Ascent Resources Regulatory News (AST)

14 Nov 2007 11:30

Ascent Resources PLC14 November 2007 Ascent Resources plc / Epic: AST / Index: AIM / Sector: Oil and Gas Ascent Resources plc ("Ascent" or "the Company") Placing and Operational Update Ascent Resources plc, the AIM-traded oil and gas exploration and productioncompany, has placed convertible loan notes with institutional funds managed byCIM Investment Management to raise £2.5 million. The proceeds will be primarilyused to advance the redevelopment of the Bajcsa gasfield in south westernHungary as well as for the Company's general working capital and capitalexpenditure requirements. The loan notes, which carry interest of 8.5 per cent. per annum, are convertibleinto 12,500,000 ordinary shares of 0.1p each in the Company ("Ordinary Shares")at a conversion price of 20p per Ordinary Share on or before November 14th 2010.The loan notes have a call option at 40p per share and interest is to be paidtwice annually in arrears. The holder of the loan notes will also be issued4,375,000 warrants for Ordinary Shares in the Company at an exercise price of30p per Ordinary Share and exercisable on or before November 14th 2010. Theaverage closing mid price of an Ordinary Share over the last 25 days was 17.3p. Operational Update Hungary The main purpose of this convertible loan is to enable Ascent to fast track itsHungarian gas development projects. In the Bajcsa redevelopment, being carried out in conjunction with partners MOL,the first horizontal recompletion is planned to commence, subject to rig andequipment availability, towards the end of December 2007 and to take about amonth to complete. As a recompletion, this well will have the capability ofimmediately being put into production and therefore to generate cashflow fromgas sales. In the Peneszlek development, the first 20km of the 31km export pipeline hasbeen satisfactorily pressure tested and the final section is now being tested.It is planned that three wells, including the PEN-104 discovery, will beincorporated in to the first phase of development. Italy A new operating permit has been issued by the Italian authorities for thecontinuation of the Anagni-1 test operations and for a plug-back at the bottomof the open-hole section before January 31st 2008. The latest information fromthe core samples taken from the well indicates that there is mobile oil in thewell down to 1,205m. The deepest core taken at 1,350m appears to containresidual oil. To ensure a conclusive test result and to investigate only themore prospective interval, it is planned to completely isolate the deeperresidual oil section by plugging-back from the bottom of the well to 1,170m. To date, about 75 per cent. of the fluids lost while drilling have beenrecovered, and pumping has now been suspended pending the arrival of alightweight workover rig, expected early December 2007, to carry out theplug-back operation in the well. In the Ascent operated Cento and Bastiglia permits in the Po Valley, Ascent iscontinuing with the planning and permitting of the Gazzata-1 well. It isintended that this well will be one of the first wells to be drilled by the newrig under order by Perazzoli Drilling, the drilling contractor in which Ascentholds a 22.5 per cent. equity interest. Switzerland Following the approval of the reverse takeover by Leni Gas and Oil plc'sshareholders, their farm-in to the Ascent operated Swiss Seeland-FrienisbergPermit (in addition to the sale of Ascent's Spanish oil assets) can now proceed. The partner group plan to agree the location of the first well to be drilled assoon as possible. A drilling slot for the new-build Perazzoli Drilling rig isalso reserved for this well. Ascent Managing Director Jeremy Eng said, "Good progress is being made by Ascenton a number of fronts. Although operations in Anagni-1 are frustratingly slow,the results to date are encouraging, especially the latest information from thecores which appears to show oil down to at least 1,205m and therefore mayindicate a substantial oil column. If production can be initiated in our twoHungarian projects and we drill both the Swiss and the Italian Po Valley wells,then 2008 is shaping up to be a very important year for Ascent." The information contained in this announcement has been reviewed and approved byGavin Ward, Ascent's Exploration Manager (member of the Association of AmericanPetroleum Geologists) who has 19 years relevant experience in the oil and gasindustry. * * ENDS * * For further information visit www.ascentresources.co.uk or contact: Jeremy Eng Ascent Resources plc Tel: 020 7251 4905Hugo de Salis St Brides Media & Finance Ltd Tel: 020 7242 4477Max Hartley Cenkos Securities plc Tel: 020 7397 8925 Notes Ascent Resources plc has a portfolio of 20 hydrocarbon exploration anddevelopment projects across six countries in Europe: Italy, Switzerland,Hungary, Spain, Slovenia and Netherlands. With the stable European gas market,Ascent's portfolio favours gas over oil. With the exception of the Netherlands,all of its projects are located onshore where operating and development costsare substantially lower than they are offshore. This information is provided by RNS The company news service from the London Stock Exchange