AIM-listed oil and gas producer San Leon has regained 100 per cent ownership of the Gdansk W and Braniewo S concessions, and increased its interest to 50 per cent in the Szczawno concession in Poland's Baltic Basin, an update from the company has shown.
In February 2010, the company reported that Talisman Energy had signed a farm-in agreement to earn a 30% working interest in the concessions in return for certain commitments, including drilling one well in each concession, with the option to increase its interest to 60% by drilling a further well in each concession.
San Leon added that it and Talisman Energy has now signed an agreement whereby San Leon acquired 100% of the shares of Talisman's subsidiary in Poland, Talisman Polska.
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In consideration, San Leon said it had assumed all assets and obligations of Talisman Polska. In addition to the interests in the three concessions, Talisman Polska's assets were valued at an estimated $10m, and included cash and drilling equipment. The company said that Talisman Polska has no debt.
Oisin Fanning, Executive Chairman of San Leon Energy, commented: "Talisman's Poland exit has been inevitable since the company altered its strategy to concentrate on two core areas, the Americas and Asia-Pacific. It became clear to us that we had to regain control of the drilling programme as soon as possible to ensure the Baltic Basin work programme continued."
He added: "The board believe that the deal is beneficial to our shareholders and we look forward to executing a fraccing programme in our Gdansk W Concession. There is still significant and continued industry interest in the Baltic Basin shale gas play, and we expect the results of our fraccing programme to attract further interest from potential farm-in partners."
San Leon's share price was up 11.61% to 7.69p at 14:56 on Wednesday.
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