Jolly Ranch Project
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Ascent Resources, through its asset management business with San Severina Holdings SA, the Swiss based investment company, is to be assigned an interest in the Jolly Ranch Project, an oil and gas development in Colorado in the United States of America. San Severina has agreed to purchase a 20% interest in the Project and will transfer 20% of this interest (a 4% interest in the Project) to Ascent on completion, which is expected to occur during June 2009. The other partners in the Project are the operator, Running Foxes Petroleum Inc, and Nighthawk Production LLC, a wholly owned subsidiary of Nighthawk Energy plc, each of whom will retain a 40% interest.
The Jolly Ranch Project is located in the south eastern part of Colorado in Lincoln and Ebert counties and is in the southern part of the Denver Basin. Hydrocarbon production is from multiple oil shale reservoirs as well as from both shallow and deep conventional reservoirs. 12 new wells have been drilled by Running Foxes over the last year and the 10 deep wells have all tested oil. Two shallow wells, which target the shallow Codell Cretaceous sands, have not yet been completed.
Jolly Ranch is the central part of the Project where some 50,000 net acres has been leased and where all the 12 wells were drilled. San Severina will pay an initial consideration of US $21.9 million and has an option to extend its participation into the other project areas at the time additional wells are drilled into each of six project extension areas. Running Foxes and Nighthawk have additional leases in the surrounding Middle Mist and Mustang Ranch areas, which with Jolly Ranch total some 370,000 acres (282,000 net acres). The consideration for the 20% interest and with the exercise of all the options in the project extension areas totals US $80 million.
Ascent Managing Director Jeremy Eng said, "We see the Jolly Ranch Project as an excellent start to our joint venture with San Severina and we look forward to taking up our interest in this very exciting project. This is to be the first of a number of projects that Ascent and San Severina plan to participate in together under the Asset Management Program and at this time we are studying a number of other opportunities and expect to announce further acquisitions in the near future."