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Polish shale-gas wells dry for ExxonMobil

ExxonMobil is assessing its options after its two initial shale-gas wells in Poland – Siennica-1 and Krupe-1 – failed to flow commercial gas volumes

During the supermajor’s fourth-quarter earnings conference call, vice-president of investor relations, David Rosenthal, told investors: “[The two Polish wells] did complete in the fourth quarter. And while we found gas, it did not flow in commercial quantities from either well, so we'll be analysing that, evaluating the various characteristics of the shales and working on our go-forward plans.”

ExxonMobil started drilling Siennica-1 in September, after completing Krupe-1. The company holds six shale-gas licences in Poland, including 51% stakes in two blocks in the southeastern Lublin basin, where it is working with Total. It also holds 51% stakes in four blocks in the eastern Podlasie basin, where it has signed a joint-venture deal with London-based Hutton Energy.

Drilling disappointments

Poland has now seen a string of disappointing shale wells, as a number of companies have started their drilling programmes over the past several months. In November, 3Legs Resources, one of the first companies to move into Polish shale, was forced to shut in its Warblino LE-1H2 horizontal well after a faster-than-expected decline in the well’s flow rate. Aurelian Oil and Gas, meanwhile, experienced a similar disappointment when initial appraisal of its Siekierki project did not live up to expectations.

The US Energy Information Administration (EIA) estimates Poland’s shale-gas resources at around 187 trillion cubic feet, the most in Europe, and enough to break the country’s near-total reliance on Russian gas imports. While early exploration has confirmed that Poland holds significant shale-gas resources, commercial production is proving more challenging than initially hoped.

But only a handful of wells have been drilled to date and there are signs that an appetite for Polish shale exploration remains. On 25 January, state-owned PGNiG said it had signed exploration agreements with mining company KGHM and two of the country’s leading utility companies, PGE and Tauron.

Meanwhile, US independent Marathon Oil said on 1 February that it still plans to drill up to seven shale-gas wells in Poland this year.

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