Thursday, October 4, 2012

ConocoPhillips (NYSE:COP) lets go of Shale Options in Poland

According to present operator 3Legs Resources, ConocoPhillips(NYSE:COP) will not be taking over as operator even though it has a 70% stake in three concessions, Cedry Wielkie, Stegna and Godkowo, in Poland's Baltic basin. The discussion is still pending, but ConocoPhillips has not turned in a notice before the expiry date on September 30.

ExxonMobil had also announced some weeks back that it has no intention to continue drilling for shale in Poland and will return two of its six shale-gas exploration licenses. Shale drilling prospects in Poland now look somewhat vague.

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The three concessions in the ConocoPhillips-3Legs deal span about 578,000 acres to the east of the city of Gdansk. Peter Clutterbuck, 3Legs chief executive said last month that even though the eastern Baltic basin is more liquids-prone as opposed to the dry gas in the west, its quality is deemed as “less good”. Since ConocoPhillips will not be taking over, 3Legs will continue their own strategies comprising high-grading their acreage and exploring areas that might contain potential.

ConocoPhillips will be operating in three concessions in the western Baltic basin - Damnica, Lebork and Karwia – spanning across 506,000 acres. 3Legs states that prospects of exploration in those areas look promising due to thickness of the target formations and reservoir rock properties. Equipment and machines are already in the testing phase and due to rig mobilization for the Strzeszewo LE-1H vertical well going on, a spud is expected anytime.

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