Yesterday, San Leon Energy announced successful drilling of the Rawicz-15 well to 1580m measured depth below rotary table (MDBRT). The well testing programme is expected to start in two weeks. The thickness of the reservoir is consistent with the forecast and the reservoir is of better quality than Rawicz-12.
Beaufort Securities view on San Leon Energy PLC: The completion of drilling at the Rawicz-15 well is a positive development for San Leon. The Rawicz well is estimated to have more than 50 billion of standard cubic feet (Bcf) of 2P reserves and is expected to be the largest gas development project in Poland for the next 20 years. Recently, San Leon initiated asset optimization and cost reduction strategy, which led to relinquishing of certain non-core Polish licences. This move supports its long-term strategy to focus on development and production. The company may save on the annual license fees for the relinquished Polish license, while staying committed to the remaining acreage in Poland, including the Baltic Basin shale licence and the Rawicz field. We believe San Leon is moving in the right direction and is comfortably positioned to face the challenging market conditions. Therefore, we maintain our Speculative Buy rating on the stock.
