CERP.L Regulatory News (CERP)

14 Apr 2008 09:52

Leni Gas & Oil PLC14 April 2008 For Immediate Release 14 April 2008 LENI GAS & OIL PLC ("Leni Gas and Oil" or the "Company") Conditional investment in gas development assets in Hungary Leni Gas & Oil plc ("LGO") today announces the conditional investment of 7.27%interest in gas development assets in Hungary from Ascent Resources plc. Highlights * Acquisition of a net 7.27% interest in the Peneszlek gas development project, eastern Hungary * Acquisition of an effective 7.27% interest in the Bajcsa gasfield redevelopment project, western Hungary through the acquisition of 14.54% interest in ZalaGasCo, which will have a 50% interest in that redevelopment project * Variation in the option to acquire a 10% interest in Ascent's Seeland Freinisburg Exploration Permit in Switzerland. Hungary Leni Gas & Oil plc has agreed terms (the "Investment Agreement") with AscentResources plc ("Ascent") to acquire a 7.27% interest in PetroHungaria kft and a14.54% interest in ZalaGasCo kft (the investments in PetroHungaria kft andZalaGasCo kft, together the "Hungarian Investments"). PetroHungaria kft ("PetroHungaria") owns a 100% interest in the Peneszlek gasdevelopment project in the Nyirseg exploration permits in eastern Hungary, whileZalaGasCo kft has agreed the terms of a joint development agreement (the "JDA")with MOL Hungarian Oil & Gas PLC ("MOL") (the multinational European focused oiland gas conglomerate) which, on execution, will give it a 50% interest in theBajcsa gasfield redevelopment project in western Hungary. The cash consideration payable by LGO for the Hungarian Investments will, on theexecution of the Operating Agreements and ancillary documents, total €2 million.€1 million has been paid to Ascent on entering the Investment Agreement, withthe remaining balance of €1 million payable on completion. The Peneszlek gas development project is centred on the development of thePEN-104 discovery that was drilled and tested by PetroHungaria in 2006. Aworkover rig has just finished completing and re-testing this well and theproduction facilities are scheduled to be delivered later this month. Thecompletion testing confirmed the productivity of the well and initial productionwill commence once the hook-up to the pipeline is completed and productionauthorisations received. In addition to the planned tie-in of the PEN-9 andPEN-12 wells, further appraisal of the area will be undertaken with theacquisition of approximately 100 sq km of 3-D seismic including the area of thepartially depleted Peneszlek field, which is a candidate for re-development. The Bajcsa gasfield redevelopment project is a 50:50 joint venture with MOL. Theproject will undertake the redevelopment of the Bajcsa gasfield with thedrilling of horizontal wells in to the proven productive gas reservoirs. Thefirst two wells are planned as re-completions of existing wells and theoperations will commence as soon as the drilling permits are issued. Work hasalready commenced to enable access to the well sites. These wells, because theywere previously on production, are already connected to the field gas processingfacilities and production can start immediately once these wells are completed. Switzerland As a further term of the Investment Agreement, Ascent and LGO have agreed tovary the arrangements for the option of up to a 40 per cent. participatinginterest in Ascent's projects in Switzerland ("Switzerland Projects") asannounced on 25 October 2007. Under the new terms Ascent has agreed to grant toLGO an option to acquire 10 per cent. of the Seeland Freinisberg ExplorationPermit exercisable by LGO at any time for 2 years, for €2 million payable at thedate of exercise. This option maybe withdrawn by Ascent at its sole discretionso long as it has not been exercised. LGO's rights and obligations in respect ofthe Switzerland Projects under the original arrangements, as previouslyannounced, are terminated. David Lenigas, Chief Executive commented: "The Hungarian development projects are a significant addition to our growingportfolio of producing and development assets. Both fields have existingdiscoveries and we expect the Bajcsa field to have apositive impact on ourproduction profile in the short-term. This new deal with Ascent also has the added advantage of allowing the Companyto retain an option over a 10 per cent. participating interest in Ascent's firstappraisal project in Switzerland but not committing the Company to an immediate€2 million of expenditure. This importantly allows us the flexibility to focuson immediate production opportunities in Spain and Trinidad." Ascent Managing Director Jeremy Eng commented: "We are pleased to welcome LeniGas & Oil as a partner in our Hungarian development projects. We aim rapidly todevelop our activities in Hungary and secure cash flow from the production andsale of gas to the local market." Enquiries:Leni Gas & Oil PLCDavid Lenigas, Executive Chairman Tel +44 (0) 20 7016 5100 Beaumont Cornish LimitedRoland Cornish Tel +44 (0) 20 7628 3396Rosalind Hill Abrahams Pelham PRCharles VivianEvgeniy Chuikov Tel + 44 (0)20 7743 667 Tel +44 (0)20 3008 5506 NOTES TO EDITORS Ascent Resources is an independent European oil and gas exploration andproduction company with assets in Hungary, Switzerland, Spain, Italy, Sloveniaand the Netherlands. (AIM:AST) MOL RT is a multinational European focussed oil & gas conglomerate with a marketcapitalisation of approximately US$16 billion and with a worldwide assetportfolio listed on Budapest Stock Exchange. This information is provided by RNS The company news service from the London Stock Exchange