Ascent Resources (LON:AST) announced today that it has agreed to sell a 45% interest in Perazzoli Drilling for EUR1.86 million.
The European oil and gas exploration and production company, founded in 2005, will retain a five year service alliance with Perazzoli - in which priority access, optimal contract terms for drilling services, first call on uncommitted drilling units and a 30% discount on 10 million Euros of drilling services will be retained.
Managing Director of Ascent, Jeremy Eng, commented:
"The sale of our interest in Perazzoli, whilst retaining the benefits that the ownership of a minority interest brought, is an excellent outcome for Ascent. Perazzoli is aiming to expand its operations and will therefore require additional funding which, given the intensive work programmes being conducted on our portfolio of oil and gas assets, would I believe, not be the best use of our shareholders' funds.
The Company's original 22.5% interest in Perazzoli was held through its 50% owned subsidiary, Ascent Drilling Limited, which was owned jointly with Ascent Director Mr Malcolm Groom. To facilitate the transaction, Ascent agreed to purchase Mr Groom's 50% interest in Ascent Drilling and therefore a further 22.5% interest in Perazzoli by placing to him, 15,529,981 Ascent shares, providing Ascent with a 45% interest in Perazzoli. These shares, when issued, will be priced at 5.105p.
As Malcolm Groom is the Director of Ascent Resources, the purchase of his share of Ascent Drilling is a related party transaction. The board confirmed that the transaction has since been examined by a nominated advisor, Astaire Securities, who deemed the transaction 'fair and reasonable in so far as the company's shareholders are concerned'. Jeremy Eng added:
This transaction allows us to retain access to Perazzoli's drilling equipment with attractive discounts on its services and provides additional funds for use in developing our projects. Furthermore, we were pleased that Mr Groom has demonstrated his sustained confidence in Ascent, having agreed to sell his interest in Ascent Drilling in an all share agreement."
The purchase of Mr Groom's 50% interest is subject to the resolutions being passed by the Shareholders at an EGM, scheduled for 12th March 2010. Providing this goes ahead, Mr Groom will have 3.40% of total shares issued, equal to 17,527,686 shares of Ascent…
