Ascent Resources (LON:AST), the AIM traded oil and gas exploration and production company, has announced today, that through their subsidiary PetroHungaria kft, they have commenced production at the Penészlek-105 well in Hungary. The well is expected to produce 2 MMscfd and is regarded as a major milestone for the company who has a 51% revenue interest in the well. [1]
Ascent Resources Managing Director Jeremy Eng said,
"The initiation of production on PEN-105 not only provides cash flow but demonstrates the success of our strategy of targeting development projects where there is instant demand for our production. The short term set back of PEN-101 is not expected to cause significant delay and as soon as the drill rig is available we should be in a position to ready the well for production. With production online from Hungary, we now look towards further results from drilling in Italy and the analysis of 3-D seismic in Slovenia." [2]
PetroHungaria kft have also decided to abandon PEN-104, which is a disappointing outcome for Ascent investors and have now turned their focus on drilling PEN-106 which is targeting a structure that is similar to that proven by the PEN-105 well. [3]
Following the announcement Fox Davies have reiterated its buy recommendation on AST up to 20p, [4] which this follows a recent recommendation by Astaire in a note to its investors where it calculates Ascent’s total NAV at 14p per share [5]
Moving forward, Ascent now anticipate to be able to provide core results from the Fontana-1 drill in Italy’s Latina Valley and the eagerly anticipated 3-D seismic in Slovenia. Progress is also being made with regard to a joint venture in the appraisal of the Hermrigen Gas discovery in Switzerland which is currently under offer through their agent Envoi. [6]
Disclosure of Interest: The Author holds shares in Ascent Resources.
