Exxon Setback as Shale-Gas Wells Fail in Poland [View all]

[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