Business
Sale of Spanish Assets
Sale of Spanish Assets.
About this update from Ascent Resources Plc
[{"type":"text","content":"\n Ascent Resources PLC\n25 October 2007\n\n\n Ascent Resources plc / Epic: AST / Index: AIM / Sector: Oil and Gas\n\n\n25th October 2007\n\n\n Ascent Resources plc ('Ascent' or 'the Company')\n\n Agreement to Sell Spanish Oil Assets and Farm-out of First Swiss Project\n\n\nAscent Resources plc, the AIM-traded oil and gas exploration and production\ncompany, has entered into an agreement to sell its oil assets in Spain and to\nfarm-out up to 40% of its 90% interest in the Seeland-Frienisberg Permit in the\nCanton of Berne in Switzerland, to AIM listed Leni Gas and Oil Plc ('LGO').\n\n\nUnder the proposed agreement, LGO will purchase Ascent's Spanish oil assets and\nthe entire issued share capital of Ascent's wholly owned subsidiary Compania\nPetrolifera de Sedano ('CPS'). These assets have a book value of £321,000 and\nhave an operating profit from production of £241,000. The consideration of €2.25\nmillion and 8 million ordinary LGO shares will be partially used to repay\noutstanding intercompany loans in Spain.\n\n\nAscent's Spanish oil assets include 88.75% of the Ayoluengo field in the La Lora\nconcession and CPS, which has a 50% interest in three exploration licences,\nHuemeces, Basconcillos-H and Valderedibles. These licences are held on a 50:50\nbasis with Tethys Oil AB of Sweden. This divestment is in line with Ascent's\nstrategy of focussing on its gas assets, which the Board believes provides\ngreater stability due to the strength of the mainland European gas market. The\nacquisition of these assets by LGO constitutes a reverse takeover under the AIM\nRules and is therefore conditional (inter alia) upon LGO gaining approval from\nits shareholders.\n\n\nAscent is retaining a presence in Spain with its 50% interest in the Rocamundo\ngas exploration application, where the Company's partners are Tethys Oil and\nShesa, the Basque oil company, who have a 30% interest and a 20% interest\nrespectively. This exploration permit is expected to be issued later this year.\n\n\nIn Switzerland, Ascent has conditionally agreed to farm-out up to 40% of its 90%\ninterest in the Seeland-Freinisberg Permit in north-western Switzerland to LGO.\nSchweizerisches Erdol AG ('SEAG') is the concession holder with a 10% interest.\nUnder the terms of the farm-out, LGO will fund the costs of the drilling and\ntesting of the first well in the ex...