REG - Ascent Resources PLC - Funding, Corporate Update & TVR

Ascent ResourcesAnnouncement

01/12/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221201:nRSA1736Ia&default-theme=true

RNS Number : 1736I  Ascent Resources PLC  01 December 2022

01 December 2022

Ascent Resources plc

("Ascent" or the "Company")

Issue of new Equity, Debt Extension, Corporate Update, Proposed New Director
Appointment and Total Voting Rights

Ascent Resources Plc (LON: AST), the onshore Hispanic American and European
focussed energy and natural resources company, announces that it has
undertaken a placing raising gross proceeds of £0.6 million, extended the
maturity date of its loan and provides an update in relation to operations at
its producing Slovenian gas project and ongoing partner disputes. In addition,
the Company is delighted to announce the proposed appointment, subject to
standard regulatory checks, of Marco Fumagalli, funding partner of Continental
Investment Partners, to the Board as a Non-Executive Director.

Fundraising & Equity Issue

The Company is pleased to announce that it has raised £0.6 million (before
expenses) in new equity funding to allow the Company to continue to pursue its
revenue recognition claim against its joint venture ("JV") partner Geoenergo
as well as to fund near term business development and general and
administrative expenses.

The Company has today raised total gross new equity proceeds of £0.6 million
by way of issue of 15,000,000 new ordinary shares of 0.5 pence each ("Placing
Shares"), to new and existing shareholders, at a price of 4 pence per Placing
Share ("Placing Price") (the "Fundraising"). The Placing Price represents an
approximate 5% discount to the closing mid-market price on 30 November 2022,
of 4.25 pence, being the latest practicable date prior to the publication of
this announcement. Each Placing Share shall have one warrant attached to it
giving the holder the right to exercise the warrant into one new share of the
Company by paying a warrant exercise price of 5 pence per new warrant share at
any time in the next two years. In addition, the Company will be issuing
1,232,500 new ordinary shares of 0.5 pence each to corporate suppliers and
international contractors ("Consultant Shares"), at the Placing Price, in
connection with contracted services rendered to the Company totalling
£49,300.

Debt Extension

To allow sufficient runway for the Company to advance its revenue recognition
claim against its JV partner to a binding conclusion as well as wider
corporate initiatives, the Company also announces that it has agreed with its
only lender, RiverFort, to restructure its debts of £270,000 plus the 8 per
cent. coupon which was previously due to mature on 31 December 2022 as well as
the £270,020 which was due for repayment in six monthly cash instalments of
£45,003 per month commencing in mid-February through to July 2023 (as
announced 24 December 2021). Ascent has agreed to repay £50,000 of the total
outstanding payment obligations of £561,620, with £25,000 in cash plus
£25,000 which will be satisfied with the issue of 625,000 new shares ("Debt
Shares") in the Company valued at the Placing Price. The remaining balance of
£511,620 has also been re-profiled such that it will incur a coupon of 8 per
cent and now be redeemable in six equal cash instalments of £92,091.60 as of
14 September 2023 and monthly thereafter with final payment on 14 February
2024. The Company has the right to redeem the loan early at any time. In
consideration for Riverfort agreeing to re-profile the loans the Company has
agreed to extend the expiry date of the 3.33 million warrants exercisable over
3 years at 7.5 pence (as announced 1 December 2020) and the 3.6 million
warrants exercisable over 2 years at 5 pence issued in December 2021 such that
both warrants shall now expire on the 31 December 2025, as well as issuing
Riverfort with 4.6 million new warrants on the same terms as the placing
warrants.

Admission and Total Voting Rights

Application has been made to the London Stock Exchange for the Placing Shares,
Consultancy Shares and Debt Shares to be admitted to trading on AIM
("Admission") and it is expected that such Admission will occur at 8.00 a.m.
on 6 December 2022. The Placing, Consultancy and Debt Shares will be issued
credited as fully paid and will rank in full for all dividends and other
distributions declared, made or paid after the admission of the Placing,
Consultancy and Debt Shares, respectively and will otherwise be identical to
and rank on Admission pari passu in all respects with the existing Ordinary
Shares. The Placing, Consultancy and Debt Shares are not being made available
to the public and are not being offered or sold into any jurisdiction where it
would be unlawful to do so.

Following Admission of the Placing, Consultancy and Debt Shares, the Company
will have 152,418,015 Ordinary Shares in issue, none of which will be held in
treasury. Accordingly, the total number of voting rights in the Company will
be 152,418,015  and shareholders may use this figure as the denominator for
the calculations by which they will determine if they are required to notify
their interest in, or a change to their interest in, the Company under the
FCA's Disclosure Guidance and Transparency Rules.

Update on Arbitration against the Republic of Slovenia

The Company also announces that its €500+ million damages claim against
the Republic of Slovenia continues to progress. It was formally registered by
the International Centre for Settlement of Investment Disputes ("ICSID") on 1
September 2022 and the Company confirms, as is published on the ICSID online
case registry, that it has now appointed Mr Klaus Reichert SC as
arbitrator. Mr Reichert is of German/Irish nationality. Once the other two
arbitrators are appointed, the details will be published on ICSID's website
and the tribunal will be constituted. The company expects that the procedural
first session will take place during the first half of 2023. Further
announcements will be made as required.

Operational Update

The PG-10 and PG-11A wells produced a total of 117,687 scm of gas in October
2022 and have produced a total of 97,154 scm of gas for the first three weeks
of November 2022, with that level of production expected to continue in the
short term. The Company notes that the Central Eastern Gas Hub prices remain
favourable with day ahead market currently at circa €140/MWh and Q1 2023
futures at circa €134/MWh.

The Company is pleased to announce that it has agreed with its JV partner,
Geoenergo, to implement an Ascent recommended maintenance and operational
programme at the PG-11A well, which will include a "fishing" operation. The
fishing operation will seek to remove or bypass a mechanical obstruction which
was historically left in the well when it was drilled, as previously announced
on 5 April 2018, and the Company believes that this has been impairing
production.

In accordance with the terms of the joint venture Ascent will pay 100per cent
of the costs and receives a preferential cost recovery paid out of 90 per cent
of the hydrocarbon revenues it is entitled to until such time as it has
recovered its initial investment (currently €50+ million), thereafter which
the Company receives 75 per cent of the hydrocarbon revenues. Accordingly, the
Company has agreed with Geoenergo that the cost of this operation, which is
expected to be circa €185,000, will be paid out of a portion of the H1 2022
hydrocarbon sales proceeds owed to Ascent, but currently held on account by
Geoenergo and subject to forthcoming arbitration (as announced on 6 October
2022).  The Company is pleased to be able to progress this important
operation and also commence accessing its hydrocarbon production proceeds
balance held on account.

The Company has secured the necessary long lead items, initiated the
permitting procedures and the works are expected to be completed in January
2023. During the maintenance and operational works, which are expected to last
two to three weeks, production at the PG-11A well will be temporarily paused.
The Company believes that should the operation be able to remove the
obstruction, then production from the PG-11A well could be materially
increased on a comparable basis to the PG-11A production levels realised year
to date.

Update on JV Partner Disputes

The Company continues to progress its Ljubljana Arbitration Centre ("LAC")
registered claim against its defaulting JV partner, Geoenergo, in relation to
Ascent Slovenia Limited's ("ASL") immediate receipt of payment for its share
of the 2022 PG-10 and PG-11A hydrocarbon sales revenues agreed with Geoenergo,
but currently withheld by it, relating to the first 6 months of 2022
production totalling €857,617 plus further amounts invoiced by ASL for July
2022 through to October 2022 of €470,626 as well as securing the timely
payment of all future invoices. In addition, the arbitration process targets a
binding resolution on which wells are included in the application of the
baseline production profile with regards to ASL's claims to revenue
entitlement from other wells in the concession area. ASL has a total claim in
excess of €4 million.

As part of the LAC arbitration process, the parties must pay the arbitration
fees of €175,057 (payable equally between Ascent and Geoenergo) by the 16
December 2022. It is expected that the substance of the arbitration
proceedings will accelerate through January 2023 and the process will continue
to follow a structured path to binding resolution. The Board remains confident
in ASLs claims to revenue within the full concession area. Further updates
will be announced in due course.

The JV partners and the JV service provider, Petrol Geo, who is a connected
party to Geoenergo by virtue of Petrol being a common stakeholder, have agreed
to enter into mediation relating to amounts claimed by the service provider of
circa €235k relating to services accepted as provided in 2019 and other
rejected and disputed amounts of circa €1.5 million. Once matters are
resolved with Geoenergo on ASL's revenue recognition, ASL expects to be able
to conclude the disputed matters with the service provider.

Proposed appointment of Non-executive Director

Ascent is pleased to announce the proposed appointment, subject to completion
of the standard regulatory checks, of Marco Fumagalli to the Board as a
Non-Executive Director of the Company. Marco is a Funding Partner at
Continental Investment Partners SA, a Swiss-based investment fund. Marco is a
well-known Italian businessman and industrial investor who was previously a
group partner at 3i. He is a qualified accountant and holds a degree in
business administration from Bocconi University in Milan and has many years'
experience as an AIM company director. On appointment, Marco will become
Chairman of the Audit Committee.

 

James Parsons, Chairman of Ascent Resources, commented:

"The steps we announce today mark important inflection points for Ascent as we
continue to both extract value from our Slovenian asset whilst also
repositioning the business towards industrial ESG metals opportunities
elsewhere.  We of course look forward to welcoming Marco to the Board, with a
view to both strengthening our board composition and providing future access
to long term institutional capital.  We expect to make material progress
across both our arbitration processes early in the New Year and look forward
to updating shareholders in due course."

Enquiries:

 Ascent Resources plc                        Via Vigo Communications

 Andrew Dennan
 WH Ireland, Nominated Adviser & Broker      0207 220 1666

 James Joyce / Sarah Mather
 Novum Securities, Joint Broker              0207 399 9400

 Jon Belliss

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  IOEURAARUAUAOUA