Operational Update - Tarfaya

RNS Number : 7822S

San Leon Energy PLC

16 September 2010

 



16 September 2010

San Leon Energy Plc

("San Leon" or the "Company")

Operational update - Tarfaya Oil Shale Pilot Plant, Morocco

San Leon Energy, the  oil and gas exploration and development company focused on projects in Poland, Ireland, Morocco, Italy and Netherlands, is pleased to provide the following update on its Tarfaya oil shale project in Morocco as its in-situ vapour extraction (IVE) process is developed and as the test pilot plant has progressed from the detailed engineering phase into the construction phase.

Highlights:

·      New road connecting the Pilot Plant site to the main highway completed.

·      First shipment of equipment and materials for the Pilot Plant facility is now in Morocco, second shipment is awaiting collection.

·      The Environmental Impact Assesment ("EIA") covering the test pilot plant has now been approved by the Moroccan Ministry of Environment 

·      The hydraulic fracturing analysis study has now commenced.

·      New office in Tarfaya opened with full communications suite and team in place.

·      Local representation and facilities arranged.

·      Diesel Power Generators built, tested & shipped.

·      Process Equipment has been assembled for control testing in Houston.

·      Compressors, Scrubbers, Vaporizors, Heat Exchangers, Gas Filters,  LPG Delivery Pumps and Generators; purchased, built, tested and in transit.

Following the signing of a memorandum of understanding with National Office of Hydrocarbons

and Mining ("ONHYM") in June 2009, the Tarfaya Oil Shale Pilot Plant project has progressed from the detailed engineering phase to the construction phase. With the release of final "For Construction" revisions of Instrumentation Drawings, the Piping Layouts, Data Sheets, and Site Layout and Construction documents are now being used to progress the fabrication of pipe spools and equipment hook up arrangements.

The EIA report covering the Tarfaya Pilot Plant has now been accepted and approved by the Moroccan Ministry of Environment. This acceptance and approval of San Leon Energy's proposed development will now allow construction work to commence.

Construction of a new road across the desert from the main highway into the Pilot Plant site was completed in August 2010 in preparation for site clearance and construction activity. This road will allow the safe and secure passage of the large vehicles required to transport the construction machinery and equipment to/from the site in the coming months.

Process equipment manufacture is now complete and the equipment is being positioned in the correct configuration and alignment at Titan Flow Control's facility in Houston and pipe spool fabrication is in progress. Detailed engineering of the pipe spools together with preparation of pipe spool isometrics has also commenced.

The design of a high temperature surface wellhead has also progressed sufficiently to allow detailed engineering to commence.  The aim will be to produce a prototype assembly to undergo qualification in Houston to prove up the high temperature seal arrangement. The in- situ vapour extraction (IVE) process is being developed by the San Leon team of engineers and specialists.

Investigation work associated with determining a suitable downhole sealing system within the injection and production wells is ongoing. Possible suppliers of suitable equipment and high temperature sealing systems are being determined.

The drilling programme, for the two wells to be drilled at the Pilot Plant, is still being reviewed along with local Moroccan drilling and support services. Rig availability in other areas of the world is also being investigated.

The hydraulic fracturing analysis study has now commenced at Golder Associates Ltd to assist San Leon Energy with understanding the possible natural fracturing possibilities that may be present within the Tarfaya Oil Shale formation. The analysis will also investigate and model fracturing conditions and requirements to establish the model for the Tarfaya conditions and well bore fracturing and integrity. The study will review further conditions to establish the equipment and consumables for carrying out the procedure.

The first shipment of equipment and materials for the Pilot Plant facility is now in Morocco awaiting onward shipment to Tarfaya.  A second shipment is now ready and awaiting collection.

San Leon has also established a local office and a personnel accommodation facility in Tarfaya, from which the construction activities will be managed and coordinated. This facility is now fully operational and manned by San Leon personnel.

Oisin Fanning, Chairman of San Leon, commented:

"We are delighted with the way that our Tarfaya Pilot Plant has continued to progress; both on schedule and on budget. The team has carried out an immense amount of work moving the project forward. The magnitude of this task should not be underestimated.

The commencement of construction of the Pilot Plant marks the next stage in the development of this project as we look to achieve our aim of shale oil recovery. Careful planning, expertise and precise engineering will unlock the enormous potential of Tarfaya of up to 50 Billion barrels of oil, to the advantage of all.

We look forward to continuing to work with ONHYM progressing this project further and achieveing our objectives."

16 September 2010

Enquiries:            

San Leon Energy Plc	Tel: + 353 1291 6292
Oisin Fanning, Executive Chairman   Philip Thompson, Chief Executive Office
www.sanleonenergy.com
Macquarie Capital (Europe) Limited	Tel: [phone]
Paul Connolly Ben Colegrave
Fox Davies Capital	Tel: [phone]
Phil Davies David Porter
Arbuthnot Securities	Tel: [phone]
Nick Tulloch   Ben Wells
College Hill Associates Nick Elwes	Tel: [phone]

 

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