PetroHungaria to Sidetrack Peneszlek Gas Production Well in Hungary

PetroHungaria kft (in which Ascent Resources holds a 45.23% interest) is planning to sidetrack the PEN-104 gas production well in the Peneszlek Development Area of eastern Hungary. The well has been shut-in due to the failure of a compressor at the downstream gas processing facility which has caused unusually high export pipeline pressures. PetroHungaria, which operates the well, expects that a 450m sidetrack of the well will substantially increase the potential recoverable gas and will reduce the amount of water produced by the well.

Subject to permitting and rig availability, the side-tracked PEN-104 well could be ready to produce gas by the time repairs to the compressor are due to be completed in March 2009 which will reduce the pipeline pressure to its normal operating range.

The PEN-104 sidetrack opportunity has been identified from the analysis and interpretation of the 3D seismic survey that was acquired in November 2008. In addition to this sidetrack, the partners have also approved the sidetrack of the PEN-102 well drilled and suspended by PetroHungaria in 2007 (which is anticipated to occur immediately following the PEN-104 sidetrack). Also, the partners are considering three other development projects, all of which were identified with the new 3D seismic survey. These include the re-drill of PEN-9 and PEN-12, and a new well to produce from a structure south of PEN-12.

The new seismic shows that neither the existing PEN-9 or PEN-12 wells are situated in an ideal location for producing their associated reserves, although a sidetrack of PEN-12 is being considered as an option. While the PEN-104 and PEN-102 sidetracks can proceed quickly because of land access agreements already in place, the additional wells will require a full permitting procedure and are unlikely to be drilled until third quarter 2009. Potentially one to three wells to redevelop the prematurely abandoned Peneszlek Miocene field could also be drilled this year however the deeper sections within the 3D survey are still being evaluated.

The other partners in the Peneszlek Project are DualEx (37.5%), Geomega (8%), Leni Gas & Oil (7.27%) and Swede Resources (2%).

Jeremy Eng, Ascent's Managing Director commented, "The results of the 3D seismic acquisition have been excellent, and with the possibility of five producing wells in the medium term and with much of the infrastructure already in place, this is potentially a valuable development."