Ascent Resources (LON:AST) (BUY, £0.20) (4.88p, %u25B2 (2.63%)) through its wholly owned subsidiary Ascent Resources Italia srl, has agreed terms with farm-in partner Otto Energy Limited for Otto's withdrawal from the Cento & Bastiglia exploration permit in the Po Valley of northern Italy. Under the terms of the withdrawal, Ascent will retain 100% of the licence and Otto will immediately contribute funds towards potential restoration costs and forfeit its entitlement to the refund of any VAT due on the project. In 2007, Ascent farmed out a 50% working interest in the Permit to Otto in return for the funding of the Gazzata-1 exploration well that was drilled in 2009 and €1.5M of seismic expenses.
Comment: We do not assign any value to the Cento & Bastiglia permit in our risked NAV. Hence the withdrawal of Otto Energy has no impact on either our valuation or rating of Ascent.
Egdon Resources (LON:EDR) (12p, %u25BA (0.0%)) announced that production will commence on the Keddington-3 sidetrack well following drilling this month. The well reached a total depth of 2728m on 15 April and ca.126m of sandstone was encountered in the upper part of the well including 117m of Unit 1 sandstone which had elevated mud gas readings indicating the presence of oil. Elevated gas readings of 26% were encountered in sandstone at 2715m measured depth, interpreted to be the gas-bearing Namurian sequence which is developed below the oil productive zones at the Keddington Field. At Dukes Wood the well had produced a total of 537bbl at an average daily rate of approximately 20bopd up until 9 April. As expected the water production was high at 85% of the average daily production of 130bbls of fluid indicating good reservoir properties. Egdon has consent for an Extended Well Test of up to 6m and it intends to perforate and test additional intervals over the coming months to determine the commerciality of the well and to assist with planning further wells on the field.
Drilling operations were completed on 10 February at the 65% owned Kirklington Oil Field in PEDL203. The Kirklington-3 well encountered the target Chatsworth Grit sandstone deeper than predicted and below the interpreted field oil-water contact. The well was cemented back to drill a sub-vertical sidetrack (Kirklington-3z) close to the original Kirklington-2 producer. Kirklington-3z was drilled to a total depth of 698m and encountered the Chatsworth Grit…
