3Legs CEO Says Pilot Programme May Be Ready in Two Years

CEO of 3Legs Resources Peter Clutterbuck has said that a pilot programme on its Lebian well in Poland could be ready within the next two years, though full-scale development may not be viable for several years after that.

Speaking to Bloomberg at the IHS CERAWeek conference in Huoston, Texas, Mr. Clutterbuck said that full-scale development may taken five to seven years.

"I think it’s going to take a couple of years from where we are across the basin with the industry at the moment into pilot development and then a couple more years after that from pilot development into a commitment to full-scale development," he said. "So, a full-scale development is unlikely to occur before five years or so and more likely, six maybe seven."

He said that the company had been pleased with the flow rates on its Lebian well, despite a surprise with the company's second well in Poland, the Warblino LE-1H, which the company had expected to be the more successful well. The reason for the lack of success on the Warblino well was something the company was still figuring out, he said.

"We were very pleased with the first well we drilled which was the Lebian well and we got a good flow rate out of that. We tested it for a couple of weeks. And we were extremely pleased with the frack operations we had done which delivered what the design was in terms of the frack engineering and we’re also done on time, on budget, without any environmental consequences so that was very successful in our view.

"The second well, we thought was going to be a better well in terms of flow rate and certainly the sub-surface data indicated that we had a good quality pay there in the shale and the test results were disappointing and we’re still trying to figure out why; it’s one of those learning curve things."

Shale exploration in Poland, he said, was more attractive economically than that in the US, he told the interviewer, which was evident by the fact that many US explorers had switched their attentions from shale gas to shale oil. Despite higher operating costs in Poland, the gas prices in Poland made shale gas exploration in the company more financially advantageous.

"The well costs may be 50 per cent higher or could even be double the cost—somebody said today three times the cost of an American well or a US well—but that’s completely overshadowed by the fact that the gas price is four times higher. "

3Legs is the operator of both wells, located in the Baltic Concession in Poland, but ConocoPhillips holds the right to a 70 per cent interest in the concession in exchange for funding at the initial stages.