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(Sharecast News) - Ascent Resources announced the launch of a work programme targeting the reactivation of existing wells in Utah on Friday, following its conditional agreement to acquire a 10% stake in ARB Energy Utah-operated leases and the right to half of incremental production from work-over operations it funds.
The AIM-traded company said it had worked with ARB to identify 15 initial wells for reactivation, with a combined budget of $0.1m.
It said the first phase would focus on five wells, where compression units would be installed to mitigate high export pipeline back-pressure that has prevented production.
Ascent said it was funding 100% of the costs for the operations, and would receive a 50% share of the resulting increased output.
The investment would be advanced to ARB via a loan note, which would be converted into a joint operating agreement contribution upon completion of the acquisition, which remained subject to shareholder approval.
Ascent said the gas gathering third party had been notified to expect additional volumes once production resumed.
The operator was planning to continue with further low-cost, rigless work-over activity in the coming weeks.
At 0810 BST, shares in Ascent Resources were up 5.26% at 0.5p.
Reporting by Josh White for Sharecast.com.
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