Polish Shale Gas Estimates Likely to be Recalculated

National Gas Europe recently interviewed Pawel Poprawa, Chief Specialist & Head of Petroleum Geology Laboratory at the Polish Geological Institute.

Mr. Poprawa recapped shale gas exploration efforts in Poland to-date and suggested that an uncoming Polish-American report will include a more conservative evaluation of technically recoverable shale gas resources in Poland, than the 5.3 TCM (187 TCF) estimated by EIA last spring.

Pawel Poprawa: The first well was spudded one and a half year ago. Up to now 14 wells have been drilled on the areas where shale gas occurrence is anticipated, with the majority bored in Pomerania, mainly West of Gdansk, several in Lubelskie and one in Masovia. In 8 out of 14 vertical wells, hydraulic fracturing programs were undertaken.

Quality test are promising: in other words our main geological assumption that shale formations do contain gas has been validated. In two cases, both in the Pomerania region, full tests, including multi-stage fracturing along a horizontal wellbores, have been conducted. Quantity tests have demonstrated flow rates that are not fully commercial.

NGE: These two full tests have been conducted by Lane Energy, the Polish arm of 3Legs Resources plc. Since mid-October, 3Legs shares have fallen markedly. To what extent are these initial tests designed to measure productivity?

Pawel Poprawa: The first wells are just an introduction to the long process of recognizing shale gas basins and their local unique characteristics. The technical approach that was applied in these firsts tests was copied from other basins, in this case from the United States. Based upon the observations recorded, the applications must be modified and adapted to the local conditions that we have in Poland.

It`s worth noting that the first gas flow test by the Lane Energy wasn`t bad, measurements were just under average US rates and they fuelled shares price growth. The second test was rather unsuccessful.

In the coming years new technological approaches with various technical parameters will be applied in order to augment volumes. We will then know if gas production will be commercial. Let me add; this is just proof that shale gas reserves are easy to find, but much harder to exploit.

NGE: As you mentioned, Lane Energy announced that some values including TOC and porosity compared favorably to US shale plays. However, the firm encountered challenges for drilling and completion, including frac design. What kind of geological challenges could they have encountered?

Pawel Poprawa: Of course, I don`t know any details, but certainly some elements of geological structure such as faults and folds plus variable system permeability, may have reduced the initial effectiveness. However, this is just the beginning of the road;  the road which shall lead to gradually increasing productivity.

There are no reasons for assuming that commercially viable production will not be possible. First step is always the hardest.

NGE: What steps do you expect in the next year and in 2013?

Pawel Poprawa: We expect a rapid intensification of exploration efforts: 100-150 wells, probably 200, in the course of two to three years. Numerous stimulations. The gathered data should allow us to prepare a plausible description of resources and profitability.

NGE: Estimates of shale gas resources in Poland vary from 1 TCM to over 5 TCM. The Polish Geological Institute and American experts have pledged to publish more precise estimate of resources this fall. When will you finally release this document?

Pawel Poprawa: Yes, we are late. The delay was caused by problems with incompatible formats of data coming from core samples secured during communist times. We will publish our report in several maybe a dozen or so weeks. 

NGE: Can you reveal whether the resource estimate will be closer to the lowest or highest number?

Pawel Poprawa: The initial assessment of 5.3 TCM in technically recoverable natural gas resources in Poland has its faults and its accuracy may be a matter for discussion. This is a general and global report covering a number of countries: the authors had no time to analyze separate regions in details.

In my personal opinion, when it comes to the Polish shale gas, the report overestimates acreage and production volume per unit. Generally, this case is the most optimistic scenario and more conservative scenarios will be probably be more accurate.

 


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