LJUBLJANA (Slovenia), May 29 (SeeNews) – UK-listed Ascent Resources expects to receive permits for a re-entry and stimulation of its Petisovci tight gas project in Slovenia by the end of the year, the company said.
"The first step, which is the feedback from the Administrative Court appeal initiated by the joint venture partners in July 2019 against the decision of the Slovenian Environmental Agency (ARSO) to require a full environmental impact assessment, is anticipated to be received by the end of August 2020," Ascent said in a statement on Thursday.
In preparation for receiving the permits to stimulate PG-10 and PG-11A, Ascent has hired an expert consultancy team to review the historic stimulation data at Petisovci, and to design a detailed forward stimulation programme in order for Ascent to be able to procure equipment without delay when permits are received, taking advantage of the reduced prices of stimulation equipment in the current economic climate. The consultants will also prepare a full field development plan.
In addition, Ascent has submitted a proposal to its joint venture partner in Slovenia to redraw their joint venture structure in a cost-effective and industry-standard manner, which also includes a proposed solution for the outstanding balances from 2019 due to be paid by Ascent.
Ascent said it has invested some 50 million euro ($56 million) since it entered the Petisovci project 13 years ago, adding that the asset has significant oil and gas reserves and resources and benefits from an established, local production infrastructure with connections to both domestic and export markets.
In order to generate positive cash flow, the output of the Petisovci project needs to be sold at realised gas prices of above 1.80 euro to 2.00 euro per MscF, meaning a Central European Gas Hub Index (CEGH) of 10.5 euro/MWh based on the current sales price formula, the company added.
"The Company notes that the average 2019 CEGH index was Euro 14.4/MWh and despite the recent collapse in global oil and gas prices that the 2021/22 gas futures are already circa Euro 13-15/MWh. Hence the Board see significant core economic value at Petisovci and expect significant cash generation from the asset in the medium term with further upside if global oil and gas prices continue to recover," Ascent noted.
The company holds a 75% interest in the Petisovci project, which lies in the northeastern corner of Slovenia between Hungary and Croatia, and its joint venture partner Geoenergo holds the remaining 25%. The current concession was awarded to Geoenergo in 2002 and is due for renewal in 2022.
($=0.9003 euro)