Exxon Setback as Shale-Gas Wells Fail in Poland

[phantom power]

Exxon, the world’s largest energy company, yesterday said two exploratory wells drilled in a Polish shale formation at the end of 2011 weren’t commercially viable. The gas discovered in the wells, Exxon’s first in Poland, failed to flow in sufficient quantities to justify bringing them into production, David Rosenthal, vice president for investor relations, said during a conference call with analysts and investors.

International energy prospectors, including Chevron Corp. (CVX) and Talisman Energy Inc. (TLM), are probing Poland’s vast shale deposits to see if intensive drilling techniques that revolutionized U.S. gas production can unleash reserves big enough to supply Polish demand for more than three centuries. Exxon’s setbacks suggest Poland’s shale poses unique challenges that may increase costs and delay output, said Gianna Bern, founder of Brookshire Advisory & Research in Chicago.

“Shale exploration is a very high-cost and high-risk business and the Polish shale market is still in its infancy,” Bern, who advises major oil companies on risk management and strategy, said in a telephone interview yesterday. “It’s early in the game for Poland, and they have significant potential reserves over there.”

http://www.bloomberg.com/news/2012-01-31/exxon-says-two-polish-shale-wells-were-not-commercially-viable.html

[MidwestTransplant]

1. Poland would no doubt like to get off the Russian gas. Them and the rest of Europe.

[hunter]

2. Perhaps they had too many honest people watching them...

Here in the USA a well is a "success" as soon as the money is transfered to your Cayman Island bank account.

If the well does not "meet expectations" a year or two from now, who cares? Not your problem. You've got the money, and they should have been a bit more careful reading the fine print. They knew it was a risky business. It said so right in the contract.