European oil and gas exploration and production company Ascent Resources plc has agreed to sell a 45% interest in Italian drilling contractor Perazzoli Drilling srl for a cash consideration of EUR1.85 million.

Ascent's original interest was purchased in September 2007 to provide priority access, and ensure optimal contract terms for drilling services. These advantages will be retained through a five year service alliance with Perazzoli, which provides for a 30% discount on EUR10 million of drilling services to Ascent and first call on uncommitted drilling units.

The company's original 22.5% interest in Perazzoli was held through its 50% owned subsidiary, Ascent Drilling Ltd., which was owned jointly with Ascent director Malcolm Groom. To facilitate the transaction, Ascent agreed to purchase Groom's 50% interest in Ascent Drilling and therefore a further 22.5% interest in Perazzoli by placing to him, 15,529,981 Ascent shares, providing Ascent with a 45% interest in Perazzoli.

These shares, when issued, will be priced at 5.105p each representing a 9% discount to the 15 day average trading price before January 26, 2010, which is the pricing mechanism used for Ascent's equity line of credit with GEM Global Yield Fund.

As Groom is a director of Ascent, the purchase of his share of Ascent Drilling is a related party transaction. The board, with the exception of Groom, having consulted with the company's nominated adviser, Astaire Securities Plc, consider the terms of the transaction fair and reasonable.

The purchase of Groom's 50% interest in Ascent Drilling is conditional on the relevant resolutions being duly passed by Shareholders at an Extraordinary General Meeting, scheduled for 12 March 2010 to authorise the transaction. Following completion, Groom will be interested in 17,527,686 shares of Ascent representing 3.40% of the total issued shares.

At year-end December 2008, Ascent’s most recently published audited financial statements, the company reported a share of profit from Perazzoli of GBP88,000. At that time the carrying value of the company's investment was GBP1.3 million. Both values reflect a 45% interest in the investment.

Since beginning operations in 2005, the company has built a portfolio of roughly 20 oil and gas projects across Europe in Hungary, Switzerland, Spain, Italy, Slovenia and the Netherlands. With the exception of the Netherlands, all the company’s projects are onshore.