Ascent Resources (AIM: AST) said it has completed operations on the Fontana-1 well in Italy's Latina Valley and believes that the results are sufficiently encouraging to proceed with the permitting of a hydrocarbon appraisal well, Anagni-2.
Fontana-1 was drilled as a geological appraisal well to collect cores from a carbonate platform identified while drilling the nearby Anagni-1 well. At Fontana-1, a core sample taken from the limestone of the target Carbonate Platform formations contained live oil. Furthermore, Ascent noted that the target formations have been found over 300m shallower than in the original Anagni-1 well.
“Importantly, the Fontana-1 well has confirmed the presence of a second thrust formation within the complex geology of this region”, Ascent stated.
The Anagni-2 well, located within 1km of Fontana-1, will now target a smaller adjacent structure. At the Anagni-2 location, Ascent expects that the target will be even shallower, at an estimated depth of approximately 300m below ground level.
The Fontana well and the Agnoti well are located on the Frosinone exploration permit in the Latina Valley of Italy. Ascent operates the Frosinone oil exploration permit with a working interest of 70%.
The company also updated investors on the on-going work in eastern Hungary, on the Penészlek project. This morning Ascent has confirmed that the drilling rig is currently returning to PEN-101 to ready the well to complete remedial work required to ready it for production.
The rig had previously been drilling the PEN-106 well, which after a drill stem test, has now been plugged and abandoned. The test showed the target Miocene tuffaceous formations to be water bearing at the well location.
At PEN-101, the company will drill a short sidetrack to bypass damaged cementation. Prior to the short-term disruption at PEN-101 Ascent achieved initial production rates, during preliminary testing, in excess of 1MMscfd (million standard cubic feet per day). Previously, Ascent said this initial production rate is expected to be increased through similar stimulation as used with the currently producing PEN-105 well.
PEN-105 was completed and shut-in in December whilst the company connected it to the main export pipeline, and production subsequently began last month.
In a note to investors, London-based stockbroker Astaire Securities described the operational update as ‘mixed’ whilst highlighting the positive news from Fontana-1. Although the broker said the PEN-101 update was ‘less encouraging’, Astaire also stated that is was very comfortable with its current risked NAV (Net Asset Value) estimate.
In Hungary, Ascent Resources is undertaking the exploration and production work through its subsidiary PetroHungaria kft. The Penészlek area is being developed through a partnership between four companies, of which Ascent is the largest stakeholder with 48.776%. DuelEx is the second largest with 40.44%, Geomega kft owns 8.627% and Swede Resources has 2.157%.