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    San Leon Energy to buy Talisman out of Polish shale venture
  • 08May

    San Leon Energy to buy Talisman out of Polish shale venture

    London-listed gas exploration group San Leon Energy is to buy Talisman Energy’s share of their shale gas joint venture in Poland, a source close to the deal said on Tuesday.

    The Canadian company and San Leon signed a joint venture agreement in 2010 to explore three Baltic Basin concessions, but Talisman said in March that it would consider quitting Poland.

    It is expected to announce its withdrawal on Wednesday, the source said, adding that San Leon is the buyer.

    “Talisman is selling its operations in Poland, mainly due to its financial situation, but problems with long administrative procedures also played a role,” the source said.

    He did not give any indication of the price AIM-listed San Leon would pay.

    Talisman is the second international player to withdraw from Poland, where an unsettled regulatory landscape and reduced estimates of potential reserves have spooked some foreign investors hoping to tap Polish shale.

    U.S. oil major Exxon left last year after test wells failed to produce commercial quantities of gas, raising questions over whether Poland will fulfil hopes to use shale supplies to ease reliance on Russian gas.

    Talisman is restructuring its operations to lower debt and boost its shares. Last week it announced plans to step up asset disposals outside its core regions after posting a first-quarter net loss of $213 million, compared with a profit of $291 million a year earlier.

    Talisman and San Leon Energy both declined to comment on Tuesday.

    Poland estimates its recoverable shale gas reserves at between 346 billion and 768 billion cubic metres – far less than initial estimates but still enough to meet its gas demand for decades.

    The European Union member and central Europe’s biggest economy has so far granted more than 100 shale gas exploration concessions. Most have gone to local state-controlled companies, but international players such as Chevron are also among the explorers.

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