Ascent Resources has provided an operations update ahead of this afternoon's Extraordinary General Meeting to approve the proposed placing to raise £6 million.
Ascent has an active schedule in place for 2010, having made considerable progress in 2009, advancing its European onshore assets and completing a fundraising to focus on those projects that can produce near term cash flow. Drilling is planned in the first part of next year in Hungary and Slovenia and further 3D seismic is to be acquired in Hungary. Currently, the Fontana-1 well is being drilled in Italy and the second 3D seismic survey has recently completed in Slovenia. A licence extension to the end of 2010 has been granted for the M10/11 appraisal project in the Netherlands and a recently launched farm-out initiative for the Hermrigen appraisal project in Switzerland has generated early interest.
Ascent Managing Director, Jeremy Eng said, "The Penészlek Project in Hungary will provide cashflow from production, which is scheduled to restart early in 2010. With our successful wells at the PEN-101 and PEN-106 locations, cashflow from these is expected to increase during the year and is forecast to continue for at least two years beyond. Our projects in south eastern Slovenia and south western Hungary, where the new 3D seismic has recently been acquired and where a third survey is planned next year, have potential to contain gas reserves of at least 300 Bcf. This is significantly greater than that at Penészlek; therefore the proving up and development of these reserves is the primary focus for 2010 and we aim to invest a significant amount as a result of the proposed placing."
On November 27, 2009, Ascent announced a fundraising of £6 million at 5p per share. The funds raised will be used to accelerate the development of, and cash returns from, the Company's balanced portfolio of European oil and gas production and exploration projects. Due to the better than expected results from the 3D seismic at the Petişovci oilfield in Slovenia, this area will be a key focus for investment.
At the Penészlek gas production project in Hungary, preparations are on-going for the drilling of the PEN-101 and PEN-106 wells. PEN-105 is awaiting the completion of its pipeline connection to commence production and the PEN-104AA sidetracked well is awaiting specialist equipment, expected to be available in January, to continue testing operations. The 101 location is adjacent to the 105 pipeline route and the 106 well will require a 2 km pipeline tie-in for which the permit has already been obtained. This project is expected to provide profitable cashflow for the Company during 2010 and for at least two years after that. At the Company's other project, Lovaszi, close to the Slovenian border and adjacent to the Petisovci project, a 3D acquisition over approximately 100 sq km is planned for April.
The Filovci 3D acquisition in Slovenia has now been completed over a 200 sq km area and at least two wells are planned to be drilled in this area during 2010. The Petisovci 3D survey of over 100 sq km, which was completed in October this year, is currently being processed. Preliminary results are very encouraging with the primary objectives clearly defined and new, untested, prospects already identified. Drilling plans will be finalized early in 2010, with both sidetrack opportunities from existing and new wells under consideration. These surveys (including that in Hungary) cover the areas of the Petişovci and Lovaszi oil and gasfields, which both have shallow oil and gas and deeper tight gas reservoirs. The potential for future production is in the deep horizons and flanks of the shallow structures, where already undrilled fault blocks are evident in the seismic data.
In Italy, the Fontana-1 geological evaluation well is progressing slowly. 7.55" casing was set and cemented at 284m and the well is now drilling ahead in the 6-3/4" hole section. The slow progress is due to drilling being possible only during daylight hours, on a five day per week basis. It is also weather dependent.
The M10/11 offshore gas appraisal project in the Netherlands has been granted by the Ministry of Economic Affairs, providing the Company with an extension to the drilling decision until December 2010. Having completed the assessment of the two Rotliegendes gas prospects, work in progress includes the assessment of development options and the viability of a subsea development in the shallow near-shore environment. The licences for exploration in the M8A and P4 blocks have been relinquished.
The Company has a new farm-out initiative for the Hermrigen gas appraisal project in the Canton of Bern in Switzerland. This project plans to drill an appraisal well to the Hermrigen gas discovery that was previously drilled by Elf Aquitaine in 1982 and a number of industry partners have expressed interest in examining the technical data in more detail.
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