LNG Energy Ltd., Vancouver, (TSX-V: LNG) has reported that its third vertical well, the Starogard S-1 well on the Starogard concession in Poland, was spudded on July 16, 2011. LNG has an indirect 20% interest in the well which is currently drilling at a depth of about 1,700 meters and has installed 690 meters of steel casing and cementing it from the bottom to the surface. This depth is below the potential fresh water intervals and was installed to isolate and protect the aquifers. A second string of steel casing will be installed and cemented at an approximate depth of 2,050 meters, prior to drilling ahead to the estimated core point. At the core point, the plan is to core the balance of the well for further analysis of the formations.

LNG has also received an initial portion of the core analysis back from the 3rd party contractors for both the Wytowno S-1 and Lebork S-1 wells, on the adjacent Slawno and Slupsk concessions. The data for the Lebork S-1 well is only from the sidewalls taken in the lower portion of the Ordovician and the Alum shale, as the whole core analysis from above these intervals is not yet completed. The additional core analysis data for the target intervals in the Lebork S-1 well, and the final core analysis reports for both wells are expected to be in by the end of August at which time the log analyses for both wells will be reprocessed with the core data.

Porosities:

  • Lebork S-1 well: 47 meter thick Ordovician/Cambrian interval has an average porosity of 4.0%
  • Wytowno S-1 well: 91 meter thick Lower Silurian target interval has porosity ranges of 1.1% to 4%, averaging 3.0% and the 40 meter thick shallower Lower Silurian interval has a porosity of 5.6%.

Gas filled porosity:

  • Lebork S-1 well: gas filled porosity ranges from 0.8% to 3.9%, averaging 1.8% of bulk volume in the Ordovician/Cambrian
  • Wytowno S-1 well: the Silurian targets range from 0.3% to 1.6%, averaging 1.1% of bulk volume, with one shallower Silurian interval that has a value of 4.3% of bulk volume.

Desorption:

  • Lebork S-1 well: average desorption values of 40 Standard Cubic feet of gas per ton of rock, ("SCF/ton") over the Lower Silurian and 268 SCF/ton over the 47 meter Ordovician/Cambrian interval. The Lower Ordovician/Cambrian shale had intervals as high as 451 SCF/ton.
  • Wytowno S-1 well: average desorption values of 124 SCF/ton in the Lower Silurian target interval and 77 SCF/ton in the shallower Lower Silurian interval. For comparative purposes BNK Petroleum Inc.'s Oklahoma Woodford Shale Tishomingo field has average values of 104 SCF/ton.

Thermal maturity:

  • Wytowno S-1 well: thermal maturity values were estimated from the reflectance of pyrobitumen and the Thermal Alteration Index (TAI) obtained from Palynological (micro-paleo) analysis of the drill cuttings, which both equate to a Ro of 1.8 in the Lower Silurian
  • Lebork S-1 well: TAI for the cuttings from the Lower Silurian to Ordovician/Cambrian are also equivalent to a Ro of 1.8, which places the thermal maturity for both wells in the dry gas window.

TOC:

  • Wytowno S-1 well: the total organic carbons ("TOCs") are variable across the Lower Silurian target interval, ranging from 0.1 to 1.3 TOC by percent weight. The TOC data from the Lebork S-1 well is not yet available, however both the log calculated values and SEM image analysis values indicate multiple times higher TOCs across the Ordovician/Cambrian shales.

Incorporating the micro-paleo and high-resolution stratigraphic analysis into the geological model indicates that the Wytowno S-1 well was drilled on a localized paleo-topographic high. What was originally interpreted as Ordovician/Cambrian shales are actually Lower Silurian hot shale intervals. The intervals in the Lebork S-1 well have also been revised on the basis of the micro-paleo and high-resolution stratigraphic analysis, resulting in slightly different thicknesses of the various intervals. In addition to the seismic program, a depth to crystalline basement study will be conducted. The study will cover a large portion of northeast Poland, fully encompassing all three concessions. The interpretation of this study will provide better understanding of general basin geometry, identify sub basins and locate significant basement related faulting. The study is slated for completion in September 2011.

Completion activity for the Lebork S-1 and Wytowno S-1 wells are scheduled to begin in the fourth quarter. The possibility of undertaking the completion of the Starogard S-1 well in conjunction with our two other wells is also under review, with well results and equipment availability to determine the timing. Best North American industry practices are being utilized for drilling and testing the wells, including utilizing bladders to hold the fresh water for fracture stimulating the well, the arrival of these are determining the start of the completion activity. The bladders ensure complete isolation from surface soil and water, reduce truck traffic to and from the site and increase safety. The flowback fluids are flowed directly into self-contained steel tanks on location.

Recently approval has been received from the Polish authorities to acquire approximately 407 km of 2D seismic on the concessions. The seismic program will further define basin structure and burial history as well as aid in individual well location selection. The term of the three Saponis concessions were also extended to provide Saponis enough time to acquire the seismic prior to drilling the second well on each concession. It is anticipated that the acquisition of this seismic will commence in the fourth quarter of this year.

"We are very encouraged by the initial results from the sidewall core tests on the Wytowno well," says Dave Afseth, president and CEO of LNG. "The results of the core analyses as well as the analyses of the sidewall cores will enable us to design and implement an appropriate stimulation to flow test the wells later this year."