NGFE Interviews: Wolf Regener, President & CEO of BNK Petroleum Inc.

On the heels of an unprecedented shale boom in the United States, oil and gas companies began to look overseas – particularly to Europe - for the same potential yielded by American shale plays.  Though the process has not been as fast paced, European countries such as Poland, France and Germany are showing enormous potential.

This potential is what drew independent oil and gas companies like California-based BNK Petroleum Inc. to begin exploration and research in Europe.  One of the first companies to be awarded concessions for shale gas on the continent, BNK currently holds concessions in both Poland and Germany and is soon to begin drilling test-wells to assess the prospects of these regions.

It’s a big step in the right direction for discovering shale gas in Europe, says Wolf E. Regener, President & CEO of BNK Petroleum Inc.

“We firmly believe that shale doesn’t just exist in North America,” Regener says.  “[European] gas consumption is comparable to that of the US, they have gas production and where there is gas production, you should also have shale rock as source rock.”

Taking those first steps, however, wasn’t easy.  With no previous shale gas track record by any company on European soil, Regener says when first meeting with energy ministers to discuss exploration and development several years ago – in some cases – “it took some convincing.”

BNK was prepared for the ambivalence.

“It wasn’t really on anybody’s mind when we were doing this,” he says from his office in California.  “Our guys did a lot of digging.  We used a lot of different sources: research papers, archives, professors, visits [to sites], etc.  We had reasons for wanting to be there.”

Though the education process took some time, being one of the first companies to conduct research in Europe proved to be an enormous benefit for BNK allowing them to be able to “pick and choose prime acreage.”  It also allowed them to develop relationships with potential partners before anyone else could get their foot in the door and set the wheels in motion for exploration.  Two such partners for BNK were Rohöl-Aufsuchungs Aktiengesellschaft (RAG) and Sorgenia E&P S.p.A.

“[Our company] talked to them before the awarding of concession blocks,” Regener explains.  “They were large enough to have the money to go do this, but they also brought some expertise to the table (RAG owns the largest gas storage facility in Europe) and they’ve also operated in other parts of Europe.  They’re smaller, but nimble.”

LNG Energy Ltd. (who bought a private company and therefore had a right to participate) and most recently private investments from Quantum Partners LP (under the management of well-known investor George Soros) also jumped on board with BNK.

With the financial backing, amped expertise and rigs in place, BNK is expected to begin drilling test wells in Poland on the Slawno and Slupsk concessions this month.

These first wells, Regener stresses, are “science wells” used to determine the economic validity of a shale play.  As opposed to gas wells, these are drilled vertically to collect core samples.  Should these samples show significant gas deposits, the next step is to fracture stimulate the play and attempt to extract gas from the rock.  If that venture is successful, then horizontal drilling begins.

For the Slawno and Slupsk wells, Regener says BNK has budgeted 40 days for coring, and an additional four to six weeks to conduct the sample analysis.

Compared to the booming industry in the US, the European shale ventures may seem a little slow-going.  That’s because – well – they are, says Regener.  Since shale development is new to Europe, all of the rules and regulations with regards to processes such as tendering (for example) haven’t yet been clearly defined, providing some delays in the industry.

“As much as tendering is for the protection of local contractors, it needs to be open to international contractors as well,” says Regener.  “One of our goals is to maintain a really good presence and provide a really good experience in Europe.”

One way BNK could provide a positive experience for Europe is by using western technologies and techniques in the extraction process.

Regener says his company would like to set up “built-for-purpose” rigs that can drill multiple wells from a single pad.  These rigs provide an ascetic benefit in that they aren’t as noticeable in the public eye, but they are also more efficient and cleaner.

Being environmentally friendly is a major concern for BNK.  With a commitment to “use the best industry practice and then some,” Regener says his company’s wells leave a minimal footprint.

Using recycled water, employing as many environmentally friendly frac additives as possible and studying the most recent US fracking regulations allows his company to exploit shale gas in a way that is kinder to the environment in Europe than some of their US counterparts.

Regener also says that shale gas is an important part of the world’s energy future, calling shale gas “a bridge fuel that gets us going in the right direction.”

For now, BNK seems to be steamrolling towards that direction.  Although their Polish wells are still in the “science well” phase, and there is no way of knowing for sure whether these sites will yield significant shale deposits, Regener is confident that their research will not see them come up with nothing.

“From our point of view, we have lots of plays,” he says.  “The more I can spread my risk into good projects, the more likely we are to have success.  If just one works, we have ‘home run’ potential.”