News

June 16, 2009

Ascent Resources Suffers As Gazzatta-1 Is P&A And Its First San Severina Deal Is Aborted

It never rains but it pours. Shares in Ascent Resources lost 47 per cent of their value on Tuesday when the AIM-quoted firm not only released disappointing drilling results but also announced the termination of a deal that would have given it a four per cent stake in a promising oil shale project in the US.

First, the dry hole. The high impact Gazzata-1 well in Italy’s Po Valley is being plugged and abandoned after it reached a total depth of 2,840 metres and failed to find commercial gas reserves. Although the costs of the duster were borne by farm-in partner Otto Energy of Australia, the dry hole removes some of the big upside in the Ascent portfolio.

Next, the termination of the San Severina deal in the US.  This was the first sign that a joint venture arrangement signed in October 2008 with Swiss investment house San Severina Holdings was finally bearing fruit when in early June it agreed to buy a 20 per cent interest in the promising Jolly Ranch oil and gas project in Colorado.  Under the terms of the arrangement with Ascent, the AIM firm was to secure a four per cent interest and manage the asset on behalf of San...