Horizon makes progress in stalled Polish deal
Calgary-based Horizon Petroleum has completed the takeover of two concessions in Poland from Ireland’s San Leon, the company reported August 21, noting it aimed to close the acquisition of three more permits within two months.
The company, which is targeting high-netback gas assets in Europe, entered a deal in September 2017 to buy San Leon’s Bielsko-Biala, Buchowice, Cieszyn, Kotlarka and Prucise concessions in Poland. It agreed to pay an initial $0.9mn cash payment as well transfer C$1mn ($750,000) of its shares. After failing to find shale gas in Poland, San Leon went off to invest in Nigeria.
The transaction was held up by Polish regulation, however, and Horizon was only qualified by authorities to explore for oil and gas in the country in May. Following this milestone, Horizon has now secured two of the concessions, and intends to close the purchase of the remaining three within 60 days.
“The closing of the acquisition shows Horizon continues to make progress on its business plan of developing a natural gas production company focused on opportunities in Europe,” the Toronto-listed firm said.
One of concessions Horizon has now obtained is Bielsko-Biala, which comprises the Lachowice gas discovery. Lachowice holds 36bn ft3 of gas in proven reserves and 171bn ft3 in best-estimate contingent resources.
Lachowice will be Horizon’s first focus for development. It plans to drill its first well there in the second quarter of 2020, targeting an output of 3mn ft3/day. It will sink two more wells in late 2021, to ramp up production to 17.5mn ft3/day. With additional drilling, the field is expected to flow an eventual 30mn ft3/day.
Horizon said in August 2018 it had signed a letter of intent (LoI) with an unidentified partner in Europe on joint development of Lachowice. This partner is slated to cover all capital expenses until first gas is achieved in return for a 50% interest, according to Horizon.