San Leon Signs Farm-Out Agreement with Horizon for Polish Concessions

Ireland-based San Leon strengthened its cooperation with Horizon General to evaluate the commerciality of the unconventional Main Dolomite play in Poland. The farm-out covers San Leon’s expected costs to fracture the Sosna well and drill two wells in the Torzym and Cybinka areas.

Horizon will acquire a 22.5% working interest in San Leon’s Cybinka and Torzym Concession in the Permian Basin. In return for the interest, Horizon committed to fully fund San Leon’s costs related to the Sosna-1 exploration well and to the Torzym well. Gross costs could be as high as €13.5 million.

‘San Leon and Horizon shall use reasonable endeavors to frack the Sosna well and spud the initial Torzym well by 31 August 2014,’ reads a note released on Monday.

Upon completion of the above work programme, the partners would be San Leon (22.5%, operator), Horizon (22.5%), Romgaz (30%), and Sceptre Oil & Gas (25%).

“Success in these operations will deliver material upside to San Leon's holdings in the Concession at no cost to the company and will have a direct read across to our other blocks in the Permian Basin,” Oisin Fanning, Chairman of San Leon, commented.

Earlier this month, San Leon completed the three-stage frac and testing programme at Rogity-1 well on the Braniewo S Concession in the northern Baltic Basin.