Oil Report

Conoco sees promise in Polish shale gas-exec

HOUSTON, Sept 9 (Reuters) - ConocoPhillips COP.N, the third-largest U.S. oil major, said on Wednesday it has signed an exploration and evaluation deal targeting shale gas in Poland.

The agreement with Lane Energy gives ConocoPhillips the option to earn 70 percent and operate up to 1 million acres, Larry Archibald, the company’s vice president of exploration, told the Barclays Capital energy conference in remarks broadcast on the Internet.

The acreage in northern Poland is flat, easy to reach and any natural gas produced can go into the European Union market, which has good demand, Archibald said.

“What’s not to like about this type of play?” the executive said.

Shale reserves hold vast amounts of natural gas. They are unlocked by drilling horizontal wells and fracturing the rock at various intervals deep underground.

ConocoPhillips, based in Houston, said it expects to drill its first well in Poland in the first quarter of 2010.

Meanwhile, in North America where natural gas prices recently fell to seven-year lows, ConocoPhillips is scaling back its drilling in many areas.

Archibald said the company did not “feel a lot of pressure to drill up” its North American shale positions at current prices. (Reporting by Anna Driver in Houston, editing by Dave Zimmerman)