Ascent Resources plc has agreed to divest an interest in two of its Hungarian gas development projects to fellow AIM Company Leni Gas and Oil plc ("LGO"). LGO will purchase a 7.27% interest in PetroHungaria kft and a 14.54% interest in ZalaGasCo kft from Ascent for a cash consideration of EU2 million.
PetroHungaria kft owns a 100% interest in the Peneszlek gas development project in the Nyirseg exploration permits in eastern Hungary while ZalaGasCo kft owns a 50% interest in the Bajcsa gasfield redevelopment project in western Hungary. On completion of the divestment, Ascent will have a 45.23% interest in the Peneszlek project and a 38.73% interest in the Bajcsa project.
The Peneszlek gas development project is centred on the development of the PEN-104 discovery that was drilled and tested by PetroHungaria in 2006. A workover rig has just finished completing and re-testing this well and the production facilities are scheduled to be delivered later this month. The completion testing confirmed the excellent productivity of the PEN-104 well and production will commence once the hook-up to the pipeline is completed and authorisations received. In addition to the planned tie-in of the PEN-9 and PEN-12 wells, further appraisal of the area will be undertaken with the acquisition of approximately 100 sq km of 3-D seismic, including the area of the partially depleted Peneszlek field, which is a candidate for re-development.
The Bajcsa gasfield redevelopment project is a 50:50 joint venture with MOL RT, the leading Hungarian oil and gas company. The joint venture will undertake the redevelopment of the Bajsca gasfield with the drilling of horizontal wells in to the proven productive gas reservoirs. The first two wells are planned as re-completions of existing wells and the operations will commence as soon as the drilling permits are issued. Work has already commenced to enable access to the well sites. As these wells were previously on production they are already connected to the field gas processing facilities and therefore production can start immediately they are completed.
In a modification to the previous agreement with LGO regarding the farm-in to Ascent's Hermrigen gas appraisal project in Switzerland, Ascent have agreed to grant LGO the option to take a 10% participating interest in this project and in the Seeland Freinisberg Exploration Permit for a further payment of EU2 million payable on the date of the exercise. This two year option may be withdrawn by Ascent at its sole discretion, so long as it has not already been exercised.
Jeremy Eng Ascent's Managing Director said, "We are pleased to welcome Leni Gas and Oil as a partner in our Hungarian development projects. We aim rapidly to develop our activities in Hungary and secure cash flow from the production and sale of gas to the local market."
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