Oil & Gas Corporate News
Ascent Resources (LON:AST) (BUY, £0.20) (AST, 5.63p, ? (36.36%)) has received an independent report from Rps Group (LON:RPS) Energy for the Petisovci-Lovaszi project area that covers some 200km2 across the Hungarian-Slovenian border. RPS estimates P50 gas in place of 412 Bcf with P90 and P10 estimates of 200 Bcf and 834 Bcf and a mean of 478 Bcf. The area benefits from excellent gas pipeline infrastructure and strong regional gas price, e.g. $9.0/mscf in Hungary. Ascent has 3D seismic coverage of the entire area and the resulting structural interpretation of the main targets is significantly different from the previous geological model. The structures have two sets of reservoirs, the shallower Pontian and the deeper Miocene, The Miocene reservoirs are Ascent's development objective as the shallow reservoirs were extensively developed during the 1960's and are considered to be almost fully depleted. The RPS report considers mainly the Miocene reservoirs that contain gas in low permeability sandstones found at a moderate depth of 2,000-3,000m. These unconventional resources require enhanced productivity techniques to enable them to produce at commercially viable rates, such as horizontal or extended reach drilling and hydraulic fracture stimulation. Recovery factors for tight gas reserves generally exceed 50% of the gas in place and further work is underway by RPS to accurately forecast the recovery factors that can be expected for the Miocene reservoirs. The Pg-11 well is ready to drill with commencement targeted in November 2010. This well has a number of important objectives and the evaluation programme for the well, including core sampling and state-of-the-art wireline logging, is designed to collect sufficient data for stimulation design, as well as calibration of the 3-D seismic to optimise the geological modelling over the entire project area. Ascent's Board is considering the best means to maximise shareholder exposure to the substantial potential upside of the project, whilst mitigating the risks associated with undertaking the work programme on a sole risk basis.
Comment: Positive news on the potential of the deeper Miocene tight gas although recovery factor and cost of development will be an issue.
Rockhopper Exploration (LON:RKH) (BUY, £5.00) (RKH, 460p, ? (0.11%)) announced a possible continuation of the drilling campaign under a new rig contract consisting of a…
