Full-year results from 3Legs Resources, which joined Aim in June, were overshadowed by news that US oil giant ConocoPhillips had taken a 70 per cent stake in its Baltic Basin shale assets. While that's a validation of 3Legs' work, there's a long way to go before any meaningful decisions on production – leaving the shares, which have slumped from the 190p float price, with limited near-term upside.
ConocoPhillips will take the lead operating role on the three western blocks – Lebork, Damnica and Karwia – with 3Legs retaining a 30 per cent interest. Significantly, ConocoPhillips has been a prominent player within the US unconventional oil & gas industry and will bring considerable technical knowledge, in addition to financial clout. Meanwhile, 3Legs successfully began drilling both the Lebien LE-2H and Warbino LE-1H wells during 2011's drilling campaign. Initial horizontal drilling at the former encountered high gas saturations, while a vertical shaft at the latter indicated a deeper prospective interval. That campaign appears to have convinced ConocoPhillips of the potential of the western licences. It plans to drill a vertical well in the Lebork concession later this year, with an option to drill a horizontal section later.