Interim Results

RNS Number : 7389Y

Ascent Resources PLC

09 September 2009

 



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

9th September 2009

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

Interim Results

Ascent Resources plc ('Ascent', 'the Company' or 'the Group'), the AIM traded oil and gas exploration and production company announces its unaudited interim results for the six months ended 30 June 2009.

Highlights

• Significant progress in the development of the portfolio in Hungary, Slovenia and Italy 

• Production continues in the Nyírség permits Hungary 

• Gas discoveries at the Gorbehaza-1('GH-1') and Penészlek-105 ('PEN-105) wells are to be tested and completed as future production wells

• Joint operation agreement with MOL in the highly prospective Lovaszi area adjacent to Ascent's Slovenian Petisovci project. 3-D seismic acquisition on the Slovenian side of the project has commenced

• Active drilling and seismic programme currently underway to prove up the value of the Ascent portfolio

Strategy and Current Operations Review

This has been an eventful period for the Company as Ascent has continued to pursue its strategy of participating in low cost onshore oil and gas assets with high upside potential across mainland Europe.  Ascent has maintained its focus on the development of reserves over production and it has been active in exploration and development programmes in order to prove up the value of its portfolio.

Ascent currently holds interests in some 20 development, appraisal and exploration projects in five countries across Europe: Hungary, Italy, Slovenia, Switzerland and the Netherlands.  Participation in such a diverse range of projects demands a plurality of funding methods and as such we have centred our business model on the acquisition of debt/equity funding for development projects and, in order to minimise the Company's exposure to risk, farm-outs for exploration projects.  

Additional funds have been accessed during the period by utilising the equity line of credit established by agreement with the GEM Global Yield Fund ('GEM').  This agreement provides Ascent with capital of up to £5 million to assist in funding the Company's exploration projects not covered by production revenue.  Ascent has issued 55m shares to GEM in two separate issues of equity since the agreement was announced in May, raising a total of £2.6m in equity funding.  

Ascent's strategy has been illustrated in practice throughout the period, with the Company seeking to achieve a balance between low risk and high returns by trading equity stakes in projects such as the Gazzata-1 well in Italy and the Hungarian Nyírség panhandle in return for reducing the costs of drilling and seismic.  In May of this year the Company, through its wholly owned subsidiary Nemmoco Slovenia Corporation ('NSC'), farmed out one half of its 80% participation in the Eastern Slovenian Exploration Project to Aspect Energy International ('AEI').  Under the farm-out agreement NSC and AEI will share the costs of acquiring a 3D seismic survey as well as appraisal and exploration drilling.  However, AEI will pay the first €1m of costs and a disproportional payment mechanism will apply until a cumulative €3m has been spent.  The Company has worked alongside AEI successfully in the Gorbehaza discovery in neighbouring Hungary and the Board of Directors looks forward to continuing this success in Slovenia.  

Ascent continues to actively seek partners to undertake joint operations in high potential projects.  In July, the Company announced an agreement with MOL RT ('MOL'), Hungary's leading oil and gas company, to conduct joint operations in an area covering 88 sq kms in south western Hungary, including the Lovaszi and Ujifalu oil and gas fields.  The area is adjacent to the Company's Petisovci redevelopment area and the finalisation of this agreement creates a combined project of potentially significant size.  Under the terms of this agreement, Ascent will be assigned a 50% interest for joint exploration and production in the area and will acquire 3-D seismic data over the area and fund the drilling of two exploration wells, recovering MOL's share of the drilling costs from 80% of any resultant production revenues.  Most recently, the Company announced that it had entered into an agreement with Schuepbach Energy, a Texas based exploration company, to investigate the possibility of shale gas production at its Canton of Vaud project in Switzerland.

The Company is currently active with a number of drilling projects underway or due to begin in the near future.  Drilling of the PEN-105 well in the Penészlek area of the Nyírség permits in Hungary was completed at the end of August having reached and logged its primary target.  The preparations required for production testing and completion at the well are now in progress, and further updates are expected in the coming weeks.  The Company, in conjunction with its partners, expect to drill at Penészlek a further three development wells: PEN-104AA, PEN-101 and PEN-106. Additionally, it continues to carry out evaluations on a number of other potential locations in this highly prospective region.  

Ascent is currently awaiting the commencement of production testing at the GH-1 well in the Panhandle region of the Nyírség Permit in northeast Hungary.  Drilling was completed on 28 August 2009 and drilling logs indicate that gas was encountered in two of the three target zones.  It is anticipated that testing will commence this month and the well will be completed as a future gas producer.  

Later this month Ascent expects to commence drilling a geological appraisal well called Fontana-1 which targets the shallow part of the Anagni structure in the Frosinone Exploration Permit in Italy's Latina Valley.  The civil works required to prepare the site for drilling are due to commence shortly.  The Anagni-1 well, drilled in 2008, confirmed the presence of good reservoir characteristics and recovered small quantities of 'live' oil.  The geological appraisal well, Fontana-1, using the interpretation of last year's seismic data, is expected to find the reservoir interval over 400m shallower than at the Anagni-1 location.

Permitting for the acquisition of 3D data over an area of 90 sq km at the previously producing Petisovci oilfield in Slovenia has been completed and the survey is currently underway. In July 2009 Ascent Hungary Limited announced plans to conduct a follow up acquisition in the neighbouring Lovaszi area in Hungary. The existing infrastructure at the site makes the area ideal for rapid redevelopment and estimates of up to 300bcf of tight gas reserves in addition to a number of shallow oil targets make Petisovci a potentially significant project for the Company.

Permitting has advanced well to allow the Company to conduct an acquisition of 3D data over 200 sq km from the Filovci development area in eastern Slovenia in Q4 2009. Previous wells at the site have produced both oil and gas.

The Company continues to assess a number of potential transactions through its previously announced asset management joint venture agreement with San Severina Holdings ('San Severina').  The agreement allows for the acquisition of minority interests to be managed by Ascent and provides the potential for investment funding for producing and development or appraisal stage oil and gas projects worldwide.  This will give Ascent shareholders the opportunity to benefit from participation in projects that are beyond the remit of the Company's stated core strategy of focusing on European based ventures.  

Additionally, Ascent maintains its 22.5% interest in Italian drilling contractor Perazzoli Drilling srl. Perazzoli currently owns three rigs: a 40 tonne Ballerini, 100 tonne Corsair 300 and 200 tonne Drillmec HH200 low environmental impact hydraulic rig.  Ascent's stake in Perazzoli enables it to secure preferential access to rigs in the European market.

Financial Review 

Results for the period

The results for the period reflect continued development of the Group's exploration assets, principally in Hungary, Italy and Slovenia.  As set out in the Operations Review there has been a wide range of testing, geological and geophysical activity in the period.  Given the capital spend in the period and the timing of revenue, the loss of £720,809 for the period was as expected.

Liquidity and Capital Resources

The Company continues to be an emerging business with limited production cash flows; consequently, it has to manage its working capital and liquidity position by balancing the timing of critical expenditure with income from joint venture arrangements and, where appropriate, profits from strategic divestments.  Further information on future funding arrangements and the Directors' assessment of the Group's going concern position is set out in note 1 of these Interim Financial Statements.

Principal Risks and Uncertainties

The principal risks and uncertainties affecting the business activities of the Group remain those detailed on page 18 of the Annual Review 2008, a copy of which is available on the Company's website at www.ascentresources.co.uk. 

The interim financial information to 30 June 2009 and 30 June 2008 is unaudited and does not constitute statutory financial information.  The information given for the year ended 31 December 2008 does not constitute statutory accounts within the meaning of Section 19 of the Companies (Amendment) Act 1986.  The statutory accounts for the year ended 31 December 2008 have been filed with the Registrar and are available on the Company's web site www.ascentresources.co.uk.

On behalf of the Board of Directors

Jeremy Eng

Managing Director

8 September 2009

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 

For the six months ended 30 JUNE 2009

	Notes	Six months ended  30 June 2009	Six months ended 30 June 2008	Year ended 31 December 2008
		Unaudited	Unaudited	Audited
Continuing operations		£'000	£'000	£'000
Revenue		504	-	1,475
Cost of sales		(575)	(2,304)	(4,328)
Gross loss		(71)	(2,304)	(2,853)
Other operating income		-	-	-
Administrative expenses		(686)	(832)	(1,372)
Results from operating activities		(757)	(3,136)	(4,225)
Finance income		22	59	160
Finance expense		(210)	(157)	(374)
Net finance costs		(188)	(98)	(214)
Share of profit of equity accounted investees (net of income tax)		260	-	88
Loss before tax		(685)	(3,234)	(4,351)
Taxation		-	-	-
Loss for the financial period		(685)	(3,234)	(4,351)
Other comprehensive income
Foreign currency translation differences		(80)	(179)	(100)
Net change in fair value of available-for-sale financial assets		52	220	(355)
Profit on sale of investments		127	424	1,985
Other comprehensive income for the period		99	465	1,530
Total comprehensive (loss) for the period		(586)	(2,769)	(2,821)
(Loss)/Profit attributable to:
Equity holders of the Company		(819)	(3,234)	(4,395)
Non-controlling interest		134	-	44
Loss for the period		(685)	(3,234)	(4,351)
Total comprehensive (loss)/ income attributable to:
Equity holders of the Company		(720)	(2,769)	(2,861)
Non-controlling interest		134	-	40
		(586)	(2,769)	(2,821)
Loss per share
Basic and fully diluted loss per share	3	(0.23)p	(0.91)p	(0.94)p

CONDENSED BALANCE SHEET 

for the six months ended 30 JUNE 2009

	Notes	Six months ended  30 June 2009	Six months ended 30 June 2008	Six months ended 31 December 2008
		Unaudited	Unaudited	Audited
		£'000	£'000	£'000
Assets
Non-current assets
Property, Plant and Equipment		333	288	266
Exploration assets including decommissioning costs	4	11,941	10,552	13,146
Investments in equity-accounted investees		1,423	990	1,300
Total non-current assets		13,697	11,830	14,712
Current assets
Inventories		325	714	609
Trading investments		80	720	145
Trade and other receivables		2,820	5,953	3,582
Cash and cash equivalents		511	1,042	1,236
Total current assets		3,736	8,429	5,572
Total assets		17,433	20,259	20,284
Equity
Attributable to equity holders of the parent
Share capital	5	322	304	305
Equity reserve	6	84	84	84
Share premium account	6	14,271	13,067	13,067
Share based payment reserve	6	1,085	1,244	1,042
Translation reserves	6	2,130	1,427	3,928
Retained earnings	6	(8,536)	(7,725)	(7,816)
Total equity attributable to shareholders of the Company		9,356	8,401	10,610
Minority interest		174	-	40
Total equity		9,530	8,401	10,650
Non-current liabilities
Borrowings	7	4,033	4,220	4,525
Provisions		29	324	32
		4,062	4,544	4,557
Current liabilities
Trade and other payables		3,324	5,830	4,515
Borrowings	7	517	1,484	562
		3,841	7,314	5,077
Total liabilities		7,903	11,858	9,634
Total equity and liabilities		17,433	20,259	20,284

CONDENSED CASH FLOW STATEMENT 

for the six months ended 30 JUNE 2009

	Notes	Six months ended 30 June 2009	Six months ended 30 June 2008	Year ended 31 December 2008
		Unaudited	Unaudited	Audited
		£'000	£'000	£'000
Cash used in operations
Loss before tax		(721)	(2,769)	(2,860)
Depreciation charge		61	7	560
Increase in receivables		762	(2,812)	(369)
(Decrease)/increase in payables		(1,192)	3,698	103
Profit on sale of intangible fixed assets		-	424	-
Profit on sale of subsidiary		-	-	(1,363)
Profit on sale of current asset investments		-	-	(621)
Revaluation of quoted securities		(179)	(220)	454
Impairment of exploration expenditure		-	2,005	3,240
Amortisation of decommissioning costs		-	53	336
(Increase)/decrease in decommissioning provision		(3)	-	(214)
Share based payment charge		43	52	(149)
Exchange differences		416	492	611
Share of profit of associate undertakings		(260)	-	(88)
Cash used in operations		(1,073)	930	(360)
Financial income		(22)	(59)	(160)
Financial expense		210	156	374
Net cash used in operating activities		(885)	1,027	(146)
Cash flows from investing activities
Finance income		22	59	160
Payments for investing in exploration		(879)	(2,418)	(4,602)
Increase in payables		-	-	2,282
Acquisition of property, plant and equipment		(80)	(282)	(813)
Proceeds from disposal of subsidiary		-	-	1,582
Proceeds from disposal of current asset investment		245	-	659
Acquisition of subsidiaries		-	-	(20)
Net cash received from a minority shareholder of a subsidiary undertaking		133	-	40
Net cash flows used in investing activities		(559)	(2,641)	(712)

		Six months ended 30 June 2009	Six months ended 30 June 2008	Year ended 31 December 2008
Cash flows from Financing activities
Finance expense		(210)	(155)	(374)
Proceeds from loans		-	1,937	2,104
Loans repaid		(423)	(296)	(1,070)
Proceeds from issue of shares		1,221	-	-
Net cash flows from financing activities		588	1,486	660
Net (decrease)/increase in cash and cash equivalents for the year		(856)	(128)	(198)
Net foreign exchange differences		131	(154)	110
Cash and cash equivalents at beginning of year		1,236	1,324	1,324
Cash and cash equivalents at end of period		511	1,042	1,236

Notes to the Interim Financial Statements

• Accounting policies for the six months ended 30 June 2009

Reporting entity

Ascent Resources plc ('the Company') is a company domiciled in England. The address of the Company's registered office is One America Square, Crosswall, London EC3N 2SG.  The consolidated interim financial statements of the Company as at 30 June 2009 comprise the Company and its subsidiaries (together referred to as the 'Group') and the Group's interest in associates.

Basis of preparation

The unaudited interim set of financial statements included in this half-yearly report has been prepared in accordance with the recognition and measurement requirements of IFRSs as adopted by the EU. The interim set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 December 2008 that are available upon request form the Company's registered office or from the website at www.ascentresources.co.uk.  They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2008.

The prior year comparatives are derived from audited financial information for Ascent Resources plc as set in the annual report for the year ended 31 December 2008 and the unaudited information in the interim financial statements for the period ended 30 June 2008. The comparative figures for the year ended 31 December 2008 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The auditors' report on these accounts was not qualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985.  The auditors' report included a reference in respect of the existence of a material uncertainty which may cast significant doubt on the Company's and the Group's ability to continue as a going concern.  The auditors drew attention to this matter by way of emphasis without qualifying their report.

The following standards, amendments and interpretations to published standards were mandatory for the financial year beginning 1 January 2009.

IAS 1 (revised), 'Presentation of financial statements'.  The revised standard prohibits the presentation of items of income and expenses (that is 'non-owner changes in equity') in the statement of changes in equity, requiring 'non-owner changes in equity' to be presented separately from owner changes in equity.  All 'non-owner changes in equity' are required to be shown in a performance statement.  The interim financial statements have been prepared under the revised disclosure requirements.

IFRS 8, 'Operating segments'. IFRS 8 replaces IAS 14, 'Segment reporting'. It requires a 'management approach' under which segment information is presented on the same basis as that used for internal reporting purposes.  This has not resulted in a change in the number of reportable segments presented.  Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.

The following new standards, amendments to standards and interpretations are mandatory for the first time for the financial year beginning 1 January 2009, but are not currently relevant for the Group.

• IAS 23 (amendment)
• IFRIC 13, 'Customer loyalty programmes'
• IFRIC 14, 'The limit on a defined benefit asset, minimum funding requirements and their interaction'
• IFRIC 15, 'Agreements for the construction of real estate'
• IFRIC 16, 'Hedges of a net investment in a foreign operation'
• IAS 39 (amendment), 'Financial instruments: Recognition and measurement'

         The following new standards, amendments to standards and interpretations have been issued, but are not
         effective for the financial year beginning 1 January 2009 and have not been adopted early.

• IFRS 3 (revised), 'Business combinations' and consequential amendments to IAS 27, 'Consolidated and separate financial statements', IAS 28, 'Investments in associates' and IAS 31, 'Interests in joint ventures'
• IFRIC 17, 'Distributions of non-cash assets to owners'
• IFRIC 18, 'Transfers of assets from customers'

Going concern

The financial statements of the Group and Company are prepared on a going concern basis. 

In common with many similar companies, the Group and Company raise finance for their exploration and appraisal activities in discrete tranches.  Ultimately, the Group and Company must either raise additional tranches of funding and/or generate sufficient net cash flows from operations.

The Directors are of the opinion that the Group and Company will have sufficient cash to fund its activities based on current assumptions and forecast cash flow information for a period in excess of twelve months from the date of these financial statements.  Management continues to monitor all working capital commitments and balances on a weekly basis and believe that they have secured appropriate levels of financing for the Group and Company to continue to meet their liabilities as they fall due for at least the next twelve months.

In preparing base and sensitised cash flow forecasts the Directors have identified a number of cash receipts and cash payments where they have had to use their best judgement to make certain estimates. 

The most significant of these judgements and estimates relates to the ability of the Company to raise funds, when needed, under the terms of the £5m Equity Credit Facility signed 13 May 2009.  The facility allows the Company, at its sole discretion (but subject to certain conditions), to issue capital for payment in accordance with the terms of the agreement.  To date the Company has issued shares and received £2.6m under this Facility. The number of shares that can be issued and their issue price (and therefore the total amount of funding receivable) is determined based on a formula utilising the price and trading volumes of the Company's shares in the period leading up to the issue of the requested capital draw down. In this respect there is uncertainty as to the amount of additional funding that the Company can draw down. 

For the purposes of assessing going concern the Directors have considered long term historic trading volumes and a share price significantly less than that applicable at the date of approving the accounts as this basis of assumptions for the usage of the facility. However, a significant reduction in trading volumes or a significant fall in share price below the discounted price assumed in the forecast could adversely affect the timing or availability of additional funding under this facility.

Whilst the Directors consider the assumptions to be suitably prudent and that it is unlikely that movement in volumes or share price will adversely affect the timing or availability of additional funding, there can be no certainty in this matter.  If the Company is unable to draw down funds under this facility in the amounts and at the times forecast it will be necessary to raise additional funds and / or achieve asset disposals, and therefore the Group and Company may not be able to meet its liabilities as they fall due.

The base forecasts are based upon estimates of planned production from existing producing fields, future gas prices and estimates of costs for planned exploration activities.  Additionally the Company is in discussions with a number of third parties regarding farming in to the Company's Slovenian acreage; it is assumed that funding will be secured to contribute to the cost of the initial seismic acquisition.  On a number of projects certain assumptions have also been made with regard to working capital management and matching cash inflows from cash calls to cash outflows. 

Accordingly, the Directors have also prepared sensitised forecasts to reflect the risk that production volumes and gas prices may be lower than estimated and exploration costs may be higher. These forecasts indicate that the Group and Company can continue to operate within existing facilities (including the Equity Credit Facility) for the foreseeable future, though, in the absence of asset divestments, additional farm-in agreements and exploration success, the headroom is limited. If the amount or timing of forecast inflows and outflows were to change adversely the Group and Company may be required to reconsider discretionary exploration activity and/or seek additional bridging finance to meet any shortfall. 

These matters indicate the existence of a material uncertainty which may cast significant doubt on the Group's and Company's ability to continue as a going concern. However, at the date of approving these financial statements the Group's and Company's cash position is positive, the Company has in place facilities to raise additional funds and it is trading as a going concern.

Estimates and Judgements

The preparation of the condensed financial statements requires Management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. 

The application of the Group's accounting policies may require Management to make judgements, apart from those involving estimates, which can have a significant effect on the amounts recognised in the financial statements.

Management judgement is particularly required when assessing the substance of transactions that have a complicated structure or legal form.

A key area where management judgement will need to be applied will be in the area of:

Oil and gas assets - exploration and evaluation costs are initially classified and held as intangible fixed assets rather than being expensed. The carrying value of intangible exploration and evaluation assets are then determined. Management reviews these assets for impairment at least annually based on an estimation of the recoverability of the cost pool from future revenues of the related oil and gas reserves (see Note 4). The carrying of value of the Anagni site in Italy is £7.7m at 30 June 2009. The Anagni II geological appraisal well is scheduled for drilling in late September 2009. If hydrocarbons are not discovered then the decision may be taken to abandon the area. If that occurs and the assets were to be fully impaired the impact of this on the Group financial statements would be significant.

Additional significant judgements made by management in applying the Group's accounting policies and the key sources of uncertainty in estimation were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2008.

2. Segmental reporting 

The chief operating decision-maker has been identified as the Board of Directors. The Board reviews the Group's internal reporting in order to assess performance and allocate resources. The Board has determined the operating segments based on these reports.

After review of the segments identified by the previous standard, IAS 14 Segment Reporting, the Board believe that the current segments still apply under IFRS 8. The Group is organised around geographic segments on a country basis.  

The Group uses operating profit for internal performance analysis and therefore the Group's measure of segment profit is operating profit.

Segment results

	Group	Italy	Hungary	Other locations	Unallocated Corporate	Total
		£'000	£'000	£'000	£'000	£'000
	Period ending 30 June 2009
	Revenues	-	504	-	-	504
	Impairment of assets		-	-	-	-
	Operating expenditure	(25)	(317)	(218)	(14)	(574)
	Administration expenses	(154)	-	(32)	(500)	(686)
	Operating profit/(loss)	(179)	187	(250)	(514)	(757)
	Year ending 31 December 2008
	Revenues	-	1,475	-	-	1,475
	Impairment of assets	(1,574)	(1,666)	-	-	(3,240)
	Operating expenditure	(257)	(748)	(69)	(14)	(1,088)
	Administration expenses	(301)	(115)	(6)	(950)	(1,372)
	Operating profit/(loss)	(2,132)	(1,054)	(75)	(964)	(4,225)
	Period ending 30 June 2008
	Revenues	-	-----	-	-	-
	Impairment of assets	(1,327)	(678)	-	-	(2,005)
	Operating expenditure	(179)	(34)	(53)	(34)	(300)
	Administration expenses	(119)	(31)	(77)	(605)	(832)
	Operating profit/(loss)	(1,625)	(743)	(130)	(639)	(3,137)

3.    Loss per share

		Six months ended 30 June 2009	Six months ended 30 June 2008	12 months ended 31 December 2008
		Unaudited	Unaudited	Audited
		£'000	£'000	£'000
	Losses attributable to equity holders of the Company	720	2,768	2,860
	Weighted average number of ordinary shares for the purposes of basic earnings per share	305,827,895	304,782,042	304,782,042
	Basic earnings/(loss) per share	(0.23)p	(0.94)p	(0.94)p
	Weighted average number of ordinary shares for the purposes of diluted earnings per share	305,827,895	304,782,042	312,970,277
	Diluted earnings/(loss) per share	(0.23)p	(0.94)p	(0.91)p
	The calculation of diluted earnings/(loss) per share assumes conversion of all potentially dilutive ordinary shares, all of which arise from share options. A calculation is performed to determine the number of shares that could have been acquired at fair value, based upon the monetary value of the subscription rights attached to outstanding share options.

4.    Exploration costs

	Group		Italy	Hungary	Other locations	Total
			£'000	£'000	£'000	£'000
	Cost
	At 1 July 2008		9,436	2,998	1,770	14,204
	Additions		1,642	283	72	1,997
	Disposals		-	-	(1,028)	(1,028)
	Additions to decommissioning asset		54	32	-	86
	Net exchange differences		1,337	360	154	1,851
	At 1 January 2009		12,469	3,674	967	17,110
	Additions		109	371	508	988
	Net exchange differences		(1,845)	(616)	(123)	(2,366)
	At 30 June 2009		10,733	3,429	1,352	15,514
	Impairment and amortisation
	At 1 July 2008		1,380	1,245	1,028	3,653
	Charge for the period		248	809	-	1,057
	Disposals		-	-	(1,028)	(1,028)
	Decommissioning charge for the year		261	22	-	283
	At 1 January 2009		1,889	2,076	-	3,965
	Charge for the period		-	15	-	15
	Net exchange differences		(242)	(165)	-	(407)
	Impairment		-	-	-	-
	At 30 June 2009		1,647	1,926	-	3,573
	Net book value
	At 30 June 2009		9,086	1,503	1,352	11,941
	At 31 December 2008		10,851	1,598	967	13,146
	At 1 July 2008		8,056	1,754	742	10,552
	'Other locations' include: the Netherlands, Slovenia, Spain and Switzerland.

5.    Called up share capital

		30 June 2009	30 June 2008	31 December 2008
		Unaudited	Unaudited	Audited
		£'000	£'000	£'000
	Authorised
	10,000,000,000 ordinary shares of 0.10p each	10,000	10,000	10,000
	Allotted, called up and fully paid
	Ordinary shares of 0.10p each
	322,132,042 at 30 June 2009	322,132,042	-	-
	304,782,042 at 30 June 2008	-	304,782,042	-
	304,782,042 at 31 December 2008	-	-	304,782,042
	Movements in called up share capital	Number of shares
	As at 1 July 2008	304,782,042
	Movement in period	-
	At 31 December 2008	304,782,042
	Shares issued on part of a draw down on the line of equity provided by GEM Global Yield Fund Limited	17,350,000
	At 30 June 2009	322,132,042

6.    Reconciliation of movements in Group equity

	Share capital	Equity reserve	Share premium	Share based payment  reserve	Translation   reserve	Retained earnings	Total parent equity	Minority interest	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 July 2008	304	84	13,067	1,244	1,427	(7,725)	8,401	-	8,401
Profit/Loss for the period	-	-	-	-	-	(91)	(91)	40	51
Assets available for sale	-	-	-	-	-			-
Issue of shares during the period	-	-	-	-	-	-	-	-	-
Share issue costs	-	-	-	-	-	-	-	-	-
Issue of convertible loan notes	-	-	-	-	-	-	-	-	-
Exchange differences on translation of foreign operations	-	-	-	-	2,501	-	2,501	-	2,501
Share based payment	-		-	(202)	-	-	(202)	-	(202)
Balance at 1 January 2009	304	84	13,067	1,042	3,928	(7,816)	10,610	40	10,650
Loss for the period	-	-	-	-	-	(720)	(720)	134	(586)
Issue of shares during the period	17	-	1,204	-	-	-	1,221	-	1,221
Exchange differences on translation of foreign operations	-	-	-	-	(1,798)	-	(1,798)	-	(1,798)
Share based payment	-	-	-	43	-	-	43	-	43
Balance at 30 June 2009	322	84	14,271	1,085	2,130	(8,536)	9,356	174	9,530

7.    Borrowings and bank loans

On 6 May 2008 the Company, through its Italian subsidiary Ascent Resources Italia srl, negotiated a new debt facility of €2.5m (£1.98m) for the further development of the Italian assets.  As security for the loan a cash deposit has been invested in a bank bond with a value of €1m (£791,000).  The interest is calculated by reference to the three month Euribor rate plus a margin of 1%. 

8.    Related party transactions

            (a)  Group companies

                   Transactions and inter-company balances between the Company and its subsidiaries have

                   been eliminated on consolidation.

            (b)  Directors

There have been no material related party transactions in respect of directors during the period under review.

9. Post balance sheet events

On 6 July 2009 Ascent announced its wholly-owned subsidiary Ascent Hungary Limited ('AHL'), has agreed terms with MOL RT ('MOL'), Hungary's leading oil and gas company, for joint operations in an area covering 88 square kilometres in south western Hungary, which includes both the Lovászi and Ujfalu oil and gas fields.

Under the terms of the agreement, MOL will transfer to AHL a 50% interest for joint exploration and production in 88 square kilometres of licences in Hungary, but will retain an option to increase its interest to 60%.  AHL will acquire 3-D seismic data over this area and will fund the drilling of two wells.  It will recover MOL's share of the cost of these wells from 80% of any resultant production revenues.  Ascent will also acquire 3-D seismic data over an additional 90 square kilometres in the adjoining part of Slovenia that includes the Petisovci redevelopment project.  

On 29 July 2009 Ascent announced it had issued 38,000,000 shares to GEM Global Yield Fund Limited ('GEM') under the terms of the Equity Credit Line facility announced on 14 May. The price of the subscription was 3.54 pence per Ordinary Share.

On 28 August 2009 Ascent announced that drilling operations at the Company's Görbeháza-1 well ('GH-1') in the Panhandle region of the Nyírség North Permit in northeast Hungary has concluded and that 7' casing has been run in advance of production testing operations.

The GH-1 well was drilled to a total depth of 1,300 metres and log data indicates that the well encountered gas in two of the three zones targeted.  The drilling rig will be moved off location and a service rig brought in to conduct the completion and testing operations.

On 2 September 2009 Ascent announced the PEN-105 well in the Penészlek area of the Nyírség permits in Hungary was being prepared for completion and testing having drilled and logged the primary gas target.  The PEN-105 well is an appraisal of the PEN-12 discovery well and the Miocene reservoir formations were present, as anticipated, some 20m shallower than at the PEN-12 location. 

On 2 September 2009 Ascent announced has signed an agreement with Schuepbach Energy LLC ('Schuepbach') of Dallas, Texas, for an option to participate in the exploration of the Jurassic shales in Ascent's exploration and appraisal project in the Canton of Vaud in Switzerland.  The option is exercisable in the event that Schuepbach drills a well to evaluate the potential for gas production from the shales.

Schuepbach have an exploration concession in the Canton of Fribourg which adjoins Ascent's exploration concession in the Canton of Vaud where Ascent hold a 90% beneficial interest with the balance held by SEAG of Switzerland.  Under the terms of the option agreement, Schuepbach will earn a 75% interest in the shales if the first well is drilled in Vaud and a 25% interest if the first well is drilled in Fribourg.  Ascent and SEAG will retain the rights to the deeper conventional reservoirs from which the Essertines well, drilled in 1962, tested over 1,000 barrels of oil.

 

END

 

 

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