Ascent, through its subsidiary Ascent Slovenia ('ASL'), has increased its interest in the Petišovci project in Slovenia, following the transfer of Kulczyk Oil's (formerly Loon Energy) ('KOV') 30% stake in the Dolina shallow oil field, and 10.5% stake in the Globoki deep gas field. In addition to a small cash payment, a royalty will be paid by ASL to KOV of an additional $60,000 for each billion cubic feet of independently certified 2P gas reserves produced in the future, applicable to the acquired interest. Under the terms, Ascent will assume all development costs related to the acquired interest.
The Petišovci project, which has been independently estimated to have gas reserves in excess of 300bcf, is contiguous to the Company's Lovászi project in Hungary. Both projects are key to Ascent's work program for 2010 with four wells, currently under sole risk, targeted over the projects this year. These targets follow the results of the processing of 3D seismic data announced in March 2010.
The original Petišovci project area covers 35.5 km2 with ASL being partnered in the joint venture by Geoenergo and Stratic Energy. Following the transaction, ASL now has a 75% interest in the shallow oil and gas reservoirs and a 26.25% interest in the deeper tight gas reservoirs in the original project area. In the surrounding additional 61.5 km2 project area Ascent, through ASL, has a 75% interest in both the shallow and the deep reservoirs, which is in partnership with Geoenergo only.
In the adjacent Hungarian part of the project, Ascent, through its wholly owned subsidiary Ascent Hungary, has a 50% interest in an area of 90 km2 in partnership with MOL. Further 3-D seismic has been acquired in this area and processing of this data is currently underway.
Ascent Managing Director Jeremy Eng said, "Our current focus is built around the near-term potential of the Petišovci-Lovászi project areas. By securing an additional stake with payment on a royalty basis, we have substantially increased the potential upside from this project for our shareholders. With production and revenues now online from the Penészlek project in Hungary, we are cash positive and our efforts can be concentrated on the areas of our portfolio that could substantiate a drastic re-rating of our assets."
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