Ascent Resources: Time For The Ascent?

23rd Sep '10 by jonnyt

4 comments 6525 reads

I have held Ascent Resources (LON:AST) for several years now and it’s currently trading around my break even price of 4p. The reason I bought Ascent was for its multibag potential with three chances of a company making discovery.

1) Gazatta – This proved to be carbonated water rather than the 100BCF we were hoping for.

2) Agnani – A shallow oil prospect has been drilled a few times but it would appear off structure. This will be drilled again hopefully within 6 months

3) Hemriggen – What should be an appraisal of an existing discovery with an extension into what was the primary objective in the original drill. This has been farmed out to eCorp who intend to drill ASAP. AST have back in rights under very good economic terms should this drill come up trumps. Hemriggen has the potential for 300 BCF recoverable.

Since my initial investment, Ascent have acquired acreage in Slovenia and Hungary called Lovászi and Peti?ovci which are known to contain deep but tight gas reservoirs. 3D seismic has been carried out and management believes this is 675 BCF recoverable in Slovenia alone. Ascent owns a minimum of 15% of this acreage rising to 75% in parts. However this situation is fluid and Ascent have suggested they will go on a sole risk basis as it seems some partners especially Stratic are either unwilling or unable to drill this acreage. Given this is tight gas there is no certainty that they can unlock the resource. If they can the payback will be huge. Fiscal terms and Gas prices in this part of the World are fantastic. The countries concerned rely of the supply of Gas from Russia, something politically they don’t want. The first well is due to spud Q3, although as I write it looks like Q4 is going to be more appropriate. My view is that success on the first well could put Ascent's shares into orbit.

Today, Ascent has acquired a 60% interest in the Igal-II exploration permit in Central Hungary. According to the Envoi note ^[1] , this acreage could contain over 1 TCF of recoverable gas. Some of the targets are over 100 BCF. The acreage is also thought to contain oil. Indeed, Ascent has stated that they will initially target Oil in 2011. 3D…

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jonnyt

23rd Sep '10

For those of you that are interested I advise you to take a closer look at the May Presentation http://www.ascentresources.co.uk/system/files/35/original/Presentation_May4_2010.pdf

Page 8 - Shows the Swiss Hemriggen Appraisal
Page 13 is Lovászi and Peti?ovci
Page 17 is Agnani
Page 19 is an additional piece of inventory in Slovenia Filovci which may also be drilled in 2011

Proselenes

26th Sep '10

Couple of broker comments on AST last week.

http://www.onenewspage.co.uk/news/Markets/20100920/15193820/Broker-Watch-featuring-Eckoh-Ascent-Resources-Domino’s-Pizza.htm

........Turning to *Ascent Resources * (LON:AST), Astaire said it h.........................

and

http://proactiveinvestors.co.uk/columns/fox-davies-capital/3481/matra-petroleumascent-resources-gulfsands-petroleum-and-nautical-petroleum-feature-in-fox-davies-capital-newsflash-3481.html

.......Ascent Resources plc (Buy, 20p) (AST.L, 4.1p, ? 10.0%) has acquired a 60% interest in the 1,990km2 Igal-II exploration permit in Central Hungary thou..................

30th Sep '10

Interims out today with an Op's update:

Penészlek Gas Production Project (48.78%):

After commencement at full flow rates in late May, gas production (gross) now continues at over 2.5 MMscfd (72,000 Msm3/d; 425 Boepd) from the PEN-101 and PEN-105 wells. Pipeline modifications are planned that will cause a reduction in operating pressure and consequently an increase in production rates. The partners in the development, plan to decide early in 2011 regarding possible additional wells after the Mining Plot that supersedes the Exploration permit is issued.

Peti?ovci/Lovaszi Exploration and Development :

This project, where the results of 200 km2 of new 3-D seismic has been acquired and processed, has the potential to be the largest asset in the portfolio. The main redevelopment project, which lies across the Hungarian-Slovenian border, is in tight (low permeability) gas sands in Miocene formations in the Peti?ovci/Lovaszi structure. Exploration targets exist in similar parallel structures as well as flank plays identified on the seismic. Ascent's partner in Slovenia, Geoenergo d.o.o., has a 25% interest while MOL Oil & Gas, its partner in Hungary, has a 50% interest. The Pg-11 well, the first in the Slovenian part of the project, is ready to drill. The Company has engaged independent experts to assess potential reserve size, to confirm management's assessment of the project and to assist partners in the planning of future activities. Importantly the infrastructure is in place to allow for early production and the project can potentially provide a significant contribution to the Slovenian and Hungarian gas markets where strong regional gas pricing prevails.

The Company believes this to be a unique project for onshore Europe, due to its scale and risk reward profile, and a considerable work programme will be needed to potentially follow on from the successful drilling of the PG-11 well. The Board is currently considering the best means to advance this project to maximise shareholder exposure to the significant potential upside, whilst considering the risks associated with undertaking the work programme on a sole risk basis. In essence, due to the prospectivity, the Board is maintaining as much control as possible under its current financial position.

Igal-II Exploration (60%):

Seismic is currently being acquired on this project which is an exploration venture focussed on pre-Pannonian sediments in western central Hungary. Three nearby wells demonstrate excellent prospectivity at depths of 1,000 m and a number of Hungarian fields produce good quality oil from similar horizons.

Latina Valley Exploration and Redevelopment:

During the summer, seismic has been acquired over the Ripi oilfield where redevelopment activities are planned. Nearby, in the area where the Anagni-2 appraisal well is planned, a small 2-D seismic acquisition is due to commence imminently with the objective of confirming the accuracy of drilling locations. Ascent has a 50% interest in Ripi and an 80% interest in Anagni. Permitting is underway for the Anagni-2 appraisal well and it is expected that the permit will be issued prior to the end of the year.

M10/11 - Offshore Netherlands Gas Appraisal:

Over the period, a substantial amount of work has been completed on this project. A conceptual development plan demonstrates the viability of producing the gas reserves that have already been discovered in this exploration permit. Ascent has a 54% interest in this project and partners, EBN (the Dutch State Oil Company) with a 40% interest, and GTO Limited, with a 6% interest, are required to decide on the drilling of the M10-6 appraisal well before the end of 2010. With a successful appraisal, this well would then become a production well.

Portfolio Divestments

In April, Ascent's Swiss portfolio was sold to eCORP Europe International, a subsidiary of eCORp LLC, an American unconventional resource and gas storage specialist. The consideration was €8 million and back-in rights were retained so that on discovery of conventional reserves in any of six prospects, Ascent can participate with either 45% or 22.5% of the development of those reserves.

Under the terms of the transaction, Ascent retained the right to acquire 45% of any conventional discovery from the Hermrigen 2, Essertines 2 and Linden 2 appraisal wells by paying 45% of drilling costs post any discovery - with no obligation to participate. Additionally Ascent retains the right to 22.5% of any discovery from certain additional conventional prospects by paying 22.5% of the drilling costs post discovery, again with no obligation to participate. eCORP has irrevocably committed to drill the Hermrigen-2 appraisal well with permitting nearing completion. Ascent is awaiting notification from the operator for a firm drilling date. The first well to be drilled will be Hermrigen-2, an appraisal to the Hermrigen-1 gas discovery drilled by Elf-Aquitaine in 1982.

7th Dec '10

The first bag of a potential multibag has been achieved to day, around 10 weeks since I authored the article.

I've personally top sliced 10% of my holding.

In my view the rise is due to some institutional buying ahead of the PG-11 spud.

Ascent Resources: Time for the Ascent?

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Jonnyt

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