Replacement: 412 Bcf resource

RNS Number : 3161U

Ascent Resources PLC

13 October 2010

 



The following amends the announcement released today under RNS number 2856U at 7.00am.

The P50 estimate should be of 412 Bcf (11.7 Bm³; 68.7 MMboe) and not of 412 Bcf (11.7 Mm³; 68.7 MMboe) as previously stated.

All other details remain unchanged and the full amended announcement appears below.

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

13 October 2010

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

Reports In-Place Gas Volume of 412 Bcf for Petişovci-Lovaszi Project

Highlights:

·    Independent corroboration of substantial gas-in-place resources in the project area - P50 estimate of 412 Bcf (11.7 Bm³; 68.7 MMboe)

·    Large scale gas development with good infrastructure, pipeline connectivity and a strong regional sale price - current price $9.00 per Mscf

·    Project development objective are the Miocene formations which contain multiple tight gas reservoirs at moderate depths

·    The Pg-11 evaluation well is ready to drill with commencement targeted in November 2010 - expected to be Ascent's first Slovenian production well

Ascent Resources plc, the AIM-traded oil and gas exploration and production company, has received an independent report corroborating the highly prospective nature of the Petişovci-Lovaszi project area, with P50 estimates of gas-in-place of 412 Bcf (11.7 Bm³; 68.7 MMboe).  The report from RPS Energy Group plc ('RPS'), a leading international oil and gas reserve assessor, also declared the corresponding P90 and P10 estimates are 200 Bcf and 834 Bcf with a mean of 478 Bcf. 

The Petişovci/Lovaszi Project Area covers some 200 sq km and straddles the Hungarian-Slovenian border.  The Company believes that this project, with its high levels of recoverable gas, has the potential to be the largest asset in its portfolio and believes this to be a unique project for onshore Europe, due to its scale and risk reward profile.  Importantly for development, the area is serviced by excellent infrastructure and has existing gas pipeline connections and the regional gas price is strong, with a current price of $9.00 per Mscf being achieved in Hungary.

Ascent in the last year has acquired 3-D seismic surveys that cover the entire area.  The data has been processed and interpreted and the resulting structural interpretation of the main targets is significantly different from the previous geological model.  The structures have two sets of reservoirs, the shallower Pontian and the deeper Miocene, The Miocene reservoirs are Ascent's development objective as the shallow reservoirs were extensively developed during the 1960s and are considered to be almost fully depleted. 

The RPS report considers mainly the Miocene reservoirs that contain gas in low permeability sandstones found at a moderate depth of between 2,000 m and 3,000 m. Some previous production was initiated from these tight gas reservoirs in the 1960s both in Hungary and in Slovenia however total production was less than 10 Bcf.  Tight gas is considered as the first category of unconventional resources that also includes shale gas, shale oil and coalbed methane.  These unconventional resources require enhanced productivity techniques to enable them to produce at commercially viable rates.  Horizontal or extended reach drilling and hydraulic fracture stimulation or a combination of these technologies is generally used.  Stimulation methodology has been extensively developed in the last 20 years with the results of the improvements dramatically changing the gas markets, especially in North America where production from unconventional sources has increased from 16% to 48% in the last 20 years.  Recovery factors for tight gas reserves generally exceed 50% of the gas-in-place and further work is underway by RPS to accurately forecast the recovery factors that can be expected for the Miocene reservoirs. 

The Pg-11 well is ready to drill with commencement targeted in November 2010.  This well has a number of important objectives and the evaluation programme for the well, which includes core sampling and state-of-the-art wireline logging, is designed to collect sufficient data for stimulation design, as well as calibration of the 3-D seismic to optimise the geological modelling over the entire project area.  Ascent's Board is considering the best means to maximise shareholder exposure to the substantial potential upside of the project, whilst mitigating the risks associated with undertaking the work programme on a sole risk basis.

Ascent's Managing Director Jeremy Eng said, "The RPS report underpins our prognosis of the substantial gas potential at Petisovci-Lovaszi and with a P50 gas-in-place of 412 Bcf, vindicates our decision to invest in the 3-D seismic which was funded entirely by Ascent.  The future development of this project has become the first priority for Ascent.  We now look forward to receiving the information from the Pg-11 well which, apart from facilitating the detailed planning for the development of these reserves, is also expected to become our first production well in Slovenia."

In the Petisovci Lovaszi project area, Ascent has a 50% interest in the 90.1 sq km project area in Hungary with partner MOL Hungarian Oil and Gas plc.  In Slovenia, Ascent's partners are Geoenergo with a 25% interest and Stratic Energy Corporation ('Stratic').  In 61.5 sq km of the 97 sq km concession, Ascent's interest is 75% and in the other 35.5 sq km which contains the Petisovci structure, Ascent has a 75% interest in the shallow reservoirs and a 26.25% interest in the deep reservoirs, Stratic is under currently sole risk provisions for the 3-D seismic and the Pg-11 well.

The technical information contained in this announcement has been reviewed and approved by Mr. A Kirchin, a Director of RPS Energy.

* * ENDS * *

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 projects across five countries in Europe: Italy, Switzerland, Hungary, Slovenia and Netherlands.  Ascent's 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.

Glossary

Bcf                   Billions of standard cubic feet (of gas)

Bm³                  Billions of cubic metres (of gas)

Mscf                Thousands of standard cubic feet

MMboe            Millions of barrels of oil equivalent (1 barrel of oil is equivalent to 6,000 standard cubic feet of gas

P10                  at least a 10 percent probability that the quantities actually recovered will equal or exceed the sum of the estimated proved + probable + possible resources

P50                  at least a 50 percent probability that the quantities actually recovered will equal or exceed the sum of the estimated proved + probable resources

P90                  at least a 90 percent probability that the quantities in place will equal or exceed the estimated proved resources

 

END

 

 

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