Horse Hill Well-1 Set for Spudding. The Americans Like Magellan Petroleum and This Story

The Horse Hill 1 Well is getting ready for spudding as all permits are now in place. 

My analyst has produced a very good geological report on the Weald Basin. Looks very promising for more oil. 

All eyes will now be on the JV partnership. The participants in the Horse Hill-1 well are HHDL (Operator) with a 65% working interest and Magellan Petroleum Corporation with a 35% interest. Co-investors in Horse Hill Developments are Alba Mineral Resources PLC, Regency Mines PLC, Angus Energy Ltd, (Magellan's partner in the project) Solo Oil PLC, Doriemus PLC, Stellar Resources PLC and UK Oil & Gas Investments PLC.

It is worth noting that Magellan Petroleum, Listed on the NASDAQ code MPET:NAQ has seen its share its share price rise by over 95% this year.

What is also interesting is that since the 3rd June 2014 when Magellan announced its plans for two UK wells which included Horse Hill, the share price has risen by 14%

So its pretty interesting, not just UK investors will be looking out to see how Horse Hill gets on, but also are friends across the pond. 

http://www.magellanpetroleum.com/media-center/press-releases/detail/184/magellan-announces-plans-for-two-uk-wells-in-2014

ASX listed Cossack Energy Join San Leon Energy in the Bieszczady Project South East Poland, with Well Nieb‐1 set for testing

Highlights:

• Cossack has proceeded to Settlement on the Bieszczady Project in Poland.
  
• Cossack has now diversified its portfolio into two significant projects located in the Carpathian
  foothills region and is now focused on the development on the most immediate prospects located in
  Poland.
  
• Anticipates a near term flow testing program on the Nieb‐1 discovery well to prove up existing
  Contingent Gas Resources to Reserves, followed by a fast track program to production.
  
  
  Acquisition of Polish Project Completed
  Cossack Energy Limited (“Cossack” or “the Company”), the oil and gas explorer with assets in the world class North Carpathian oil and gas province stretching across the borders of Poland and Ukraine, is pleased to announce that it has executed a Share Purchase Agreement (“SPA”) with Iskander Energy Corporation to finalise the purchase the Bieszczady Project in Poland.
  
  Bieszczady Project Acquisition
  As announced at the end of May, Cossack executed a Binding Heads of Agreement (“HoA”) with Iskander Energy (“Iskander”) to acquire their complete 24% working interest in the Bieszczady Project (“Project”) located in south‐east Poland. As contemplated in the HoA, the Company paid a non‐refundable deposit of US$200,000 to Iskander in early June and moved into an extended period of exclusivity which afforded the Company further time to conduct more in‐depth due diligence on the Project up until early July 2014.
  In early July Cossack confirm that it had, with the exception of a couple of minor items, completed its in‐ depth due diligence within the period of exclusivity and elected to proceed with the acquisition, and delivered to Iskander a Notice to Proceed with the transaction at that time.
  Cossack can now further confirm that it has finalised its in‐depth due diligence and has completed the necessary formalities, including execution of the SPA, and has proceeded with the acquisition with immediate effect.
  These formalities contemplated by the HoA were the negotiation of a formal SPA which was executed with Iskander on 30th July after which the Company moved immediately to settlement of the transaction (“Settlement”) which was via the acquisition of a Polish holding Company called EuroGas Polska Sp. z o.o., the owner of the 24% working interest in the Joint Operating Agreement (“JOA”) for the Project. 
  
  
  
  Settlement was concluded as contemplated by the HoA with the payment of US$500,000 (plus working capital adjustments).
  The remaining obligations under the HoA subsequent to Settlement encompass the requirement for Cossack to pay the final instalment of the US$1 million purchase price being US$300,000 payable to Iskander (less any adjustments) by 31 December 2014.
  Bieszczady Project Description
  Cossack has now acquired a 24% working interest in the Bieszczady Project which is made up of eight (8) contiguous licences covering an extensive area of 3,546 km2 in the far south‐east of Poland bordering on Ukraine and Slovakia in the foothills of the Carpathian Mountains.
  Polskie Górnictwo Naftowe i Gazownictwo (“PGNiG”), who is the largest oil & gas exploration and production company in Poland, is the 51% JV owner and Operator of the Project with LSE AIM listed San Leon Energy plc as the other 25% JV Partner.
  Immediate Well Test to prove up Contingent Resources
  The program of works for 2014 proposed by the Operator (PGNiG) is concentrated on a wide perforation and production test of the Niebieszczady‐1 (“Nieb‐1”) discovery well located in the Tarnawa Central prospect containing the contingent resources which was drilled and tested in 2011.
  Final timing of the proposed program will be determined at a meeting of the Joint Venture Committee, proposed for the end of July 2014 in Warsaw. It is expected that the program will be initiated in the second half of the 2014 calendar year.
  Development scenarios are highly advanced and would be via a dedicated processing facility and a 17km lateral pipeline to interconnect into an existing metering facility located on the high pressure pipeline system.
  Please also see ASX Announcement and associated presentation released on 5th June for more background information on the Bieszczady Project.
  Bieszczady Project Contingent & Prospective Resources
  Tarnawa Central, one of five prospective fields identified in the Project area, has been initially flow tested by means of the Nieb‐1 discovery well and will be the subject of an extended production test in the upcoming half year with the intention of converting the Contingent Resources into Reserves and is estimated by RPS Canada in their Report with an Evaluation Date of 15 November 2012 to contain the following Contingent Resources:‐
  
  

Shale Fracking in Poland…………3Legs Have Cracked It,,,, Land Valuations Set to Soar

3Legs Resources (LSE:3Leg) Lublewo LEP-1ST1H lateral well, Game Changer & Major Value Kicker for Poland’s Shale Gas Sector.

Incredible news out this morning by AIM listed Polish shale gas exploration company 3Legs Resources (LSE:3Leg) who have reported the results of their Baltic Basin, Lublewo LEP-1ST1H well stimulation. In partnership with US Major ConocoPhillips, 3Legs have successfully completed stimulation over 25 stages of their Lublewo well, in what is a landmark technical achievement.

For investors in Poland’s shale gas sector, this news is of major significance as 3Legs and ConocoPhillips have not only completed a successful stimulation but have worked out the right fluid combination to penetrate the Baltic Basin shale structure.

Getting the fluid combination right is the Holy Grail for a successful fracture and major issue to date in Poland has been working to discover just what is the right fluid combination to deliver a successful frack and one that will be able to unlock Poland’s huge shale gas reserves.

Cross-Linked Gel

On the Lublewo well, 3Legs have used a cross-linked gel a step back from the slickwater fluid that was used on the Lebien LE-2H well in 2011.  The use of a cross-linked gel was designed to reduce the amount of fluid required per stage, while maximising proppant delivery. It appears that this hybrid fluid systems has been able to control fluid loss to increase the fluid efficiency, provide good fracture conductivity, keep polymer concentration to a low level and help eliminate proppant flowback ensuring the frack can be stabilized.

Poland’s Largest Successful Multi Stage Simulation

3Legs, ConocoPhilips & Lane Energy have conducted what is Poland’s largest multi-stage shale simulation. By identifying the correct fluid combination, it appears 3Legs have found a way to keep the proppant in suspension and thus ensuring more proppant gets into the rock structure and penetrates much further (Lublewo delivered 7.7 million lbs of proppant over the 25 stages executed across 1,469 metres out of the available 1,495 metres of lateral section) By using the hybrid gel combination, they have used less water, a factor that is significant in that it reduces costs by making clean up much quicker.

Raises Investment Interest in San Leon’s Lewino-1G2

The other reason why this news is so significant is the Baltic Basin concession owner Lane Energy Poland Sp. Zoo where 3Legs and ConocoPhilips hold a 30% and 70% interest respectively, contracted the Polish company United Oilfield Services (UOS) to drill and frack the Lublewo well. This is important as it means the on the ground experience in Poland’s drilling sector is now gathering pace and where these experiences will certainly be transferred to other companies like San Leon Energy (LSE:SLE). Indeed this news by 3Legs puts a real spotlight on San Leon’s Lewino-1G2 well, which successfully flow tested in January and is now ready for a horizontal well to be spud and where I understand UOS will likely be contracted to spud Lewino (UOS did the successful flow test). I would suspect that San Leon would be approached by a major who off the back of this news by 3Legs would want to have access to one of Poland’s most advanced shale gas wells, where it too could employ similar techniques to bring Lewino into production pretty quickly.

Raising Valuations

On a final note, surely the news out today significantly raises the valuations of Poland’s shale gas acreage. It has been as high as $500 per acre and is today valued at $50 an acre but where a more reasonable valuation after this latest news must be ranging from $1,000 to $2,000, in contrast US shale gas acreage is valued at circa $38,000 an acre. San Leon has interests in nearly 5 million acres of land in Poland of which 1.2 million acres is pure play shale gas.

Shares in both 3Legs and San Leon are up this morning on the back of this great news.