PKN ORLEN to drill its first shale gas exploration well in the Province of Warsaw

The location of the well in the village of Goździk (municipality of Górzno, county of Garwolin) was chosen on the basis of positive results of geological surveys, which revealed possible shale gas accumulations at the depth of approx. 4,000 metres. The scope of the ORLEN Group's exploration work has been extended to cover the Province of Warsaw following a decision to step up the Group's research programme related to the search for unconventional gas plays. Goździk-OU1 is the third vertical well to be drilled by ORLEN. This year, ORLEN is planning to drill between five and seven exploration wells, including horizontal ones stimulated by hydraulic fracturing.

"With each newly drilled well, we are getting closer to an accurate estimate of the actual potential of the deposits. The determination and commitment shown by Polish operators can only be envied by foreign licence holders, which sometimes give up work after just a few attempts. This confirms our belief that Polish shale is very much a national project. We are also proving that - when it comes to pursuing goals that make business sense - we have been and will be consistent," said Mikołaj Budzanowski, Minister of the State Treasury.

The drilling work in the Garwolin licence area is expected to continue for some 60 days. DRILLMEC DM-1300, transported to Goździk straight from an Italian factory, is one of the most advanced drilling rigs currently operating in Poland. After the well has been drilled, approx. 300 metres of core material (rock samples) will be taken for laboratory analyses. Based on their results, which will be known by the end of 2012, ORLEN Upstream will decide whether to carry on with the exploration work in Goździk.

The launch of the work within the Garwolin licence area coincided with the receipt by PKN ORLEN of the results of analyses of rock samples collected in late 2011 from the Syczyn-OU1 well, within the Wierzbica licence area in the Lublin region. The results are so promising that a decision has been made to drill a horizontal well at the location.

"The answer to the recently repeated question "what will take the place of the Euro 2012 project" is: the exploration for, and then the production of, Polish shale gas. Polish economy will first be propelled by expenditures on new wells and then, in a few years' time, by cheaper gas, which will be purchased from local companies rather than foreign ones, so the money will stay in Poland,"said Jacek Krawiec, CEO of PKN ORLEN. "For this year, we have contracted two advanced drilling rigs and two drilling crews, which will be carrying out work in the successive locations. As a result, the work in the Province of Warsaw will be carried out simultaneously with our operations in other parts of Poland," stressed Jacek Krawiec.

PKN ORLEN holds eight licences for oil and gas exploration throughout Poland: six in the Provinces of Lublin and Warsaw, and two in the vicinity of Łódź and Sieradz. Preparations are also under way to spud the first offshore exploration well on the Baltic Sea. The company has already signed a contract for a semi-submersible drilling rig, which will be placed within the Latvian economic zone of the Baltic Sea.