Saponis Spuds Wytowno S-1 Well in Baltic Basin
Saponis Investments Sp. Z o.o. has reportedly started the Wytowno S-1 shale gas exploratory well in the Baltic basin in Poland.
Saponis is to drill the well on the Slawno concession to an Ordovician-Silurian primary objective at 3,315 m true vertical depth. It is the first exploration well to meet investment commitments for Saponis’ three concession areas; Slawno, Slupsk, and Starogard.
Saponis is using the same drilling contractor crews and equipment that drilled both ConocoPhillips/Lane Energy wells, with the 1st well being located less than 60 kilometres (37 miles) from Wytowno S-1 wellbore. The primary target objective for all wells has been the Ordovician/Silurian Shales within the Baltic Basin.
The Wytowno S-1 well, with a TVD of 3315 m, is anticipated to be drilled within 45 days, with an AFE cost of US$10MM to drill, case, hydraulic fracture complete and test the Ordovician/Silurian gas shale formation deliverability.
The Wytowno well is also located close to the existing Polish natural gas distribution pipeline system. This proximity to the local pipeline distribution grid should provide rapid and relatively inexpensive access to the lucrative Polish gas market, where the 2010 natural gas prices have recently averaged approximately $9.00 per thousand cubic feet (Mscf).
In 2008, Saponis applied for Starogard, Slupsk and Slawno concessions located in Northern Poland which total about 730,000 gross acres. The concessions were awarded in June 2009.
Saponis was initially held 80% by BNK Petroleum Inc. and 20% by LNG Energy Ltd. In October 2009, the BNK farmed out its 80% interest in the concessions to Rohöl-Aufsuchungs Aktiengesellschaft ("RAG") and Sorgenia E&P S.p.A.
Under the farm-out agreement RAG/Sorgenia paid $3 million to BNK and will each pay one-half of 73.33% of the next $25 million in total exploration costs, BNK will pay 6.667% and LNG will pay its 20% share.
RAG/Sorgenia will earn a combined 53.23% interest in Saponis, BNK’s interest will reduce to 26.67% and LNG will maintain its 20% interest.
Source: LNG Energy