If Cuadrilla decides to proceed pending further tests, it would still need approval from the Lancashire County planning authorities, the national Environment Executive and the Health and Safety Executive before obtaining a final go-ahead from the DECC. Only then can it gain a permanent license and start producing gas commercially.

British energy users need all the help they can get. In March U.K. households paid between £9.60 to £11.19 ($15.36 and $17.88) per million BTUs for natural gas, compared to spot prices in the U.S. of about £1.25, or $2. American natural gas prices have plunged in the last decade as shale production has taken off. Britain and Europe could be on the brink of a similar energy revolution—or at least an end to chronic undersupply—if its governments don’t stand in the way.

On that point, the U.K. isn’t the only good-news story. Poland, which is keen to throw off the yoke of dependence on Russian fuel, continues to press forward with shale-gas exploration. Efforts from Greens in the European Parliament to ban or restrict fracking throughout the European Union have gone nowhere.

So far, only France (and Bulgaria) have bought into the anti-fracking hype and banned the practice. With French retail natural-gas prices at least 25% higher than in the U.K., cheaper domestic gas would be a particularly welcome reprieve for the French economy.

Source: The Wall Street Journal

According to the former CEO of Realm Energy there’s only one phrase appropriate to the newer, bigger San Leon Energy following its pending acquisition of Realm Energy: “shale powerhouse.”

In the wake of the deal, which was announced on 26th August and formally closed November 10th, James Elston, former CEO of Realm commented: “San Leon effectively becomes a shale powerhouse in Europe. The combined San Leon-Realm is so big in so many different plays that in my mind it’s almost got a ‘can’t fail’ sticker on it”

Mr. Elston, now Director of Palladian Energy Advisory, said that the broader shouldered San Leon had the likelihood of some good assets in the Paris Basin, a lot of good assets in Spain and interesting things in Morocco – that they already had – as well.

“If you combine that with San Leon’s acreage in Poland, and the fact that they’re in two plays in Poland: on one they have their JV with Talisman Energy Inc., which was the best farm out deal anyone had achieved at the time, and I think it still ranks pretty highly – San Leon got a good deal in getting Talisman in, and Talisman are brilliant shale players, so they’ve got a brilliant partner in Talisman.

“With Realm they’ve got a lot of un-farmed out acreage close by,” he continued. “So if you like Talisman are effectively going to de risk quite a lot of the combined San Leon-Realm acreage position, while San Leon keeps 100% of that – they keep the upside there and don’t need to spend that much money at the moment.

“It builds real scale in Poland,” said Elston.

On top of that, he added, San Leon had a million acres in Poland’s Carboniferous shale play.

“What’s interesting about the carboniferous is that there are lots of successful carboniferous shale plays – the Barnett, the Fayetteville and the Woodford are all Carboniferous, so the great thing about it is you know that the tiny fossil animals have formed the right kind of pore structures in the shale. You know that that’s going to work.”

In slight contrast, he said that what one might not know with the Silurian or Cambrian shale plays – like that which had been drilled in eastern Poland – is whether or not the tiny fossils in the rock provided the right kind of pore structure for shale. “That’s one of the things that we’re waiting to see with all the testing taking place,” stated Mr. Elston.

He summed up: “In Poland, San Leon now has two massive opportunities in different shale plays and it’s really augmented that with Realm.

“But in terms of what Realm brings to San Leon, there’s this JV with applications in the Paris Basin, which is the play closest to my heart. San Leon will acquire ConocoPhillips as a partner there for when they get license awards in Paris for the future time when I believe that fracking will be allowed again.”

In August, he believed that in other places Realm had made massive moves. In fact, on 21 September Realm was awarded two out of the 10 permits it applied for in Spain, with a likelihood of a further six 100% awards for concessions comprising over 1.7 million acres.

“Despite the market collapse after the deal was announced, effectively Realm shareholders who took San Leon stock or exchangeable shares will hopefully get the chance to see the rise in value over the coming months with the security at a greater scale that there is in working with the San Leon team for whom there’s a tremendous set of opportunities to exploit. They’ve got the capital, staff and systems – it’s a operationally much bigger company than Realm; they’ve got 15 people just working in Warsaw on the Polish plays.”

“For former Realm shareholders who took San Leon stock or exchangeable shares you’ve got the chance, to actually follow that through and see the upside,” he explained. “This wasn’t a cash deal that capped the upside for the Realm shareholders, it’s the opportunity to really see the growth through San Leon shares into the future, so it’s a ‘win-win’ situation.”

Regarding James Elston’s relationship with Realm, he recalled he was lucky enough to meet a gentleman called Craig Steinke (Realm Energy International’s Executive Chairman) at a conference in London in late 2008.

“We started talking, which ended up in the formation of Realm Energy, which I think was really timely because we were able very rapidly to get up the learning curve on shale in Europe, with Halliburton’s help, and quickly build a business at a time when things were getting immensely competitive. The Majors had woken up and you were up against them in a lot of jurisdictions, you had to move very rapidly.”

“In North America, with his previous vehicles he’s been an early mover in basins where coal bed methane (CBM) and to a degree shale gas have been developed” he explained of Mr. Steinke. “So he’s made his first fortunes from those plays, which was the attraction to me to get it together with him. We basically got together with another angel investor, started the company and then reversed it onto the Toronto Stock Exchange.”

Elston recalled, “I was CEO for the first year, but with the movement towards rapidly getting more operational on the ground, particularly in France (Pre the frack ban surfacing), and just bigger in general, there was a need for someone operationally more experienced in the senior management team than me. So it was the right time to move on.”

He explained Karl DeMong, Realm’s new VP of Operations, who is well versed in operating very complex shale drilling and fracking operations in Canada, was from large E&P Apache Corporation. Recently Realm strengthened their team further adding Lindell Bridges, the eminent shale geoscientist, as VP Exploration. Mr. Bridges has helped large US E&Ps EQT, EOG Resources, Inc.and Chesapeake Energy Corporation crack the shale codes in the Marcellus, Barnett and Fayetteville respectively in leading their geoscience teams in those plays.  Elston added “Lindell is probably the most renowned shale geoscientist working in Europe at the moment.”

Meanwhile, Mr. Elston said he had a mixed initial reaction to San Leon’s pending purchase of Realm Energy.

“The team at Realm was strengthened tremendously in second quarter, and I think they really had the ability to take things forward themselves. I thought Craig and the team could’ve done a lot more on their own. The two main shareholders in Realm, (one of which is Quantum, a George Soros vehicle) are also shareholders in San Leon, so I think it was shareholder driven consolidation really,” Elston explained of the merger.

“I would’ve liked to have seen Realm go on for a bit longer on its own. C’est la vie.”

Without the merger, he contended that Realm was not going to have any “drilling newsflow” for some time, but that San Leon had plans to drill a lot of wells in Poland.

As Director of Palladian Energy Advisory, James Elston now spends his time helping small energy companies raise money by working with small investment banks and private equity firms. Elston is working on several startups, as well as giving sermons as a “rational evangelist” on shale gas.

Source: Natural Gas in Europe

LONDON, Nov. 11, 2011 /CNW/ – San Leon Energy plc (“San Leon“) (AIM:SLE) is pleased to announce that the previously announced acquisition of all of the issued and outstanding common shares of Realm Energy International Corporation (“Realm Energy“) (TSX-V:RLM) by San Leon pursuant to a plan of arrangement (the “Arrangement“) has been completed.

Under the terms of the Arrangement, shareholders of Realm Energy received for each Realm Energy share held, at their election and subject to pro-ration:

subject to a maximum of C$17.7 million in cash (subject to adjustment) being paid to Realm Energy shareholders in the aggregate, in exchange for the aggregate number of Realm Energy shares in respect of which such an election is made. As a result of certain Realm Energy shareholders exercising rights of dissent under Canadian law, the cash available was adjusted to a maximum of approximately C$14.0 million.

Realm Energy shareholders elected to receive cash greater than the maximum amount of cash available to Realm Energy shareholders pursuant to the Arrangement.  Accordingly, as a result of pro-rationing and the exercise of rights of dissent by certain Realm Energy shareholders, Realm Energy shareholders who elected cash will receive approximately 12.68% of the amount of cash they elected to receive.  In addition to the cash consideration paid to Realm Energy shareholders, San Leon issued 284,084,336 San Leon Shares and Exchangeco issued 41,292,848 Exchangeable Shares to Realm Energy shareholders under the Arrangement.  Realm Energy’s shares were delisted from the TSX Venture Exchange effective at the close of business on November 10, 2011.

Due to an incompatibility between the current Irish legal requirements in relation to San Leon Shares and certain Canadian securities laws, neither the San Leon Shares nor the Exchangeable Shares could be made eligible for CDS deposit at this time.  San Leon is currently working with its advisors to determine the most efficient option to rectify the issue and have the securities made eligible for CDS deposit.  As a result, each Realm Energy shareholder that submits a properly completed Letter of Transmittal will be receiving a physical certificate for its San Leon Shares or Exchangeable Shares, as applicable.  Those Realm Energy shareholders that held their interest in a CDS position and are non-objecting beneficial holders will also be receiving physical certificates representing their interest in San Leon Shares or Exchangeable Shares, as applicable.  Realm Energy shareholders that are objecting beneficial holders may not directly receive physical share certificates as it is anticipated that “global certificates” will be issued to each CDS participant representing the aggregated position held by such CDS participant.  It is anticipated that each of the CDS participants will then breakdown its aggregated position internally and may requisition physical certificates for each objecting beneficial holder.  It is anticipated that for those registered Realm Energy shareholders who have already submitted a properly completed Letter of Transmittal, the physical certificates for San Leon Shares will be mailed out by the Dublin office of Computershare Investor Services Inc. (“Computershare Ireland“), in its capacity as registrar and transfer agent for San Leon, by Wednesday, November 16, 2011.  Likewise, for those registered Realm Energy shareholders who have already submitted a properly completed Letter of Transmittal, it is anticipated the physical certificates for the Exchangeable Shares will be mailed out by the Vancouver office of Computershare Investor Services Inc., in its capacity as registrar and transfer agent for Exchangeco, within the same time period.  For those registered Realm Energy shareholders who have not yet submitted a properly completed Letter of Transmittal, but who plan to do so in the future and those non-objecting beneficial holders holding their interest in the CDS position, the time period for the issuance and mailing of physical certificates representing San Leon Shares and Exchangeable Shares is anticipated to be approximately ten business days after receipt by Computershare Trust Company of Canada of the applicable Letter of Transmittal and CDS participants list.

Neither the San Leon Shares nor the Exchangeable Shares are listed on a stock exchange in Canada.  In connection with the consideration of its options regarding the CDS eligibility of the San Leon Shares, San Leon is exploring the possibility of seeking a listing on a Canadian exchange for the San Leon Shares.  There is no intention to seek a listing in any jurisdiction for the Exchangeable Shares.  Currently, San Leon Shares are admitted to trading on London’s Alternative Investment Market (“AIM“) under the symbol “SLE”.  Realm Energy shareholders who desire to trade San Leon Shares they will receive pursuant to the Arrangement in on-market transactions on AIM will need to contact a broker who can effect trades in the CREST system, which is the securities settlement system used by companies traded on AIM.  To the extent that Realm Energy shareholders wish to transfer their San Leon Shares outside of the CREST system they will need to contact Computershare Ireland to effect such a transfer.  A purchaser involved in a transfer of San Leon Shares outside of the CREST system will be required to provide evidence that Irish stamp duty has been paid on such a transfer, or alternatively, that Irish stamp duty is not applicable to such transfer.  It is anticipated that this requirement may cause significant delays in the registration of the transfer.  More detailed information regarding Irish stamp duty can be found in the information circular of Realm Energy dated October 5, 2011 (the “Circular“) under the heading “Tax Considerations to Realm Shareholders“.

As previously disclosed in the Circular, a Realm Energy shareholder wishing to file a joint tax election under section 85 of the Income Tax Act (Canada) or a QEF Election (as such term is defined in the Circular) pursuant to the United States Internal Revenue Code of 1986 should consult its tax advisor.  Information concerning each of these filings will be included in the joint tax election package and the 2011 PFIC Annual Information Form that will be made available on San Leon’s website at www.sanleonenergy.com

To obtain copies of the agreements governing the exchange of Exchangeable Shares into San Leon Shares, holders of Exchangeable Shares should visit San Leon’s profile on SEDAR at www.sedar.com to obtain copies of the Support Agreement and the Exchange Trust Agreement (as such terms are defined in the Circular).

About San Leon

San Leon is an independent oil and gas exploration and production company listed on AIM (ticker symbol: SLE). San Leon holds exploration assets in Poland, Morocco, Albania, Ireland, Italy, Spain and Germany and is in the process of acquiring additional petroleum and natural gas rights in other European basins. San Leon’s focus is on both shale and conventional exploration across its portfolio.

Forward-Looking Statements: This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws.  The use of any of the words “expect”, “anticipate”, “may”, “will”, “should”, “believe”, and similar expressions are intended to identify forward-looking information or statements.  This press release contains forward-looking statements and information concerning the eligibility for deposit into CDS, the anticipated timing for issuance of physical certificates representing San Leon Shares and Exchangeable Shares and the potential delays involved in trading San Leon Shares outside the CREST system.. San Leon has provided these statements in reliance on certain assumptions that they believe are reasonable at this time, but there can be no assurance that such statements will be correct.. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release concerning these statements. Readers are cautioned that the foregoing list of factors is not exhaustive.  The forward-looking statements and information contained in this press release are made as of the date hereof and San Leon undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Realm Energy International has announced it has mailed out the information circular to its shareholders, with respect to the details of the proposed acquisition of Realm Energy, by San Leon Energy Plc.

You can read details of the release by clicking on the link below.

News from Realm Energy International Corporation

There’s a big difference between developing conventional oil and gas and unconventionals, according to James Elston, Director of Palladian Energy Advisory, former CEO of Realm Energy International - this posting from Natural Gas for Europe follows the Wall Street Journal post earlier this week, about the labour force in Poland.

“The great contrast with conventional O&G exploration,” he explained, “is in a general O&G field you can drill a few wells and you can produce out of those wells with no intervention for a very lengthy period and therefore the returns can be very high, correspondingly the investment level is very low. And once the rig has come and gone, that is it really for the field.

“So there’s not a great deal of investment that goes into a local area – you have people staying in hotels for the couple of months it might take to drill a well, and another couple of months for the surface facilities, and then they go.”

He said things were quite a bit different at unconventional drilling sites, where personnel and affluence were around to stay. In his recent presentation at one of Europe’s premier energy conferences, Flame, Mr. Elston highlighted the associated benefits of developing unconventional gas.

“The difference really is that with shale oil and gas, you have to drill a great deal of wells and you have to do that continually over decades and the effect that has is really continual injection of money through the value chain in various ways,” he said.

According to Elston, security of supply is one very likely benefit; he said he was a bit skeptical about lower gas prices from unconventionals development.

Still, he continued by listing the benefits. Jobs, for one.

“Certainly in America, many hundreds of thousands of jobs are generated – probably even millions of them are generated by the shale gas phenomenon. And it’s not just for a year or two; this is a generational thing. This lasts and will last decades, so you’re going to have people at various levels within the shale gas business around the world really working their entire lives in particular regions, in support of the value chain.”

He continued: “You have substantial, well-paid, generational job opportunities – this isn’t just some quick bubble that comes and goes and you have to make your money on it while you can, like in a property boom. This is substantial, well-paid generational opportunities in rural areas, which means you don’t need to go to a city to earn a good living.”

Royalty revenues, he said, were also a great windfall.

“In America these go to the landowners, while in Europe all minerals are owned by the government, so royalties go to the government at the local or say state level as in Germany,” he explained.

“In France they have an interesting thing where royalties are split within various different levels of governments and you have the situation, oddly enough in the Paris basin, where you have local areas that don’t have property taxes, or that are effectively minimized off the royalties by one or two oil wells.

“So, royalties can be real, be they going to the local or national levels, and of course they’re paid from day one of production,” said Elston.

Corporate tax revenues, according to him, were generated from producers, service companies and suppliers developing a shale play.

“And perhaps even more importantly,” he said, “given the very high level of this taxation in Europe, payroll taxes – your personal taxes and, more importantly, the national insurance contributions, social security, which you don’t see on your payslip because they’re paid by your employer. These numbers are quite enormous.

“And as you can imagine you’ve got generational job opportunities: people are employed for their entire careers and they’re paying very substantial payroll taxes – this is a tremendous revenue stream for governments, even ignoring the tax take directly from oil and gas.”

Elston said there were also multiplier effects on the rest of the economy. He cited studies done on the Fort Worth region for the Barnett shale, which showed benefits, multiplier effects on the economy, and how many people were employed from drilling operations. “There are multiplier effects from massive investment going into a local region that benefit most everybody.”

“And I think perhaps last of all there are gains for pensions funds and other investors in the value chain investing in little companies like Realm, big companies like Exxon, or the many many service companies that come and work on the businesses: civil engineering contractors doing things to do with preparing well pads, or digging trenches for pipelines. There’s just a large amount of investment going in where profits can be made and investors can be rewarded.”

He contended that governments at local and national levels would see substantial cash flows from this business, which would help maintain living standards in Europe.

Elston said developing unconventionals could have a profound effect upon rural areas within Europe.

“If you look at the Lower Saxony area in Germany, its finances could do with an injection of money,” he offered as an example. “Royalties in Germany go to the state, so it really helps with employment and investment. It’s nice to have something happening in the countryside beyond farming, alternative choices of employment.

He added: “And these are well paid jobs; if you work in the onshore business in Europe, you make a lot of money.”

Initially, he said he thought a fair number of teams of people would be moving over from North America in terms of fracking, which wasn’t commonly available in Europe.

“Given the cost of doing that, Halliburton, Schlumberger, Weatherford will be very keen to train local people in quantity from day one, and they’ll just take people from the technical schools and universities, or perhaps Poles who’ve worked in Britain doing various things. They’ll train them up over a period of years and the intention will be to have localized workforces in all plays very quickly, as it’s more cost effective as well as being more politically acceptable than having a lot of people moving in form North America,” explained Elston.

Considering Poland was likely to be first place on the continent where shale gas was developed, perhaps Poles would comprise the first indigenous unconventionals workforce in Europe, he surmised. Having experienced the huge Polish workforce in the UK, he said no one would underestimate the ingenuity, rapid learning and work ethic of Poles, who might eventually be found working in France’s unconventional plays.

Source: Natural Gas for Europe

“A year or two from now, the activity over in Europe is going to be absolutely frenetic, and so you’ve got to get in there early,” said Craig Steinke, executive chairman of junior explorer Realm Energy International (TSXV:RLM).

Realm, which has offices in Vancouver and London, is involved in eight different shale basins in seven European countries, though it doesn’t disclose specifics for competitive reasons.

The likes of ExxonMobil Corp. (NYSE:XOM), Royal Dutch Shell PLC (NYSE:RDS), ConocoPhillips (NYSE:COP) and Chevron Corp. (NYSE:CVN) have begun to grab stakes in shale formations in Poland, Germany, Hungary, Ukraine and other European countries.

Some may wonder why North American companies would look for shale opportunities across the Atlantic when there are plenty of promising plays in their own backyard.

“In North America as a whole, the lands have been bid up to significantly high prices,” said Steinke.

“If you don’t have the land, you’re on the outside looking in.”

In Europe, energy companies can negotiate directly with government authorities to acquire large, contiguous tracts of land – though it may not be that way for long if activity picks up, said Steinke.

“Realm’s goal is to be an early mover on acquiring the lands. It’s going to put the company in a very advantageous position as the momentum builds,” he said.

“The opportunity won’t be there forever, that’s for certain.”

Shale is a ubiquitous type of sedimentary rock that is as tough as concrete. Freeing natural gas molecules from within the rock is no easy feat as it requires enormous amounts of water, chemicals, sand and, above all, technical know-how.

North America’s shale gas industry has its roots in the Barnett formation in north-central Texas, where energy companies began honing their techniques about 10 years ago.

Since then, horizontal drilling and multi-stage fracturing have spread to the Marcellus play in New York and Pennsylvania, the Haynesville play in Texas and Louisiana and the Horn River and Montney plays in northeastern British Columbia.

Realm collaborates with U.S. energy services giant Halliburton Co. (NYSE:HAL), which has been active in virtually all of North America’s shale gas plays.

Halliburton has been helping Realm parlay expertise it garnered from North American shale gas plays into European ones, which share many of the same characteristics.

European shale gas is also on the radar of Talisman Energy Inc. (TSX:TLM), already a big landholder in the Marcellus and Montney formations.

“We haven’t done any deals yet, but we are looking hard and depending on how things go, we could see an entry into an international opportunity,” Richard Herbert, Talisman’s executive vice-president of exploration, said on a conference call with analysts and reporters earlier this month.

Another reason European shale gas could be attractive is pricing. North America is currently dealing with a glut situation, in which supply is outpacing demand.

European countries are also eager to stop relying on natural gas imports from Russia, which has had a history of suddenly shutting off supplies amid disputes with its neighbours.

It’s going to take several years of work before European shale gas is commercially viable, said Michael Dawson, president of the Canadian Society for Unconventional Natural Gas.

Energy companies already know all the ins-and-outs of North America’s geology because so much conventional oil and gas drilling has taken place there. That’s not the case in Europe, he said.

There also isn’t much there in the way of specialized equipment needed to drill the high-tech wells. So all of that has to be built or transported from elsewhere.

“I think there has to be a realization that while everybody seems to be getting on the bandwagon with shale gas right now, it just doesn’t happen overnight,” said Dawson.

“It’s not a slam dunk that the shale gas potential in Europe is going to be successful.”

- By Lauren Krugel for The Canadian Press

SOURCE:
MSN.ca: “North American players looking at shale gas opportunities in Europe”

Realm Energy recently entered into direct and exclusive negotiations for petroleum and natural gas rights with a European Government in which the Company has identified a potential large-scale shale gas opportunity.  These lands cover an areal extent of over 182,000 hectares or 450,000 + acres. Consistent with most European countries, consideration for the award of these lands largely comprises a prudent work program over the life of the concessions.  Management is working toward reaching final agreement on these lands in the near future, at which time more detailed information will be disclosed.

Realm Energy is collaborating with Halliburton Consulting (NYSE: HAL) in aggressively evaluating high potential shale deposits throughout Europe and select emerging countries. Founded in 1919, Halliburton is one of the world’s largest providers of products and services to the energy industry. With more than 50,000 employees in approximately 70 countries, the company serves the upstream oil and gas industry throughout the life cycle of the reservoir-from locating hydrocarbons and managing geological data, to drilling and formation evaluation, well construction and completion, and optimizing production through the life of the field.

Realm Energy is now concentrating on eight discrete sedimentary basins in seven European countries and submitted applications for oil and gas rights that collectively extend over 1.5 million acres of land. Realm Energy received confirmation of receipt from government bodies that its applications are under active consideration.

“After months of rigorous evaluation, confirmation that our applications are under active consideration is an important step toward our goal of acquiring oil and gas rights over significant lands containing high-potential shale formations,” said Craig Steinke, Executive Chairman. “We stand behind our extensive evaluation process and strongly believe that Realm Energy is positioned to maximize the possibility of favorable outcomes from these applications.”

SOURCE:  Scandinavian Oil-Gas Magazine

The rapid development and extraction of the unconventional gas in places like Haynesville and Marcellus in the Unites States have kick-started the ambition by some companies to look to Europe for vast, unexplored shale plays.

“Unconventional gas is unquestionably a game-changer in North America with potentially significant implications for the rest of the world,” said Nobuo Tanaka, Executive Director of the International Energy Agency in a November press release.

The International Energy Agency estimates that unconventional gas resources in Europe, including coal-bed methane, could amount to 35 trillion cubic meters, six times higher than the continent’s conventional gas resources.

Some oil companies have already begun capitalizing on Europe’s un-tapped shale plays. Royal Dutch Shell PLC, for example, is expected to finish drilling its first three wells by the end of March hoping to extract what one spokesman called “enough gas to cover Sweden’s gas needs for at least 10 years.”

Other companies, such as Vancouver-based Realm Energy International, have also announced the will aggressively continue the evaluation and the acquisition of high potential shale deposits throughout Europe (read: Realm Energy, Halliburton Driving Shale Play Development Outside North America).

The Oil & Gas Journal reports that countries currently being evaluated by international oil and gas companies include France, Germany, Austria, Poland, Hungary and the UK.

SOURCES:
International Energy Agency: Press Releases
Oil and Gas India: “Shell begins drilling for shale gas in Sweden”
Oil & Gas Journal