Notice on SAPONIS INVESTMENTS SP. z o.o.: LEBORK S-1 Hydraulic Stimulation Results

08.11.2011 | Pressrelease

Approximately 43% and 50% of the stimulation fluid was eventually recovered from the Cambrian and Ordovician shales respectively. The reduced amount of proppant placed in each zone was not enough to provide effective conductivity, allow conclusive production tests, or provide the assessment of meaningful reservoir parameters.

As predicted, the reservoir was over pressured but will require higher pressures to hydraulically stimulate the shales than initially designed. It appears that both the Ordovician and Cambrian shales have complex fracture matrices, which were predominantly responsible for the reduced amount of proppant placed. It is expected that this complex matrix will be a positive characteristic to the development of this shale play, as it will provide a larger contact area to increase recoveries and overall production.

Significant data was acquired from the stimulations on both zones that will aid in the re-stimulation designs for future Lebork operations and further development within the other concessions.

Although a comprehensive test of each zone was not realized at this time, the Saponis partners are encouraged by the flared volumes and presence of methane, ethane and propane in the gas samples.

In order to properly test the shales in the Lebork S-1 well, an optimized hydraulic stimulation program design across the same intervals is underway and may require a higher pressure stimulation utilizing a high pressure tubing string. A suitable stimulation string cannot be delivered to the location before cold weather sets in, postponing the re-stimulation and testing of the well until spring 2012. Consequently, through the winter, additional testing and simulation will be undertaken with in-house and industry specialists to design a stimulation program that will further refine the stimulation parameters to provide effective conductivity, unlocking the productivity potential of this shale play. In addition, due to similar cold weather concerns, it has been decided to postpone the Wytowno S-1 and Starogard S-1 hydraulic stimulations to the spring of 2012. 

The acquisition of the previously announced 2D seismic program, which consists of about 407 km on the concessions started on October 8th, 2011. The objective of the seismic program is to further define basin structure and burial history as well as to aid in the selection of future well locations.

RAG holds an 26.3% interest in Saponis Investments. The other shareholders are BNK through its subsidiary BNK Poland Holdings BV, Sorgenia E&P SpA and LNG Energy through its subsidiary Kaynes Capital.