PetroHungaria kft (a 90% owned subsidiary of Ascent), started drilling the PEN-102 well on 26 April 2007. On Monday at 6 a.m. CET, the rig was drilling ahead in 12-1/4" hole at 504m with a planned total depth of 1,500m.
Partners in the well are DualEx of Canada (37.5%) and Petro Pequnia of Sweden (2%) and under the farm-out agreement, DualEx will pay 75% and Petro Pequnia 4% of the costs of this well with PetroHungaria kft funding the remaining 21%.
The PEN-102 well is an appraisal well of a gas discovery made in 1983 at PEN-12. The well will target lower Miocene tuffaceous reservoir rocks, which produced in the Peneszlek gas field roughly five kilometers to the east. In addition, the prospect includes a shallower Pannonian Sand target of the same age as that successfully tested in the PEN-104 well, the gas discovery announced in November 2006. In relation to the development planning for PEN-104, PetroHungaria and its partners are evaluating the incremental reserves of two nearby suspended wells, including PEN-12 drilled in the 1980's. These wells both produced gas on test from the Miocene formations but were never placed on production.
After drilling PEN-102, the rig will move to drill the VAM-1 well, which is designed to test exploration prospects in both the Miocene and Pannonian formations in the Vamospercs area, roughly 18 kilometers to the southwest of the Peneszlek field.
Ascent's Managing Director Jeremy Eng said, "The Hungarian operations are an important part of our European gas orientated portfolio. The new wells have the potential to increase reserves as well as to produce gas in the short-term, thereby providing additional cashflow for the Company. These wells are the option wells under our farm-in agreement and PetroHungaria retains a 60.5% working interest.
"Additionally, the tight gas redevelopment project in the southwest of Hungary, in association with MOL, the Hungarian oil and gas company continues to progress. This project also has great potential and consolidates our Company's position in Hungary."
Garry Hides, CEO of DualEx, commented, "We're pleased to be back drilling at Nyirség. Each of these two wells could add significantly to the already demonstrated potential of the blocks. Once we've completed earning our final working interest with these wells we can move forward with our partners to more fully evaluate the blocks."
Ascent Resources has a portfolio of over 20 gas and oil projects across six countries in Europe. The projects are onshore in Italy, Switzerland, Hungary, Spain, Slovenia and offshore Netherlands. Ascent is at present drilling a program of exploration wells across its portfolio. The Company operates Spain's only onshore oilfield where production currently averages over 110 barrels of oil per day. With the stable European gas market, Ascent's portfolio favours gas over oil. 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.
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