The new agreement supersedes the farm-in agreement with Deltana, previously announced on 1 August 2007. The terms remain essentially unchanged with Deltana and Otto paying a contribution towards the project back costs and the purchase of existing seismic data. Deltana and Otto will also pay 100% of the cost of the first exploration well and 100% of the cost of a second exploration well if the first well discovers commercial quantities of gas. The future value of the farm-in package amounts to circa £13 million.
Ascent Managing Director Jeremy Eng said, "The latest phase of exploration in the Po Valley uses state-of-the art techniques in seismic processing, which still further improves the already impressive success rate in gas exploration in the region. The Cento and Bastiglia permits, which are among the largest in the area, have multiple exploration targets as well as established infrastructure close to hand. This farm-out again confirms the strength of Ascent's strategy and demonstrates the depth of the Company's portfolio of European projects."
The Po Valley, which extends across the northern part of Italy from Turin in the west to Venice and Ravenna in the east, is the one of the most productive areas for gas and oil onshore Europe. Since the 1950s, over 130 fields have been put on production. Ascent's exploration permits are centrally located near the cities of Modena to the south, Mantova to the north and Bologna to the southeast.
Otto Energy Limited is an Australian public company with projects in Turkey, Argentina and the Philippines. The division of the 50% participating interest between Otto and Deltana are subject to an agreement between those two companies and their participating interests are to be finalised by March 31, 2008.
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