploration director, said in an interview in Warsaw today. “We can now begin to move forward to prove this play.”
San Leon rose as high as 7.9 pence, the most since March 5, and was at 7.61 pence at 3:45 p.m. in London, valuing the company at 142.5 million pounds ($221.2 million).
Exit from Poland by Talisman and Marathon is not a setback for exploration as work on their licenses will continue, Deputy Environment Minister Piotr Wozniak said in Warsaw today.
“Personally, I’m sorry that renowned companies like Talisman and Marathon are leaving, but from our point of view the question who will carry on work on their acreage is of secondary importance,” Wozniak said. “A bad signal would be if the licenses were left without an owner.”
Following the completion of six exploration wells on its 11 licenses, Marathon decided to leave the country after “evaluation of exploration activities and unsuccessful attempts to find commercial levels of hydrocarbons,” the company said in an earnings release yesterday.