Drilling & Financing

RNS Number : 4713W

Ascent Resources PLC

19 November 2010

 



Ascent Resources plc / Epic: AST / Index: AIM / Sector: Oil and Gas

19 November 2010

Ascent Resources plc ('Ascent' or 'the Company')

Secures Financing and to Commence Drilling of Petişovci-Lovaszi Project

Ascent Resources plc, the AIM-traded oil and gas exploration and production company, has secured a one year loan facility of £2.1 million and has entered into a £7 million Standby Equity Distribution Agreement ('SEDA') with YA Global Master SPV Ltd ('Yorkville'), an investment fund managed by Yorkville Advisors LLC.  The loan facility will be drawn to contribute to the financing of the Pg-11 evaluation well on the Petişovci-Lovaszi project area in which the Company recently announced an independently verified P50 estimate of gas-in-place of 412 Bcf (11.7 Bm3; 68.7 MMboe). 

The Pg-11 drilling location is now complete.  Crosco is planning to mobilise its CR-1 drilling unit to the location next week and drilling will commence as soon as the rig is ready.  This well has a number of important objectives and the evaluation programme, which includes core sampling and state-of-the-art wireline logging, is designed to collect sufficient data for development planning, as well as calibration of the 3-D seismic to optimise the geological modelling over the entire project area.  

The one year loan facility can be drawn down following completion of certain conditions precedent, including (inter alia) provision of security over Ascent's interest in its Hungarian subsidiary.  The loan carries an interest rate of 6% per cent. per annum, payment of which will be covered from cashflow from Ascent's existing production.  During the term of the facility, Yorkville has the right to convert the outstanding loan balance into shares in Ascent at prices ranging from 8.4p-10.5p. The loan will be secured by a charge over Ascent's assets.

The £7 million SEDA facility can be used entirely at the discretion of the Company.  Under the terms of the agreement, Ascent may draw down on funds over a period of up to three years in exchange for the issue of new shares in the Company.  The shares issued by the Company will be at a 5% discount to the prevailing market price during the ten day pricing period of a draw down.  The Company may also set a minimum price for each draw down.  The maximum advance that may be requested is 200% of the average daily trading volume of Ascent shares multiplied by the volume weighted average price of such shares for each of the ten trading days prior to the draw down request.

Ascent's Managing Director Jeremy Eng said, "Pg-11 in Slovenia is an important well and whilst the main effort is in the evaluation of the Miocene gas reservoirs, we expect that it will be completed as a producing well and then brought into production as soon as possible.  Yorkville has provided similar funding arrangements to Gulf Keystone Petroleum, Xcite Energy and San Leon Energy amongst others, and this facility has allowed us to minimise dilution whilst funding our near term work programme."

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For further information visit www.ascentresources.co.uk or contact:

Jeremy Eng	Ascent  Resources plc	Tel: [phone]
Simon Cunningham	Ascent  Resources plc	Tel: [phone]
Sarah Wharry	finnCap Ltd	Tel: [phone]
Henrik Persson	finnCap Ltd	Tel: [phone]
Hugo de Salis	St Brides Media & Finance Ltd	Tel: [phone]

Notes

Ascent Resources plc has a diversified portfolio of hydrocarbon exploration and development interests across five countries in Europe: Italy, Switzerland, Hungary, Slovenia and Netherlands.  Its portfolio contains a solid base of field redevelopment projects with selected exposure to exploration upside.  The portfolio is focussed 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.

 

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