Ascent Resources Raises Funds for Bajcsa Field Redevelopment Project
Ascent Resources has placed convertible loan notes with institutional funds managed by CIM Investment Management to raise £2.5 million. The proceeds will be primarily used to advance the redevelopment of the Bajcsa gasfield in southwestern Hungary as well as for the Company's general working capital and capital expenditure requirements.
The loan notes, which carry interest of 8.5% per annum, are convertible into 12,500,000 ordinary shares of 0.1p each in the Company at a conversion price of 20p per Ordinary Share on or before November 14, 2010. The loan notes have a call option at 40p per share and interest is to be paid twice annually in arrears. The holder of the loan notes will also be issued 4,375,000 warrants for Ordinary Shares in the Company at an exercise price of 30p per Ordinary Share and exercisable on or before November 14th 2010. The average closing mid price of an Ordinary Share over the last 25 days was 17.3p.
The main purpose of this convertible loan is to enable Ascent to fast track its Hungarian gas development projects.
In the Bajcsa redevelopment, being carried out in conjunction with partners MOL, the first horizontal recompletion is planned to commence, subject to rig and equipment availability, towards the end of December 2007 and to take about a month to complete. As a recompletion, this well will have the capability of immediately being put into production and therefore to generate cashflow from gas sales.
In the Peneszlek development, the first 20km of the 31km export pipeline has been satisfactorily pressure tested and the final section is now being tested. It is planned that three wells, including the PEN-104 discovery, will be incorporated in to the first phase of development.
A new operating permit has been issued by the Italian authorities for the continuation of the Anagni-1 test operations and for a plug-back at the bottom of the open-hole section before January 31, 2008. The latest information from the core samples taken from the well indicates that there is mobile oil in the well down to 1,205m. The deepest core taken at 1,350m appears to contain residual oil. To ensure a conclusive test result and to investigate only the more prospective interval, it is planned to completely isolate the deeper residual oil section by plugging-back from the bottom of the well to 1,170m.
To date, about 75% of the fluids lost while drilling have been recovered, and pumping has now been suspended pending the arrival of a lightweight workover rig, expected early December 2007, to carry out the plug-back operation in the well.
In the Ascent operated Cento and Bastiglia permits in the Po Valley, Ascent is continuing with the planning and permitting of the Gazzata-1 well. It is intended that this well will be one of the first wells to be drilled by the new rig under order by Perazzoli Drilling, the drilling contractor in which Ascent holds a 22.5% equity interest.
Following the approval of the reverse takeover by Leni Gas and Oil plc's shareholders, their farm-in to the Ascent operated Swiss Seeland-Frienisberg Permit (in addition to the sale of Ascent's Spanish oil assets) can now proceed. The partner group plan to agree the location of the first well to be drilled as soon as possible. A drilling slot for the new-build Perazzoli Drilling rig is also reserved for this well.
Ascent Managing Director Jeremy Eng said, "Good progress is being made by Ascent on a number of fronts. Although operations in Anagni-1 are frustratingly slow, the results to date are encouraging, especially the latest information from the cores which appears to show oil down to at least 1,205m and therefore may indicate a substantial oil column. If production can be initiated in our two Hungarian projects and we drill both the Swiss and the Italian Po Valley wells, then 2008 is shaping up to be a very important year for Ascent."
The information contained in this announcement has been reviewed and approved by Gavin Ward, Ascent's Exploration Manager (member of the Association of American Petroleum Geologists) who has 19 years relevant experience in the oil and gas industry.
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