Ascent Resources ups Petisovci project interest

Europe-focused oil and gas developer Ascent Resources (LON:AST) has, through  Ascent Slovenia Limited (ASL), increased its interest in the Petisovci project in Slovenia after acquiring Kulczyk Oil Ventures Inc's 30% stake in the Dolina shallow oil field and 10.5% stake in the Globoki deep gas field.

Ascent will make a “small cash payment” in exchange for the assets and also pay a royalty of US$60,000 for each billion cubic feet of independently certified gas reserves produced in the future. The company will now assume all development costs related to the acquired interest.

The 300 bcf (billion cubic feet) Petisovci project is contiguous to the Ascent’s Lovaszi project in Hungary. Both projects will be key to the company’s 2010 work programme with four wells targeted based on the results of the processing of 3D seismic data, which exceeded expectations. The data extended the project area and mapped over 12 new drilling targets with a total estimated potential of over 75 bcf of recoverable gas.
Further 3-D seismic has been acquired in this area and processing of this data is currently underway.

The original Petišovci project area covers 35.5 square kilometres 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 square kilometre project area Ascent, through ASL, has a 75% interest in both the shallow and the deep reservoirs, which is in partnership with Geoenergo only. 

“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 Peneszlek 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,” said managing director of Ascent Resources Jeremy Eng.

Ascent has pledged to focus on realizing the near-term potential of the Petisovci-Lovaszi project areas.

Broker Astaire Securities agreed, saying that Petisovci was a critical project for the company and the news confirmed its expectations of an increased working interest. In another broker note, Fox-Davies Capital went a little further, saying that this was an “excellent deal” for Ascent, “conservatively” estimating the increase in net unrisked recoverable resources resulting from the deal at 2.4 mmbbls (million barrels) of oil and 15.75 bcf (billion cubic feet) of gas. FD Capital said that this equated to an aggregate increase of some 1.4 mmboe (million barrels of oil equivalent) of net risked recoverable resources.

In the adjacent Hungarian part of the project, Ascent has a 50% interest in an area of 90 sq km in partnership with MOL Oil and Gas.

Ascent Resources has interests in a diversified portfolio of hydrocarbon exploration and development projects across several countries in Europe: Italy, Hungary, Slovenia and Netherlands.  Ascent's portfolio contains a solid base of field redevelopment projects with selected exposure to exploration upside.  The portfolio is focused on gas and with the exception of the shallow water Netherlands project, all of its projects are located onshore where operating and development costs are substantially lower than they would be offshore.