Ascent Resources Zeroes in on E&P Strategy, European Portfolio
Ascent Resources has provided an update on its current strategy and portfolio ahead of its Annual General Meeting.
Ascent continues to advance its strategy of participating in European onshore assets with high upside potential, focused primarily on gas. The Company maintains a balanced portfolio of development, appraisal and exploration projects, prioritising reserve growth over production. It targets high initial equity participation, especially for exploration, and focuses on operated projects utilizing local operating entities. The Company currently has some 20 operated projects across five countries in Europe: Hungary, Slovenia, Italy, Switzerland and the Netherlands.
Ascent's business model is centred on debt/equity funding for development projects and farmout for exploration projects, as demonstrated by the Nyírség Project in Hungary and the Gazzata-1 well in Italy. With Gazzata, the Company had an initial 100% interest but farmed-out 50% in return for being carried on drilling and seismic costs.
Activity For The Remainder Of 2009
Nyírség -- Penészlek Area Development -- Hungary
The Penészlek gas field, Ascent's primary producing asset, has a current production rate of 4.2 MMscfd. The Company, in conjunction with its partners, is planning a number of further development wells in the area to maximise the potential of the gas field and increase production. In particular, site preparation for the PEN-105 is underway with drilling scheduled to start on July 31, 2009. Additionally, the drilling of a further three development wells, PEN-101, PEN-106 and PEN-104AA, are planned in the Penészlek area in the near future and the evaluation of a number of further PEN locations is underway. With current low royalty rates, strong gas prices in the range from €5.70 to €9.10 per 1,000 cubic feet, shallow wells and low operating costs, production of Penészlek gas has strong margins at current prices.
Petisovci Redevelopment -- Slovenia
This project involves the redevelopment of the previously producing Petisovci oil and gas field. Permitting for a 3-D seismic acquisition in the Petisovci area is ongoing with the acquisition of data over an area of 90 sq km starting in August. Additionally, Ascent Hungary Limited (a wholly-owned subsidiary of AST) plans to carry out a follow-up acquisition in the adjoining Lovaszi area in Hungary. The Board believes that there could be substantial potential with estimates for tight gas reserves of up to 300Bcf and shallow oil targets in the range of 5 to 10 million barrels. Importantly, due to the area's historical production, the infrastructure is in place, which would enable the rapid development of any discovered reserves.
Latina Valley Frosinone Exploration Permit -- Italy
The Anagni appraisal well, planned for September 2009, is designed to appraise the shallow part of the Anagni structure in the Latina Valley, a proven oil producing region to the south east of Rome. The location of the well was chosen from seismic acquisition conducted in 2008 and Ascent is currently in the process of obtaining permission to begin drilling. The drilling of the Anagni-1 well in 2008 proved the presence of good reservoir characteristics and recovered small quantities of 'live' oil.
Nyírség -- Panhandle Development -- Hungary
A 3-D seismic survey has been acquired in the Panhandle area of the Nyírség permit and plans for an exploration well are advanced. The location for the Görbeháza-1 well (Gh-1) has been agreed and drilling is expected to commence in September 2009. Additionally, three follow-up locations are under evaluation. This project has been farmed out to Hungarian Horizon and JKX. Hungarian Horizon, the second biggest gas producer in Hungary has taken over as operator.
Filovci Development -- Slovenia
This is an eastern Slovenian exploration project where 3-D acquisition is planned for the fourth quarter of 2009. A 200 sq km survey is currently under permitting, which will target an area where previous wells have produced both oil and gas.
Other Interests -- Development/Redevelopment
Ripi Oil Field Redevelopment -- Italy
The Company is in the process of acquiring permission to conduct a shallow high resolution seismic survey to assess redevelopment potential for the Ripi oil field. The survey will also enable Ascent to assess the potential of the deeper structures on the site.
Bajcsa Gas Field Redevelopment -- Hungary
Following the completion of geophysical studies conducted over an 18 months period, plans for the redevelopment of the Bajcsa gas field are being considered.
Other Interests -- Appraisal
Hermrigen Gas Field Appraisal -- Switzerland
The Hermrigen-1 well was drilled by Elf Aquitaine in 1982 and discovered and tested gas in a secondary target. The well never reached its deeper primary target due to mechanical problems. Following extensive analysis of the geological and seismic data and further geochemical analysis, Ascent has designed an appraisal well for the original gas discovery that will also have the capability to drill down to the primary target of the Hermrigen-1 well. The Company is seeking partners for this project.
M-11 Gas Field Appraisal -- Netherlands
Drilling plans are well advanced on this block which contains an extension of an existing gas field and oil discovery. The Company is evaluating a number of options for maximising the value of these assets.
Gros de Vaud Oil Discovery -- Switzerland
The Vaud concession contains the Essertines-1 well drilled in 1962, which tested oil. An appraisal of this discovery is being evaluated as are the exploration of the nearby Triassic gas prospects.
Other Interests -- Exploration
Cento and Bastiglia Exploration Permit -- Po Valley Italy
Following the analysis of the results of the Gazzata-1 well on the Bastiglia permit, partners are currently considering possible future exploration plan for this gas prone exploration permit.
Fiume Arrone Exploration Permit -- Latium Coast Italy
Ascent is awaiting the issuance of a licence extension submitted to the authorities following the drilling of Arrone-1, which found sub-commercial gas in 2007.
Concordat -- Switzerland
An oil and gas exploration project in north-eastern Switzerland. The Company has no immediate plans for work on this project.
P4, M8 Gas Field Exploration -- Netherlands
Situated offshore of the Netherlands, the Company has completed a preliminary geoscience program to establish the hydrocarbon potential of the area.
San Severina Asset Management
The Company has a Joint Venture with a Swiss fund, San Severina (Holdings) SA, seeking to invest in substantial minority interests in producing, development or appraisal oil and gas projects. It has been agreed that Ascent will manage these assets on behalf of San Severina and be assigned 20% of San Severina's interest. Projects are not geographically limited and would provide the opportunity for Ascent to expand outside its European focus area.
Perazzoli Drilling srl
Ascent maintains its minority 22.5% interest in Italian drilling contractor Perazzoli Drilling srl. This owns three rigs, a 40 tonne Ballerini and a 100 tonne Corsair 300, and a 200 tonne Drillmec HH200.