Poland: LNG Energy Announces Additional Lebork S-1 Well Core Analysis

LNG Energy Ltd. (LNG) announced that it has received additional data from the Lebork S-1 and Wytowno S-1 wells drilled on the adjacent Polish Slawno and Slupsk concessions in which LNG has an indirect 20% interest through its ownership of Saponis Investments Sp z.o.o (Saponis).

The new data from Saponis’ third party contractors consists of the total organic carbons (TOCs) for the three target intervals in the Lebork S-1 well and partial mineralogy for the target intervals in both the Lebork S-1 and Wytowno S-1 wells. The TOCs in the Lebork S-1 well ranged from 0.14 to 1.50, averaging 0.8 by percent weight for the Lower Silurian, 0.04 to 6.04, averaging 2.2 by percent weight for the Ordovician and 5.0 to 9.2, averaging 7.2 by percent weight for the Cambrian.

Porosity values of the 148 meter thick Lower Silurian interval ranged from 1.0 to 9.6, averaging 3.9%. The brittleness tests run on selected target intervals indicate that these intervals have similar brittleness values to producing US shales. Completion activity for the Lebork S-1 well is scheduled to begin in mid-September which is anticipated to be followed by the Wytowno S-1 well completion. Saponis is also reviewing the possibility of performing the completion of the Starogard S-1 well in conjunction with the two other wells. Further well analysis and equipment availability will determine the timing.

Additionally, the Starogard S-1 well on the Starogard concession in Poland, in which LNG also has an indirect 20% interest, has been successfully drilled, cased and cemented to its total measured depth of 3,524 meters. During drilling, numerous gas shows were recorded over 250 meters of the Lower Silurian, Ordovician and Cambrian shales. The gas shows consisted methane, ethane, propane, butane, and pentane. The presence of heavier hydrocarbons is consistent with Saponis’ thermal maturity mapping of the Baltic basin, which indicates that the Starogard S-1 well has a reduced thermal maturity profile as compared to the Lebork S-1 and Wytowno S-1 wells (these two wells have an Ro equivalence of 1.8 which is in the dry gas window). For Starogard S-1, a thermal maturity profile will be established by utilizing Ro equivalence from both the Thermal Alteration Index and organic reflectance measurements. These are the same techniques used in Wytowno S-1 and Lebork S-1 well analysis.

There were 107 meters of whole core recovered from the well and a full suite of logs was run. 100 sidewall cores were taken above the whole cored interval where good gas shows and preliminary log analysis indicate potential. The whole core and sidewall cores were taken to fully evaluate the physical parameters of the rock. These analyses will provide, among other data: porosity, permeability, total organic carbon, rock eval pyrolysis, thermal maturity, gas composition, micropaleontology, mineralogy, and mechanical properties.

Consistent with projections, the Lower Silurian was 147 meters thick, similar to the 148 meters observed in Lebork S-1 and the prospective Ordovician shale section was 24 meters thick, in line with the Lebork S-1 well. The Cambrian shale thinned to 6 meters from what was found in the Lebork S-1 well, again consistent with Saponis’ regional geologic model. LNG anticipates receiving the majority of core analysis for the Starogard S-1 well by the end of the 4th quarter 2011.

As previously indicated, best industry practices for drilling and testing of the wells are being utlized, including utilizing bladders to hold the fresh water for fracture stimulating the well instead of digging a large pit. The bladders ensure complete isolation from surface soil and water, reduce truck traffic to and from the site and increase safety. The flowback fluids are flowed directly into self-contained steel tanks on location. The most environmentally friendly additives currently available from Schlumberger are utilized in Poland for fracture stimulation.

Permitting for the previously announced 407 km Saponis 2D seismic program is underway. An agreement has been signed with a seismic contractor and acquisition is scheduled to commence in the 4th quarter of 2011. The objective of the seismic program is to further define basin structure and burial history as well as aid in the selection of individual well locations. In addition to the seismic program, LNG anticipates that its previously announced depth to crystalline basement study will be complete in the fourth quarter of 2011. The study covers a large portion of northeast Poland and encompasses the Saponis and Joyce/Maryani owned acreage. Interpretation of the study is expected to provide a better understanding of general basin geometry, identify sub basins and locate significant basement related faulting.

“We are very pleased with these results from the Lebork well and the initial gas shows in the Starogard drilling and look forward to completing and flow testing all three wells over the coming quarter,” commented Dave Afseth, President and CEO of LNG. “This compliments our drilling and completion of the proposed Peshtene R11 shale gas well in Bulgaria over the same period, pending the closing of our recently announced transaction with TransAtlantic Worldwide Ltd.”

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Source: LNG Energy, September 6, 2011;