REG - Ascent Resources PLC - Interim results for the period ended 30 June 2024
19/09/2024 07:00
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RNS Number : 7765E Ascent Resources PLC 19 September 2024
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
19 September 2024
FOR IMMEDIATE RELEASE
Ascent Resources plc
("Ascent" or "the Company")
Interim results for the period ended 30 June 2024
Ascent Resources plc (LON:AST), the AIM quoted European and Latin American
focused natural resources company ("Company") is pleased to report its interim
results for the six months ended 30 June 2024 (the "Period" or "H1 2024").
Highlights:
· Completion of shareholder distribution with ring-fenced access to
49% of the net proceeds received in relation to a positive outcome of the
Company's significant Energy Charter Treaty ("ECT") damages claim;
· Initiation of maiden investment away from Slovenia, with an
initial interest in a U.S. based company GNG LLC which acquired the 60 mmscfd
(million standard cubic feet) nameplate "Lisbon Valley" gas and helium
processing facilities in Utah, U.S.A. out of Chapter 11 insolvency, exposing
the Company to the U.S. natural gas and helium purification and liquidation
sectors;
· Insolvency of Slovenian joint venture partner and Ascent's
submission of approx. €11 million claim in the ongoing insolvency
proceedings;
· Unilateral termination of the RJOA (Slovenian joint venture
agreement) by the administrator of Geoenergo effective as of 19 January 2024;
· New Board changes initiated and new funding secured;
· New strategic collaboration with Delta Energy SARL, a private oil
and gas company founded by Ibrahim Diab (Chairman Elect) and Eric Faillenet
(previously senior executive at Perenco and MD at Carlyle Group); and
Post Period end highlights:
· Post period under review, raised US$1 million in new equity from
a new strategic investor at a price of 2.3 pence per share, representing a
c.43% premium to the closing share price on the day before announcement.
· Successfully filed its Energy Charter Treaty damages claim reply
memorial alongside producing further witness statements including independent
expert witness statements in the fields of technical, environmental and
damages quantum analysis
Enquiries:
Ascent Resources plc Via Vigo Consulting
Andrew Dennan, CEO
Zeus, Nominated Adviser & Broker 0203 829 5000
James Joyce / Sarah Mather
Novum Securities, Joint Broker 0207 399 9400
John Belliss
CEO's statement
Shareholder Distribution
H1 2024 has seen the Company implement a shareholder distribution with rights
to redeemable preference share which enfranchises the holder to receive their
relevant pro rata portion of 49% of the net economic proceeds which may be
realised in the Company's significant and funded ECT damages claim against the
Republic of Slovenia ("ROS"). The Company still retains 100% ownership and
decision making control in relation to the claim and retains a direct 51%
economic interest in the net amounts received in the event of a successful
claim and payment of damages award. This distribution was completed following
engagement with shareholders and to enfranchise those that held the Company's
shares on the record date with a ring-fenced access to a portion of the
proceeds to be received in the event of a positive claim outcome, that would
not be diluted in the event of any future changes in the Company's issued
ordinary share capital.
Energy Charter Treaty Claim Progress
The ECT claim has continued to proceed in accordance with the timetable
previously agreed at the opening of the arbitration proceedings. Notably,
during H1 2024, the Company and its lawyers successfully rebutted the ROS's
application for security of costs.
The ECT claim continued with production of documents ordered to be exchanged
by the Tribunal. The Company has also, in July 2024, post Period in review,
successfully filed its reply memorial alongside producing further witness
statements including independent expert witness statements in the fields of
technical, environmental and damages quantum analysis. It should be cautioned
that in the event the Company is successful in its claim any amount actually
receivable by the Company may be significantly lower than the amount sought.
Entry into U.S. Onshore Natural Gas and Helium Purification & Liquefaction
Sector
In April 2024, the Company announced its maiden investment away from Slovenia,
which provides the Company and its shareholders with exposure to new growth in
the U.S.A. (a stable jurisdiction) and a cash generative asset via an
investment into GNG Partners LLC ("GNG") which had just acquired the "Lisbon
Valley" with a 60 mmscfd nameplate gas processing facility (the "Lisbon
Plant") out of Chapter 11 bankruptcy. The Lisbon Plant has helium purification
and liquidation facilities and is fed by over 500 miles of gas gathering
pipeline which spans the Paradox Basin and flows through the Four Corners
region of America.
On 23 April 2024, the Company provided a convertible loan of US$1 million to
GNG Partners LLC ("GNG") which gives the Company conversion rights into 1
million new GNG membership units, which at the time of investment represented
10% of the post conversion share capital of GNG. Since the date of this
investment GNG founders have exercised 3.1 million founder options, resulting
in GNG receiving further equity capital of US$3.1 million in cash.
GNG has acquired the Paradox Estate for an effective consideration of
approximately US$12.5 million plus cure costs relating to the assigned
contracts and leases related to the continuing operations of approximately
US$2 million ("Consideration"). The Consideration has been paid via a 7-year
loan note for an amount of c.US$7 million with interest accruing at 6% per
annum (payable in kind) ("PIK Note") provided by some of the pre-insolvency
creditors alongside new equity capital for the balance.
The Lisbon Plant is the sole operating independent natural gas processing
plant in the Paradox Basin and fed by over 500 miles (of which 279 miles are
wholly-owned by GNG) of helium rich gas gathering pipelines which have access
to helium rich gas sources with up to 7-8% He concentration in the Four
Corners region, most notably in SE Utah and NW New Mexico. The Lisbon Plant is
a 60 mmcfd gas treatment plant which has a 1.1 mmscfpd processing capacity for
helium, a 45 mmcfd cryogenic plant and 10,000 Bpd (barrels per day)
fractionation train. The plant was built specifically to process the Paradox
Basin natural gas that often has high CO(2), H(2)S, N(2) and He content. GNG
believe that the Lisbon Plant can produce approximately 3.4% of the U.S.
liquid helium production (or 1.7% of the world's liquid helium). The Lisbon
Plant is currently operational and processing gas, the plant has helium
purifying capability to process a five9's grade (99.999%) helium which can be
sold as gaseous helium directly to industrial consumers via truck. The Lisbon
Plant has a liquification unit which has been in care and maintenance since
around 2013 (when the liquified helium price was only ~US$62.25 /Mcf versus
the US$750-1,250 /Mcf range available today). The liquefaction unit is
undergoing some maintenance and upgrade works and expected to be
recommissioned by the year end.
Underpinning the acquisition of the Paradox Estate and Ascent's investment in
GNG is a plan to quickly recommission the liquification unit to rapidly move
back into premium markets of producing and selling liquified helium, as well
as further opportunity to invest in iso-containers which would provide the
business with even greater price command. Ascent and GNG have agreed to work
together with a view to Ascent potentially providing capital for this critical
value enhancing development.
Slovenian Joint Venture Partner Insolvency & Termination of Slovenian RJOA
In Q4 2023 the Company's wholly owned subsidiary Ascent Slovenia Limited
("ASL") received a favourable tribunal interim decision in relation to ASL's
Slovenian arbitration claims for payment of 90% of the proceeds received by
its JV partner, Geoenergo d.o.o., from production in excess of the baseline
production profile for all wells on the concession area (except for Pg-1 which
is wholly included as baseline production) whilst ASL is still in a
preferential recovery position (i.e. until it has earned back through
production revenues its initial sunk investment costs of approx. €50
million). Further to ASL securing this decision, the JV partner filed for
self-appointed insolvency at the start of this year. The Company and its
Slovenian legal advisors quickly moved to file a petition on the basis that
this motion was an abuse of the insolvency system by a solvent company
attempting to dispose of ASL's valid claim against them and that Geoenergo had
not engaged with ASL, its main creditor, to understand if a settlement was
possible to avoid an insolvency, such as Ascent taking ownership of
Geoenergo's assets. Whilst the relevant court did not immediately approve the
Geoenergo self-declared insolvency application and scheduled a hearing to
decide on ASL's petition, in a sudden turn of events the hearing that was
scheduled to happen in February was cancelled, a decision to initiate
bankruptcy proceeding against Geoenergo was issued, and an administrator was
appointed to Geoenergo on the 19 January 2024.
The administrator took the position, that the RJOA (the JV agreement) was
terminated by the operation of law (ex lege) on the day of commencement of the
bankruptcy procedure (19 January 2024). Subsequently, the insolvency court
confirmed Geoenergo's right to unilaterally terminate the contract in
accordance with insolvency law. In accordance with Slovenian mining law, the
mining right of Geoenergo expired on 19 April 2024, since the holder of the
mining right (Geoenergo) did not ensure a bank guarantee in the amount of the
difference between the cost of the final rehabilitation and the reserved funds
for the rehabilitation already paid into the relevant fund, in three months
from the commencement of the insolvency proceeding. Ascent had already
provided the agreed funds on account for the JV wells in 2014 in accordance
with the terms of the RJOA, but subsequently Geoenergo failed to provide the
additional monies owed relating to the other wells on the concession area
before the expiry of the three months. Accordingly the Company has no further
interest in the production of hydrocarbons in Slovenia and as a consequence of
these actions and in accordance with the RJOA, ASL has transferred the assets
it held on its balance sheet prior to the signature of the RJOA in October
2013 to Geoenergo on an "as-is" basis; these assets substantially include the
Pg-10 and Pg-11a wells. ASL has filed a claim in the insolvency proceedings
for approx. €11 million which is comprised of a claim for €8 million
relating to hydrocarbon proceeds received by Geoenergo and owed to ASL as well
as a precautionary claim of approx. €3 million relating to ASL's 75% share
of the JV assets which were invested into after the signature of the RJOA.
Whilst the Company is confident that ASL is substantially the largest creditor
of Geoenergo, there can be no certainty of recovery of all or any amounts
claimed at present.
Delta Energy SARL Strategic Collaboration
In June 2024, the Company announced that it has signed a strategic
collaboration agreement with Delta Energy SARL ("Delta"), which is a private
oil and gas company co-founded by Mr Eric Faillenet (former managing director
at Carlyle International Energy Partners and prior to that, a senior executive
at Perenco) and Mr Ibrahim Diab to take advantage of hydrocarbon opportunities
where Delta have multiple mature relationships and unique access. Any
transactions under the collaboration agreement are expected to be classified a
related party transaction. Further announcements will be made as
appropriate.
Corporate
In April 2024, in support of the Company's new investment in U.S. onshore gas
and helium processing, the Company successfully announced a new funding
package of up to US$2.7 million via a £550,000 (US$700,000) new equity
placing at the closing bid price on the day before, being 2.3 pence per new
share, and a new senior secured loan facility for up to US$2 million with an
initial US$1 million drawn down to fund the GNG investment (as set out above).
The equity subscribers and loan holder were also issued with 33% warrant
coverage which are exercisable by paying a cash exercise price of 3.22 pence
per new warrant share (being a 40% premium to placing price). The equity
placing was supported by major existing shareholders, including cornerstone
investor MBD Partners S.A. and C4 Energy Ltd, a company in which the CEO
Andrew Dennan has a 25% beneficial interest in. The loan is for a fixed term
of 12 months and has a 15% annual coupon, the loan plus coupon is convertible
at a fixed conversion price of 3.22 pence throughout its term. In the event
any loan is outstanding on the 12-month maturity date then the Company can
elect to redeem this in cash or extend the maturity by a further six months.
After the one year anniversary of the loan, the lender would have conversion
rights over the loan and accrued coupon into new equity at a price equal to
90% of the lowest VWP in the ten (10) days prior to conversion.
In tandem with the Company announcing its new investment and new funding, the
Company also announced new changes to its board with the standing-down of
non-executive directors Mr Marco Fumagalli and Mr Malcolm Graham-Wood and the
appointments of new non-executive directors Mr David Bullion and Mr Edouard
Etienvre. David has over 30 years' experience in the oil and gas industry and
is currently the CIO of American Helium LLC and CEO of GNG where the Company
has made its new investment. David is a trained geologist who has previously
enjoyed a 20 year career with BP holding various senior positions spanning the
globe before moving to independent oil and gas companies where he has focused
leading operations for the last ten years. Edouard is a seasoned executive
with over 18 years of experience in the natural resources sector initially in
banking (reserve-based lending) and more recently with private and public
E&P companies as well as commodities trading, shipping and infrastructure
companies. Edouard has extensive project management, risk assessment,
commercial, business development and financing expertise. Edouard holds a MSc
in Management from KEDGE Business School and is a non-executive director of
ADX Energy Ltd (listed on the ASX) and Rome Resources Plc (listed on the LSE
AIM).
Additionally, the Company has announced the former Executive Chairman Mr James
Parsons elected to stand-down from the Board and the Company intends to
appoint Mr Ibrahim Diab as Chairman. Ibrahim is a serial entrepreneur and
natural resources expert who led MBD Partners S.A.'s cornerstone investment
into Ascent. The appointment is subject to completion of customary regulatory
on-boarding checks and mutual agreement of a suitable service contract. The
Company also appointed Mr Lionel Therond as Chief Financial Officer
(non-board). Lionel has 30 years of experience in the oil and gas sector and
banking and has an MBA from INSEAD, a DEA in Geology and Geophysics from
Institut National Polytechnique de Lorraine and a Diplôme Ingénieur
Géologue from Ecole Nationale Supérieure de Géologie (Nancy, France). He is
a CFA Charter holder and a Fellow of the Geological Society of London.
For the Period to 30 June 2024, the Company was not able to recognise
production revenues from Slovenia due to the Company's Slovenian joint venture
partner filing for insolvency and the subsequent unilateral termination of the
JV by the administrator. Administrative costs for H1 2024 were higher than the
H1 2023 costs, most notably due to exceptional one-off workstreams relating to
the shareholder distribution and costs of initiating the Company's insolvency
claim in against its former JV partner.
Outlook
The Company has orientated itself quickly to expose shareholders to new growth
in U.S. onshore gas and helium processing via an initial investment into an
operational and cash generative midstream business in the He rich Paradox
Basin; as it continues to vigorously defend its legacy flagship investment in
Slovenia and pursue its significant damages claims. The Company has updated
its Board to accelerate its journey away from Slovenia and focus further on
onshore oil and gas and helium production and processing in the Americas and
the Company is excited about achieving further progress as the year continues
and updating shareholders as further key milestones are achieved.
Andrew Dennan
Chief Executive Officer
19 September 2024
Consolidated Income Statement
for the Period ended 30 June 2024
Period ended Period ended
30 June 2024 30 June 2023
Notes £'000s £'000s
Revenue 1 1,360
Cost of sales (26) (456)
Depreciation of oil & gas assets (1) (1)
Gross (Loss)/Profit (26) 903
Administrative expenses (786) (723)
Impairment of prepaid abandonment fund (240) -
(Loss)/Profit from operating activities (1,052) 180
Finance cost (23) (38)
Net finance costs (23) (38)
(Loss)/Profit before taxation (1,075) 142
Income tax expense - -
(Loss)/Profit for the period after tax (1,075) 142
(Loss)/Profit) for the period attributable to equity shareholders (1,075) 142
Earnings per share
Basic & fully diluted (loss)/profit per share (£) 2 (0.50) 0.09
Consolidated Statement of Comprehensive Income
for the Period ended 30 June 2024
Period ended Period ended
30 June 2024 30 June 2023
Notes £'000s £'000s
Profit / (loss) for the period (1,075) 142
Other comprehensive income
Foreign currency translation differences for foreign operations 3 16
Total comprehensive gain / (loss) for the period (1,072) 158
Consolidated Statement of Financial Position
As at 30 June 2024
30 June 31 December
2024 2023
Notes £'000s £'000s
Assets
Non-current assets
Property, plant and equipment 2 3
Prepaid abandonment fund 4 - 262
Financial assets at fair value through profit and loss 3 797 -
Total non-current assets 799 265
Current assets
Trade and other receivables 5 388 323
Cash and cash equivalents 125 475
Total current assets 513 798
Total assets 1,312 1,063
Equity and liabilities
Attributable to the equity holders of the Parent Company
Share capital 8 8,642 8,495
Share premium account 78,398 77,889
Merger reserve 570 570
Share-based payment reserve 790 574
Translation reserves (255) (258)
Retained earnings (88,723) (87,648)
Total equity attributable to the shareholders (578) (378)
Total equity (578) (378)
Non-current liabilities
Provisions 578 690
Total non-current liabilities 578 690
Current liabilities
Convertible loan notes 5 5
Borrowings 7 729 184
Trade and other payables 6 578 562
Total current liabilities 1,312 751
Total liabilities 1,890 1,441
Total equity and liabilities 1,312 1,063
Consolidated Statement of Changes in Equity
for the period ended 30 June 2024
Share capital Share premium Merger reserve Share based payment reserve Translation reserve Retained earnings Total
£'000s £'000s £'000s £'000s £'000s £'000s £'000s
Balance at 1 January 2023 8,214 76,298 570 2,131 (276) (88,457) (1,520)
Comprehensive income
Profit for the period - - - - - 142 142
Other comprehensive income
Currency translation differences - - - - 16 - 16
Total comprehensive income - - - - 16 142 158
Transactions with owners
Issue of shares during the year net of costs 66 334 - - - - 400
Costs related to share issues - (29) - - - - (29)
Share-based payments - - - 2 - - 2
Total transactions with owners 66 305 - 2 - - 373
Balance at 30 June 2023 (unaudited) 8,280 76,603 570 2,133 (260) (88,315) (989)
Balance at 1 January 2023 8,214 76,298 570 2,131 (276) (88,457) (1,520)
Comprehensive income
Loss for the period - - - - - (851) (851)
Other comprehensive income
Currency translation differences - - - - 18 - 18
Total comprehensive income - - - - 18 (851) (833)
Transactions with owners
Issue of ordinary shares 281 1,619 - - - - 1,900
Costs related to share issues - (28) - - - - (28)
Share-based payments - charge - - - 103 - - 103
Share-based payments - expired - - - (1,660) - 1,660 -
Total transactions with owners 281 1,591 - (1,557) - 1,660 1,975
Balance at 31 December 2023 (audited) 8,495 77,889 570 574 (258) (87,648) (378)
Share capital Share premium Merger reserve Share based payment reserve Translation reserve Retained earnings Total
£'000s £'000s £'000s £'000s £'000s £'000s £'000s
Balance at 1 January 2024 8,495 77,889 570 574 (258) (87,648) (378)
Comprehensive income
Loss for the period - - - - - (1,075) (1,075)
Other comprehensive income
Currency translation differences - - - - 3 - 3
Total comprehensive income - - - - 3 (1,075) (1,072)
Transactions with owners
Issue of ordinary shares 147 532 - - - - 679
Costs related to share issues - (23) - - - - (23)
Share-based payments - charge 221 221
Share-based payments - expired - - - (5) - - (5)
Total transactions with owners 147 509 - 216 - - 872
Balance at 30 June 2024 (unaudited) 8,642 78,398 570 790 (255) (88,723) (578)
Consolidated Statement of Cash Flows
for the six months ended 30 June 2024
Period ended Period ended
Notes 30 June 2024 30 June 2023
£'000s £'000s
Cash flows from operations
(loss)/Profit after tax for the period (1,075) 142
Depreciation 1 (1)
Change in receivables 5 (68) (102)
Change in payables 6 16 (542)
Change in provisions (113) -
Decrease of prepaid abandonment fund 4 262 -
Increase in share-based payments 9 218 2
Exchange differences 3 9
Net cash used in operating activities (756) (492)
Cash flows from investing activities
Investments in associates 3 (797) -
Net cash used in investing activities (797) -
Cash flows from financing activities
Interest paid and other finance fees 23 38
Proceeds from loans and borrowings 525 -
Proceeds from issue of shares 8 678 400
Share issue costs (23) (29)
Net cash generated from financing activities 1,203 409
Net increase in cash and cash equivalents for the year (350) (83)
Effect of foreign exchange differences - -
Cash and cash equivalents at beginning of the year 475 325
Cash and cash equivalents at the end of the year 125 242
Notes to the Interim Financial Statements
for the six months ended 30 June 2024
1. Accounting Policies
Reporting entity
Ascent Resources plc ('the Company') is a company domiciled in England. The
address of the Company's registered office is 5 New Street Square, London EC4A
3TW. The unaudited consolidated interim financial statements of the Company as
at 30 June 2024 comprise the Company and its subsidiaries (together referred
to as the 'Group').
Basis of preparation
The interim financial statements have been prepared in accordance with
UK-adopted international accounting standards and with the requirements of the
Companies Act 2006. The interim financial information has been prepared using
the accounting policies which were applied in the Group's statutory financial
statements for the year ended 31 December 2023.
All amounts have been prepared in British pounds, this being the Group's
presentational currency.
The interim financial information for the six months to 30 June 2024 and 30
June 2023 is unaudited and does not constitute statutory financial
information. The comparatives for the full year ended 31 December 2023 are not
the Group's full statutory accounts for that year. The information given for
the year ended 31 December 2023 does not constitute statutory financial
statements as defined by Section 435 of the Companies Act. The statutory
accounts for the year ended 31 December 2023 have been filed with the
Registrar and are available on the Company's web
site www.ascentresources.co.uk (http://www.ascentresources.co.uk) . The
auditors' report on those accounts was unqualified. It did not contain a
statement under Section 498(2)-(3) of the Companies Act 2006.
New Standards adopted as at 1 January 2024
Accounting pronouncements which have become effective from 1 January 2024 do
not have a significant impact on the Group's financial results or position.
New accounting policies adopted for the interim period ended 30 June 2024
Financial assets
All of the Group's recognised financial assets are measured subsequently in
their entirety at either amortised cost or fair value, depending on the
classification of the financial assets.
Convertible loan notes
On issue of a convertible loan, the fair value of the liability component is
determined by discounting the contractual future cash flows using a market
rate for a non-convertible instrument with similar terms. This value is
carried as a liability on the amortised cost basis unless is designated as a
Fair Value Through Profit and Loss ("FVTPL") at inception. Financial
instruments designated as FVTPL are classified in this category irrevocably at
inception and are derecognised when extinguished. They are initially measured
at fair value and transaction costs directly attributable to their
acquisition are recognised immediately in profit or loss. Subsequent changes
in fair values are recognised in the income statement with profit or loss.
Equity instruments are instruments that evidence a residual interest in the
assets of an entity after deducting all of its liabilities. Therefore, when
the initial carrying amount of a compound financial instrument is
allocated to its equity and liability components, the equity component is
assigned the residual amount after deducting from the fair value of the
instrument as a whole the amount separately determined for the liability
component. The value of any derivative features (such as a call option)
embedded in the compound financial instrument other than the equity component
(such as an equity conversion option) is included in the liability component.
The convertible loan note with GNG Partners LLC has been accounted for as a
FVTPL financial instrument in accordance with IFRS 9. For the purposes of the
6-month interim period, management determined the fair value to be the
original loan price as the transaction completed only 2 months before the end
of the period. After determining the fair value at inception, management have
allocated the residual value to the equity component.
Going Concern
The Financial Statements of the Group are prepared on a going concern basis.
On 23 April 2024, the Company raised gross proceeds of approximately $1.7
million (£1.38 million) via an equity fundraise and loan note issue (see note
7). These funds were then used to provide a convertible loan of US$1
million to GNG Partners LLC (see note 5) to acquire the assets of Paradox
Resources LLC. Ascent will collaborate with GNG to potentially provide further
capital over time to accelerate the business into a premium US liquefied
helium producer and distributor. Post period under review, the Company
successfully raised US$1 million (£763k) from a new investor at a price of
2.3 pence per new share, representing a c.43% premium to the closing share
price on the day prior to announcement, with the proceeds to be used to fund
continuing business development as well as general and administrative
expenses.
Based on historical and recent support from new and existing investors the
Board believes that such funding, if and when required, could be obtained
through new debt or equity issuances. However, there can be no guarantee over
the outcome of these options and as a consequence there is a uncertainty
surrounding the Group's ability to raise the necessary finance, which may cast
doubt on the Group's ability to operate as a going concern. Further, the Group
may be unable to realise its assets and discharge its liabilities in the
normal course of business.
Principal Risks and Uncertainties:
The principal risks and uncertainties affecting the business activities of the
Group remain those detailed on pages 17-19 of the Annual Review 2023, a copy
of which is available on the Company's website at www.ascentresources.co.uk
(http://www.ascentresources.co.uk) .
2. Earnings per share
Period ended Period ended
30 June 2024 30 June 2023
£'000s £'000s
Result for the period
Total (loss)/Profit for the period attributable to equity shareholders (1,075) 142
Weighted average number of ordinary shares Number Number
For basic earnings per share 216,554,694 157,084,682
Earnings per share (£) (0.497) 0.09
3. Financial assets at fair value through profit and loss
30 June 2024 31 December 2023
£'000s £'000s
Convertible loan notes receivable 797 -
797 -
On 24 April 2024 the group invested US$1 million (£797k), into GNG Partners
LLC via an unsecured two-year convertible loan note. GNG Partners LLC used
these funds to acquire the assets of Paradox Resources LLC. Other key terms
of the convertible loan notes are as follows:
- Date of maturity of April 2026;
- The notes have a zero-coupon; and
- Converts, at the election of Ascent, into 1 million membership
units of GNG.
The convertible loan note is accounted for at fair value through profit and
loss. Management determined the fair value to be the original loan price as
the transaction completed within close proximity to the end of the period.
4. Intangibles
30 June 2024 31 December 2023
£'000s £'000s
Prepaid abandonment fund - 262
- 262
During the period the prepaid abandonment fund of £262k (EUR 300k) was
impaired to nil as the RJOA was unilaterally terminated by the Geoenergo
administrator who has confirmed EUR 250k was paid to the state abandonment
fund, specifically the Slovenia Eko fund. The remaining EUR 50k is on account
with Geoenergo and forms part of the insolvency estate. Given these proceeds
form part of a wider insolvency estate, there is currently no certainty about
a full recovery of these monies and in accordance with IFRS reporting
standards it has been decided to impair the remainder of the prepaid
abandonment fund.
5. Trade & other receivables
30 June 2024 31 December 2023
£'000s £'000s
Trade receivables - -
VAT recoverable 13 9
Prepaid abandonment liability - 262
Prepaid arrangement fee convertible Loan 60 -
Prepayments & accrued income 315 314
388 585
Less non-current portion - (262)
Current portion 388 323
6. Trade & other payables
30 June 2024 31 December 2023
£'000s £'000s
Trade payables 521 489
Tax and social security payable 57 29
Accruals and deferred income - 44
578 562
7. Borrowings
30 June 2024 31 December 2023
£'000s £'000s
Group
Current
Convertible loan notes 5 5
Borrowings 729 184
Liability at the end of the period 734 189
Convertible loan notes
In April 2024, the Company entered into a $2 million secured fixed coupon loan
facility with RiverFort Global Opportunities ("RiverFort"). Under the
agreement the Company received an initial US$883,000 (£708,992) loan amount
issued on 24 April 2024 (the "Initial Loan"). Further advances will take place
subject to mutual agreement between the Company and RiverFort. The Initial
Loan has a 12-month term, during which it is convertible at a fixed price
of 3.22 pence, being a 40% fixed premium to the issue price. The loan
contained a 7% drawdown fee plus transaction closing costs which were payable
via the issue of 2,962,426 new ordinary shares of 0.5p each in the Company.
The fee will be recognised over the duration of the loan.
The Initial Loan has a 15% fixed coupon attached to it, payable on redemption,
and warrants equal to 33% of the Initial Loan amount exercisable at 140% of
the Issue Price at any time during the next four years. The Loan is secured by
way of a company debenture.
It was agreed the remaining balance of the existing loan with RiverFort would
be forgiven which amounted to £93,383 on the date of the transaction.
The movement in convertible loan is analysed as follows:
30 June 2024
£'000s
At 1 January 2024 -
Principle loan 802
Less historic loan written off (93)
Interest charged on principle 20
At 30 June 2024 729
8. Share capital
30 June 2024 31 December 2023
£'000s £'000s
Authorised
2,000,000,000 ordinary shares of 0.5p each 10,000 10,000
Allotted, called up and fully paid
3,019,648,452 deferred shares of 0.195p each 5,888 5,888
1,737,110,763 deferred shares of 0.09p each 1,563 1,563
109,376,804 ordinary shares of 0.5p each 763 763
13,333,333 ordinary shares of 0.5p each 67 67
42,857,143 ordinary shares of 0.5p each 214 214
24,130,435 ordinary shares of 0.5p each 121 -
678,261 ordinary shares of 0.5p each 3 -
2,962,426 ordinary shares of 0.5p each 15 -
1,743,348 ordinary shares of 0.5p each 8 -
Total 8,642 8,495
Reconciliation of share capital movement Ordinary shares No. Ordinary shares No.
Opening 208,608,491 152,418,015
Issue of shares during the period 29,514,470 56,190,476
Closing 238,122,961 208,608,491
Shares issued during the period
Issuance of equity throughout the period:
· On 13 May 2024, the Company raised total gross new equity
proceeds of £555,000 from the issue of 24,130,435 new ordinary shares at a
placing price of 2.3 pence per share. This included 2,173,913 shares issued to
C4 Energy Limited, a company where Andrew Dennan, James Parsons, and Marco
Fumagalli, each have a 25% beneficial interest.
· Also on 13 May 2024, 678,261 new ordinary shares were issued to
James Parsons at an issue price of 2.3 pence per share.
· As per the new loan agreement with RiverFort Global
Opportunities, 2,962,426 new ordinary shares of 0.5p were issued on 13 May
2024 for the 7% drawdown fee which was payable in shares.
· The Company also issued 1,743,348 new ordinary shares of 0.5p
each in the Company as deal fees to an arranger of the GNG investment
transaction on 13 May 2024.
9. Share based payments
The Company has provided the Directors, certain employees and institutional
investors with share options and warrants ("Options"). Options are
exercisable at a price equal to the closing market price of the Company's
shares on the date of grant. The exercisable period varies and can be up to
seven years once fully vested after which time the option lapses.
Details of the share options outstanding during the year are as follows:
Shares Weighted Average price (pence)
Outstanding at 1 January 2023 7,848,142 50.05
Granted during the year 4,600,000 -
Expired during the year (2,874,138) -
Outstanding at 31 December 2023 9,574,004 50.05
Exercisable at 31 December 2023 8,172,438 41.20
Outstanding at 1 January 2024 9,574,004 50.05
Vesting during the period 666,667 -
Outstanding at 30 June 2024 9,574,004 50.05
Exercisable at 30 June 2024 8,839,105 38.09
Options outstanding at 30 June 2024 have an exercise price of 5p (31 December
2023: 5p) and a weighted average contractual life of 5 years (31 December
2023: 5 years)
On 6 March 2024, the Company's wholly owned subsidiary, Ascent Claim
Entitlement SPV Ltd, issued 6,171,788 options to Directors and certain
employees. The options are exercisable at 0.005p for a period of 20 years
after which time the option lapses.
Details of the share options issued by Ascent Claim Entitlement SPV Ltd and
outstanding during the year are as follows:
Shares Weighted Average price (pence)
Outstanding at 1 January 2024 - -
Granted during the year 6,171,788 -
Expired during the year - -
Outstanding at 30 June 2024 6,171,788 0.005
Exercisable at 30 June 2024 6,171,788 0.005
Details of the warrants issued in the period are as follows:
Issued Exercisable from Expiry date Number outstanding Exercise price
30 January 2024 Anytime until 3 October 2028 45,000,000 5.00p
23 April 2024 Anytime until 23 April 2027 1,017,391 2.30p
23 April 2024 Anytime until 23 April 2028 8,043,478 3.22p
23 April 2024 Anytime until 23 April 2028 11,506,098 3.22p
Details of total warrants outstanding at the end of the period are as
follows:
Warrants Weighted Average price (pence)
Outstanding at 1 January 2024 71,454,595 5.00
Granted during the period 65,566,967 2.3
Exercised during the period - -
Expired during the period - -
Outstanding at 30 June 2024 137,021,562 5.00
Exercisable at 30 June 2024 137,021,562 5.00
The warrants outstanding at the period end have a weighted average remaining
contractual life of 1.54 years. The exercise prices of the warrants are
between 4.00 - 7.50p per share.
10. Events after the reporting period
Post period under review, the Company successfully raised US$1 million
(£763k) from a new investor at a price of 2.3 pence per new share,
representing a c.43% premium to the closing share price on the day prior to
announcement, with the proceeds to be used to fund continuing business
development as well as general and administrative expenses.
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