Ascent Resources has entered into agreements for the acquisition of 90% interests in two exploration joint ventures. The activities of the joint ventures are in the Netherlands and the in the Molasse Basin of western Switzerland.
The Dutch Joint Venture is with GTO and targets un-appraised gas discoveries and exploration both onshore and offshore. GTO is an exploration company that has successfully farmed out the four blocks it was awarded in the UKCS 21st Licensing Round to a consortium of three major UK independent oil companies. GTO and Ascent are to agree work programs and budgets which for the first year are estimated to be £50,000. Ascent will fund 100% of the costs for its 90% interest. Additionally bonuses to GTO payable in new Ascent Ordinary Shares will be made according to the following milestones:
Issue of exploration license £50,000
Issue of production licenses £100,000
Commencement of production £300,000
The shares will be issued at a price equal to the average of the closing share price for the six months prior to achievement of the relevant milestone.
The Swiss Joint Venture with SEAG (Swiss Petroleum) targets three areas in the western part of the Molasse Basin. The first contains an unappraised oil discovery made by BEB (ExxonMobil & Shell) in 1962 and the second and third each contains an un-appraised gas discovery made by Elf Acquitane in 1972 and 1982. The first year's work program includes seismic reprocessing and associated geological studies. Ascent will fund 100% of the costs through the drilling of the first exploration well for its 90% interest.
Along with its Hungarian project, Ascent now has three European joint ventures in which it has 90% participation in each. Ascent also has its Gabon interests where the first well is now scheduled to be drilled in July of this year.
The acquisition of the Swiss Joint Venture was made through the purchase of Borona Holdings Limited, a company owned by Jeremy Eng. The company's sole asset is its interest in the Swiss Joint Venture and the consideration is 2 million ordinary Ascent shares. On the basis of the mid-market price at the close of business on April 4, 2005 of 5.25p, Borona Holdings Limited is valued at £105,000. As a consequence of this acquisition, Jeremy Eng is interested in 2,000,000 Ordinary Shares of the Company, representing 1.3 percent of the issued share capital of the Company.
The acquisition is a further step in Ascent's building of a portfolio of majority owned European oil and gas projects.