AIM-listed Ascent Resources has agreed to sell its Italian operation to Global Power Resources in a deal worth over €8m that will enable the oil and gas explorer to slash operating costs and focus on its priority Petišovci gas development in Slovenia.
Under the terms of the deal, GPS will pay Ascent €100,000 cash and also assume all future work commitments of Ascent Resources Italia – estimated to be in the region of €7.3m – along with its outstanding financial liabilities (a €700,000 bank loan). Ascent has also written off a capital contribution to ARI of €600,000.
Ascent has, however, retained a call option that allows it to buy at least a 51% participation – at cost plus 5% – in any future discovery that ARI makes. The option is priced at €100,000 and will be netted off against the €100,000 cash receivable from GPS.
Len Reece, Ascent’s chief executive, says that the deal had significantly reduced the company’s corporate overhead while “retaining possible future upside in the global energy sector”.