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Central European gas play Aurelian Oil & Gas (AUL:AIM) says it may bring in a major multinational partner to develop the Siekierki field in Poland.

The acreage is now the focus for the company and its size means it will take considerable capital expenditure to bring fully on stream. With ?27 million Aurelian has enough cash in the bank to fund the work programme for the next two years but will need to raise money after that. The challenge is to get reserves booked in order to secure finance for the rest of the project.

Commercial director Frank Jackson says: ‘We have some large shareholders who are very supportive. But there are a number of different strategies available to us. There is the possibility of bringing in a big operator that has experience of this sort of operation who can add technical expertise, perhaps Schlumberger, Haliburton, Devon Energy or Gaz de France, for example.

‘Over the next couple of months we will assess our options very carefully and make our decision,’ Jackson adds.

The company spudded its first well on the Siekierki structure in March last year, Trzek-1, and both drilling and testing are now complete. After fracture stimulation the well flowed at a rate of 7.5 million cubic feet (mcf) of gas and a stabilised rate of 2.5 mcf.

A long term test will now take place on Trzek-1 and a process facility will be installed and tied into the local infrastructure to allow gas sales from September 2009 with a number of contracts already being discussed.

The rest of the asset will be developed through horizontal drilling and the company hopes to drill two wells next year. The share price has drifted downwards to around 30p in recent months with drilling disappointment in Bulgaria. However, broker Fox Davies has reiterated its ‘buy’ recommendation on the stock with a price target of 85p, citing the improved visibility on the Sierkierki project.

by: Tom Sieber