Luckily, according to Wolf Regener, president and chief executive officer, BNK Petroleum, the company is in a liquids-rich play with its Tishomingo field in the Woodford Shale in the Ardmore Basin in Oklahoma.

BNK Petroleum has been operating shale-gas projects since early 2005 with four different U.S. projects. The Tishomingo field is the project that works economically for the company, he told participants during the Hart Energy DUG 2012 conference in Ft. Worth, TX, while participating on a panel of first-movers addressing “International Unconventionals -- Taking The World By Storm” on April 24.

“Since we have one of four projects that worked for us economically in the U.S., we wanted to go somewhere that has a large enough acreage position to get into multiple plays. We also want to take in partners to de-risk some of these reservoirs and still have enough to make an impact on PNK,” he explained.

“Europe has a lot of gas, and no one has been looking there for shale,” Regener said. “We drew a line from Poland to Turkey and said, ‘let us focus west of there.’”

That’s how BNK Petroleum ended up with a little over 1.0 million net acres in Poland, nearly 3.0 million acres in Germany and about 400,000 net acres in Spain. The company also hopes to be awarded another concession in Spain that will bring its total there to 600,000 acres.

“Royalties are anywhere from 0% in Poland to 10% to 20% in Germany. Gas prices in both Poland and Germany, you can see nice strong gas prices of $8 to $10 per thousand cubic feet (Mcf). And corporate tax rates are anywhere from more attractive than the U.S. to very comparable to the U.S.,” Regener continued.

In Poland, the company has drilled three wells on its Saponis blocks -- the Wytowno, Lebork and Starogard. “We’ve been at this four abou four years. We were one of the first companies in there,” he said.

The company had an 80% interest in those three blocks. BNK farmed out 54% and now has a 26% interest. “We had someone else pay for the first $25 million in drilling and completion costs,” he explained.

Just south of the Saponis blocks, BNK has its Indiana blocks where it has 100% interest in 880,000 acres. A fourth well -- the Miszewo on the western edge of these blocks -- was drilled to permitted depth, which is about 200 m (660 ft) short of the target depth.

“We’re going to move the rig to the Gapowo location, and we’ll drill that well. Afterwards, we should have the approval to deepen the Miszewo so we can move back onto that well,” he continued.

“The Miszewo and Gapowo wells are where we are looking to prove up our concept. Our concept is that we need to find the deeper part of the basin where the higher organics are and the shale is thicker. Our geological and geophysical guys came up with a shale-to-carbonate ratio since carbonates are more on the edge of the basin where it is depositionally. That’s all pointing down to our Indiana acreage. As the ratio numbers get higher, you have more shale and less carbonates,” he stated.

One problem in Poland is that companies tend to operate independently. “There’s not much data sharing going on. We’re trying to change that right now. There are some companies that have indicated a willingness to do so,” he emphasized.

For example, several common problems could be addressed by sharing information, he pointed out. “We see some quite ineffective fracture stimulation. We’ve learned a lot from the fracture stimulation we’ve done -- or I should say we attempted to do. We haven’t quite figured how to get the permeability there yet,” Regener explained.

“We’ve learned to not go in with slick-water fracs but with gel-type frac system. We also learned to go with harder, stronger proppant so we can keep the fractures open. We’ve had some flow coming out of our well, but nothing material just because of the ineffective fracture stimulation,” he continued.

In Germany, BNK has completed a field program of looking at rock outcrops. “We are currently permitting a 2D seismic program. We spent the last year educating federal, state, county and local regulators so that people understand what shale gas is and the risk associated with it is just normal for oil and gas drilling,” he noted.

One of the aspects of the program that surprised the company is that its primary target had very high clay content (50% to 55%). The carboniferous was the secondary target.

“The carboniferous looked excellent. It was nice and thick, and it looked very attractive to pursue. This looks like one of the top plays we’ve found,” he added.

The company has gone through the environmental impact assessments needed to drill the first horizontal shale gas well in Spain. “Our goal is to drill our first well in the fourth quarter. However, we’re not sure how long it will take for the Spanish government to approve the permit and it might slip into early next year,” Regener said.

He also pointed out that the company is seeking farmout partners for both Poland and Spain. “We have a data room open for Spain, but not yet for Poland. The data room for Poland should be open in a few weeks,” he added.

“I think we have made good progress on this. We hope for the best as we finish drilling our two wells in Poland, and starting drilling in Spain and in Germany in 2013,” he emphasized.

Contact the author, Scott Weeden, at sweeden@hartenergy.com.