Pura Vida locks in Poland oil and gas move
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Special report: Pura Vida has completed its move into two Polish unconventional oil and gas plays that have the potential for near-term production.
Pura Vida Energy (ASX:PVD), which will shortly be renamed Ansila Energy, has completed its transaction with Gemini Resources to earn a 35 per cent interest in both the Gora unconventional gas and Nowa Sol unconventional oil and gas projects onshore Poland by spending a total of $A6.15m on these concessions.
Both projects are located within a prolific hydrocarbon producing region where recent discoveries have highlighted the rapid start opportunity for further appraisal and flow testing to determine their commerciality.
Non-executive director Bruce Lane told Stockhead that the decision to farm into the Polish assets was driven by a desire to participate in projects that were close to production and offered a lower risk profile compared to Pura Vida’s previous focus on African deepwater offshore exploration.
“The other thing is that we believe that the European gas market is very attractive, particularly in those countries that are trying to reduce their reliance on Russia and some of its associated neighbouring countries,” he added.
“There is a real desire in countries like Poland, Bulgaria, Romania, all through that area to be more self-reliant in terms of critical oil and gas supply.”
Lane added that Poland had a very strong economy and held part of the Permian basin which is a well understood geological structure that runs through that part of Europe and which had been a very prolific producer of oil and gas over the years.
“There is also a lot of associated infrastructure that can transport natural gas to the consumer and obviously there is strong demand from consumers,” he said.
“We were looking at assets in that part of the world and these projects stood out as being the closest to production and the cheapest to get into and test a very large target”.
“In particular, there are 4 existing wells on the projects that were drilled with the intention of testing, but the decision was made by previous owners not to test them at a time when the oil price collapsed.”
The upcoming re-entry and fracture stimulation of the Siciny-2 well that was drilled in 2012 within the Gora project offers potentially the larger payoff with a 2C (Best) estimate contingent resource of 1.6 trillion cubic feet (Tcf) of gas (270 million barrels of oil equivalent).
Siciny-2 had encountered 1,460m of tight Carboniferous sandstone with good and consistent gas shows throughout, while analysis of an injection test indicated good commercial potential through horizontal fracture stimulated development wells.
There is also plenty of upside potential in the event that this play is proven across the entire block, with the company estimating that the project could host up to 9Tcf of potential resources.
Pura Vida and its partners intend to re-enter Siciny-2 and carry out a two-stage hydraulic fracture stimulation program within the Carboniferous reservoirs.
Well tests will be carried out to recover information on permeability and production potential to aid the evaluation of the commerciality of the play.
The rewards for success are certainly attractive with Poland offering a favourable fiscal regime and a robust average annual price of $US6 (AU$8.85) per thousand cubic feet of gas giving the resource target of 1.6 tcf a current potential value of AU$14.16 billion.
By way of contrast, US natural gas prices ranged from $US3.67 to $US5.46 per thousand cubic feet in 2018.
Pura Vida also has its eyes on the Nowa Sol unconventional oil play where the Jany-C1 well encountered good oil shows within the tight Dolomite formation during drilling in 2013.
While oil did not flow to the surface during drill stem testing, oil did flow into the well bore and was recovered along with barite mud.
The company is aiming to prove up a 2C contingent resource of 36 million barrels of oil with a single-stage frack with a flow test in early 2020.
Development wells for both Gora and Nowa Sol will involve horizontal wells with a 16-stage frack.
Nowa Sol development wells are expected to cost about $US7.1m with an independent review by Netherland Sewell & Associates indicating that each well could have ultimate best estimate recovery of 384,000 barrels of oil in the base case.
Pura Vida is currently raising $2.7m through a fully underwritten entitlement offer of one share priced at 1.8c each for every two shares held by eligible shareholders.
Proceeds from the raising will be used to fund the proposed work programs at Gora and Nowa Sol.
The company also has the option to drill several conventional prospects targeting the Rotliegendes reservoir.
These prospects are located adjacent to the proven, producing Rawicz (100 Bcf) and Zalecze-Wiewierz (900 Bcf) gas fields and offer de-risked upside on the Gora concession due to 3D seismic coverage and well control from surrounding fields.