The company has stabilized production from the Ayoluengo field, obtained permits for two appraisal wells to be drilled in known oil-bearing structures in its exploration areas and submitted an application for contiguous exploration acreage with known gas potential.
Last week, the Official Gazette of Spain published the final approval of the transfer of the 25% interest in the La Lora Concession from Petroleum Oil and Gas Espana to Ascent's affiliate NPEL (as announced on February 14th, 2006). As part of the consideration, Ascent is issuing 562,967 New Ordinary Shares at 12 pence per share (value of €100,000). Accordingly, application has been made for the admission of these new shares to trading on the AIM market where they will rank pari passu with the existing ordinary shares of 0.1 pence each in the Company. Dealings in the New Ordinary Shares are expected to commence on December 6th, 2006.
Production on the Ayoluengo oilfield within the La Lora Concession (Ascent: 88.75%, Gold Oil plc: 11.25%) has been maintained at over 110 barrels of oil per day for the past eight months (November average: 116 bopd) following the summer implementation of a workover program designed to improve well efficiency. Further production enhancements are being planned to increase production and further improve profitability by Q2 2007 including additional workovers, new oil production technology and enzyme treatments for enhanced oil recovery.
On the exploration front, permits for drilling have been granted for the Hontomin-4 Well in the Huermeces Concession and the Tozo-1 Well in the Basconcillos "H" Concession. Drilling will commence when the drilling rig arrives from Italy after drilling the Anagni-1 Well, which is scheduled to spud this week. Seismic interpretation is ongoing in the Valderredibles concession to map oil bearing prospects in that area.
Through its newly incorporated operating company, Compania Petrolifera de Sedano (CPdS), Ascent has submitted an application for exploration acreage to the east where two wells have discovered deep high pressure gas. Ascent, as in the other exploration areas, has a 50% interest in this Rocamundo application.
Ascent's Managing Director Jeremy Eng said, "We are making good progress in Spain. The Company benefits from the steady cashflow from the Ayoluengo oilfield and the prospect of higher production rates from the field and additional reserves from the new wells provides considerable upside. The expansion of the exploration areas demonstrates the viability of an exclusively European portfolio where there are still plenty of unlicensed opportunities to be exploited."
Ascent Resources has a portfolio of over 20 oil and gas projects across six countries in Europe. The projects are onshore in Italy, Switzerland, Hungary, Spain and Romania and offshore the Netherlands. Ascent is currently drilling a program of six exploration wells, two in Hungary and two each in Spain and Italy. In 2007, high impact gas exploration wells are also planned in the Po Valley in Italy and in Switzerland. Ascent plans also to participate in up to four non-operated exploration wells in the Aurelian Oil & Gas PLC led project in Romania (5% Ascent) where gas is produced from the Bilca development. Ascent also produces over one hundred net barrels of oil daily from Spain's only onshore oilfield.
With the strong and stable European gas market, Ascent's portfolio favors gas over oil and, with the exception of the Netherlands, all of its projects are located onshore where operating and development costs are substantially lower than they are offshore.
Ascent's directors are specialists in the oil and gas business and each director has expertise and experience in commercializing energy assets. The Company's Board and Executive Management provide the basis upon which Ascent can accommodate the rapid growth that the Company plans in the short term.
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