Ascent Resources (LON:AST) said today a sidetrack well on its Penészlek Project in Hungary flowed much better than expected and could extend the gas field’s life by at least two years.

The East European–focused gas group said the results exceeded management's expectations and were even better than the original PEN - 105 well, from which the sidetrack was drilled.

The original PEN-105 well began production in 2010 and has recovered 0.85 Bcf (24 Mm3) of gas from the smaller southern part of the structure.

The sidetrack well, PEN-105A, was designed to drain gas reserves from the northern half of the structure. It hit approximately 20m of gas bearing formations in the targeted Miocene volcanicastic reservoirs.

Preliminary testing of a 7m perforated section of PEN-105A produced gas at a rate of 0.928 MMscfd (26,300 m3/d; 154 boepd) and it will now be reconnected to the production facilities.  

Over the coming weeks, Ascent intends to add additional perforation and to stimulate the sidtrack well with an acid wash, which doubled production at the original well.

Ascent has a 48.3 per cent in Penészlek, which is in the eastern part of the country, but its main focus is now the Petišovci project in Slovenia where the estimated GIP (gas in place) resource is 504 billion cubic feet.

Jeremy Eng, Ascent’s managing director, said: "This PEN-105A performance is a good result and can be expected to prolong the production from the Penészlek field for at least a couple of years.

Gas prices in Hungary are strong and this production will provide very useful revenue to the group pending the start-up of joint venture production from the Petišovci project in Slovenia."

Ascent Resources (LON:AST) today announced that sidetrack drilling is now underway on the PEN-105 well on the Penészlek gas field in Hungary.

The sidetrack well is 430 metres north-east of the original vertical well and it is designed to recover gas reserves isolated by a fault in the northern part of the structure, Ascent said.

The AIM quoted firm has a 48.78 per cent stake in the asset. 

"Over the years, production at Penészlek has generated revenues that have helped to cover our corporate overheads while we have advanced our flagship Petišovci Gas Project in Slovenia towards production," said managing director Jeremy Eng.

“The PEN-105 sidetrack is designed to extend the life of this largely depleting field.  As Penészlek declines in line with expectations, the loss of output will be more than replaced when Petišovci, with its 504 billion cubic feet P50 gas-in-place, comes on stream as we expect later this year.   

“This is an exciting time for the company and I look forward to updating the market on progress at both Penészlek and Petišovci in due course." 

Ascent says the sidetrack drilling operation will last around three weeks. After that the new sidetrack well will be brought into production.

The Petišovci project in Slovenia is Ascent’s primary focus. Last month, the company reported an upgrade to the gas-in-place estimate for the project.

The estimated GIP resource rises 22 per cent to 504 billion cubic feet from 412 billion cubic feet.

The report was provided by respected industry consultants RPS Energy. It was based on the findings of the recently drilled Pg-10, Pg-11 and Pg-11A wells.

Ascent also revealed that the Pg-10 and Pg-11A wells will be the first two producers put on stream during the development phase.

Those two wells provided proof-of-concept for the Petišovci project, it said. They were both fracture stimulated  which led to test rates of 8 and 2 million cubic feet per day respectively.

Ascent Resources (LON:AST) today reported an upgrade to the gas-in-place estimates  for the Petišovci project in Slovenia.

The estimated GIP resource rises 22 per cent to 504 billion cubic feet from 412 billion cubic feet.

The report was provided by respected industry consultants RPS Energy. It was based on the findings of the recently drilled Pg-10, Pg-11 and Pg-11A wells.

"The gas-in-place upgrade confirms the progress we have made over the last year as we continue to move the project towards production later this year,” said managing director Jeremy Eng.

“The timing of the recompletion of the Pg-10 and Pg-11A wells will now coincide with the construction work to be carried out on the connecting pipelines. 

“In the meantime, work on the design, procurement and modifications to the existing gas processing facilities continues.”

Ascent also revealed that the Pg-10 and Pg-11A wells will be the first two producers put on stream during the development phase.

Those two wells provided proof-of-concept for the Petišovci project, it said. They were both fracture stimulated  which led to test rates of 8 and 2 million cubic feet per day respectively.

The company explains that the bulk of the new GIP resource comes from the deeper reservoirs that were proven to be productive in the Pg-11A well.

These reservoirs comprise seven separate sands, referred by letters from ‘K’ through to ‘Q’, and RPS estimated that more than 83 billion cubic feet of gas was present within them.

RPS also estimated that the ‘F’ sands, which was previously considered as part of another reservoir, contains 9 billion cubic feet of gas in place. Fracture stimulation work has been focused on the ‘F’ sands.

“Reservoir simulation for the ‘F’ sands at Pg-10 is complete and in progress for the Pg-11A sands, these results are designed to forecast future production and we will provide the market with an update in due course," Eng added.

Ascent owns a 75 per cent stake in the Petišovci project which is a joint venture with local firm Geoenergo with the remaining 25 per cent.

Preliminary testing of the shallowest of two stages of the PG-10 well flowed at a stabilised rate of 8.5 MMscfd (240,000 m3; 1,420 boepd), Ascent said.

Today’s result follows what the company described as very encouraging results from the fracture stimulation of a first well, Pg-11A, in Petisovci in October.

Options are being studied to allow the production and associated cash flow generation of the two wells by mid 2012, the oil and gas explorer added.

Managing director Jeremy Eng said, "This result from Pg-10 is excellent and exceeds our expectations.  It follows the commercial, although less prolific, result from the Pg-11A stimulation, and gives us confidence that the redevelopment of the Petisovci field can and will now proceed.” 

Ascent added that stimulation work on both the Pg-10 and Pg-11A wells is now complete, with both to be recompleted during January and February 2012 and followed by further testing to better understand the long term productivity performance of the reservoir. 

“There is a wealth of new information that now needs to be integrated into the redevelopment plan as our understanding of the field continues to improve," Eng said.

The Petisovci project is a joint venture between Slovenia group Geoenergo, which holds a 25% interest in the project, and Ascent, which holds 75% through a subsidiary.