www.ascentresources.co.uk
Ascent Resources plc is an independent, multi-project, European focussed oil and gas exploration and production company. Its portfolio is balanced providing access to low-risk development and revenue generating production projects, alongside exploration projects with the potential for higher returns. An experienced management team, implementing a defined development programme on primarily onshore projects, provides Ascent with a solid platform to grow and generate value for stakeholders. Licences are held in Hungary, Slovenia, Italy, Switzerland and The Netherlands.
Ascent Resources mulls options over Petisovci development
Oil and gas explorer Ascent Resources (LON:AST) is to look at debt rather than equity to finance the development of the first two wells on its Petisovci project in Slovenia.
Finance director Scott Richardson Brown told a conference call that while it could never rule out equity, issuing new shares at the current price was a “sub-optimal” option to fund the development of the Pg-10 and Pg-11A wells.
Ascent is mulling two options to get the two wells into production. One would see it either buy or rent a CO2 scrubber to clean up the gas, which would then be sold into the Slovenia gas network.
The other option would generate half the price it would receive if it were to sell the gas directly into the network but revenues could start by the beginning of the second quarter, which Ascent said it could use on its other developments.
Richardson Brown added if it were to go for a CO2 scrubber, it will probably look for debt or mezzanine finance to avoid heavy dilution through equity.
Buying a CO2 scrubber would cost €5 million and revenues would not start to be generated until the middle of 2012 at the earliest.
Shares in the group have more than doubled to 3.75p since Friday when it revealed preliminary testing of the shallowest of two stages of the Pg-10 well flowed gas at a stabilised rate of 8.5 MMscfd (240,000 m3; 1,420 boepd) or more than twice the rate expected.
Fracture stimulation of Pg-11A earlier in the month showed stabilised gas flow rate of 2.1 MMscfd, a level of output that Richardson Brown said could generate revenues of €1 million every three months and ebitda of €3 million in the first year assuming a gas price of €7 per Mcf.
Richardson Brown added the Petisovci field represented a vast opportunity for the firm, but as the cost of drilling and frac testing each well is €6 million it would have to consider the options over how best to develop the prospect.
This could involve either an asset sale, a farm-out, reserves-based lending or developing it through organic growth and self-finance.
