San Leon reaches agreement with Baker Hughes on Siekierki fields

San Leon has announced that it has agreed commercial terms with Baker Hughes (BHI) to progress with testing and potential development of the Siekierki gas fields in Poland.

The programme will be split into three phases, with initial tests on the Trzek wells determining whether to progress with further phases. BHI will fund all operations in return for a full recovery of costs plus a commercial margin out of 75% of initial cash flows, after which it will earn a 10% net profit interest. This risk share model is increasingly being used by OFS companies but is also an indication of BHI's confidence that the Siekierki development will be commercially viable.

The transaction should soon complete and if successful, the Siekierki wells could be producing up to 10 million ft³/d by mid-2015, generating up to US$ 3 million of revenues per month.

Adapted from a press release by David Bizley

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