Oil & Gas Corporate News

Ascent Resources (LON:AST) (BUY, £0.20) (AST, 6.25p, %u25B2 (4.17%)) has started mobilising a rig for the Pg-11 evaluation well in the Petisovci-Lovaszi project area in Slovenia, and that they expect to commence drilling on or around 16 December 2010, subject to weather conditions. The well is the first to be drilled by Ascent on the Petisovci-Lovaszi project area in which the Company recently announced an independently verified P50 estimate of gas-in-place of 412Bcf. The PG-11 well has a number of important objectives and the evaluation programme, which includes core sampling and state-of-the-art wireline logging, is designed to collect sufficient data for development planning, as well as calibration of the 3-D seismic to optimise the geological modelling over the entire project area.

Comment: The Petisovci-Lovaszi area is the company's operational focus. Ascent has taken important steps to progress the work on this asset including the recent financing through a loan facility and the Standby Equity Distribution Agreement ("SEDA") with Yorkville. This asset has the potential to drive near-term value and it is welcome news that the drilling operations are underway; PG-11 will be the first in a 4-well drilling programme. We look forward to further updates from the evaluation programme and maintain our Buy recommendation.

Desire Petroleum (LON:DES) (BUY, £2.00) (DES, 152.75p, %u25B2 (44.34%)) announced that the 14/15-2 Rachel North well has reached a total depth of 3052m and that preliminary data collected indicate that this well is an oil discovery. The company has run an initial suite of wireline logs and this together with the drilling data indicate that the well encountered a 349m gross interval from 2621-2970m of sands and shales with hydrocarbons, of which 57m is net pay in multiple zones. The thickest zone is 8m thick with an average porosity of 20%. Other zones are thinly bedded and lower porosity but require further analysis from additional wireline logs to establish reservoir potential. Desire now intends to complete the wireline logging and wireline sampling programme to obtain more information on the reservoir quality, the hydrocarbon saturations and the fluid type to assess the significance of this discovery. Further information will be released in due course.

Comment: Have Desire and Rockhopper cracked the North Falkland Basin? Possibly, as Rachel confirms one of…

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