REG - Ascent Resources PLC - Interim Results
28/09/2023 07:00
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RNS Number : 9078N Ascent Resources PLC 28 September 2023
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.
28 September 2023
FOR IMMEDIATE RELEASE
Ascent Resources plc
("Ascent" or "the Company")
Interim results for the period ended 30 June 2023
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 2023 (the "Period" or "H1 2023").
Highlights:
· Partial settlement of dispute with JV partner, relating to
production of hydrocarbons from the Pg-10 and Pg-11A wells for the period
January 2022 through to February 2023, resulting in recognition of
€1,724,689 revenue for the corresponding period.
· Arbitration hearing took place in June, for the Company's
continuing dispute with JV partner, relating to the parties' different
interpretations of the RJOA with regard to treatment of hydrocarbons produced
above the baseline production profile while Ascent is still in a cost recovery
position.
· Settlement of long standing dispute with JV service provider at
an approximate discount of 30% to the amounts being claimed.
· Restructuring of the continuing service agreement commercial
terms, resulting in an approximate 55% reduction to the prior costs ahead of
the prior concession expiry date of November 2023.
· Submission of an application to receive automatic 30 month
concession extension submitted by the concession holder, which is expected to
extend concession expiry date through to at least May 2026.
· Constitution of the arbitration tribunal panel in relation to the
Company's significant Energy Charter Treaty monetary damages claim against the
Republic of Slovenia.
· Raised £0.4m before expenses by way of a subscription and
placement with existing and new investors.
Post Period end highlights:
· Filing of upgraded €656.5 million Energy Charter Treaty
memorial, supported by independent technical oil and gas as well as financial
damage quantum experts, setting out the claimants position, merits and
jurisdiction for its claim.
· Contracted an after the event insurance policy in relation to the
Company's €656.5 million ECT damages claim.
Enquiries:
Ascent Resources plc Via Vigo Consulting
Andrew Dennan, CEO
WH Ireland, Nominated Adviser & Broker 0207 220 1666
James Joyce / Sarah Mather
Novum Securities, Joint Broker 0207 399 9400
John Belliss
Chairman and CEO's statement
The first half of the year (the "Period" or "H1 2023") has seen the Company
continue to take strides as it defends its investment and working interests in
Slovenia. The Company has successfully resolved a long-standing dispute, which
commenced in 2019, with its joint venture ("JV") service provider, Petrol Geo,
at a circa 30% discount to the amounts claimed to be owed. As well as
successfully restructuring the costs of the continuing service provider
contract at a discount of approximately 55% to the prior amounts being
charged. The Company successfully resolved part of its disputes with its JV
partner, Geoenergo, relating to hydrocarbon production proceeds owed to the
Company pursuant to the JV contract (the "RJOA"), resulting in the Group
successfully recognising €1,724,689 in hydrocarbon proceeds from the PG-10
and PG-11A wells produced in the period January 2022 through to February 2023.
The Company continues to pursue its arbitration claim against Geoenergo in
relation to the parties' different interpretations of the RJOA relating to the
distribution of hydrocarbon proceeds produced above the contractual baseline
production profile whilst Ascent is in a preferential recovery position. The
arbitration hearing took place in June 2023 and the Company is awaiting its
outcome.
During the Period, the Tribunal was constituted for the Company's Energy
Charter Treaty ("ECT") damages claim against the Republic of Slovenia.
Accordingly, the Company has been working with its legal representatives, Enyo
Law LLP, to prepare its ECT memorial, which was submitted post the Period
under review. As part of the work to finalise the memorial, independent
technical oil & gas as well as financial damage quantum experts were
commissioned to provide their analysis on the Company's claim and estimated an
updated claim damages number of €656.5 million. It should be cautioned that
in the event the Company is successful in its claim any amount actually
received by the Company may be significantly lower.
Gas production at the Petisovci project in Slovenia has continued through the
Period with 645,140 scm produced by the PG-10 and PG-11A wells. However, the
European gas market has softened through the Period. The JV Partner (who is
also the concession holder) submitted a concession extension application ahead
of the deadline, which was then superseded by law changes in Slovenia which
give mining right owners with concessions expiring in the next 18 months an
automatic 30-month extension to their current concession expiry date (as a
result of the administrative backlog resulting from the COVID-19 pandemic),
subject to the concession holders filing a request within 30 days. The JV
Partner filed the necessary application to receive the 30-month extension
ahead of the deadline. Accordingly, the Company expects the concession expiry
date to be in May 2026.
The Company is seeking to execute on its first ESG Metals deal in the second
half of the year. Our vision remains, by the end of 2023, to have finalised
this transformation of Ascent such that the Company has both sustainable cash
flow generation from its operations and compelling upside exposure to both
near term €3+ million partner arbitration claim as well as medium term
€656.5 million ECT damages claim against the Republic of Slovenia (it should
be cautioned that in the event the Company is successful in its claim any
amount actually received by the Company may be significantly lower than the
amount sought), underpinned by a new ESG compatible metals strategy in an
exciting, growth focused, part of the world.
We thank our shareholders for their support and look forward to achieving
success together.
Slovenia Energy Charter Treaty Arbitration Claim
In September 2022 Ascent Resources Plc and its wholly owned subsidiary, Ascent
Slovenia Limited, (together the "Claimants") registered an Energy Charter
Treaty ("ECT") damages claim against the Republic of Slovenia relating to a
number of certain actions taken by Slovenia and its administrative functions,
against the Claimants, which culminated in the expropriation of the Claimant's
investments in Slovenia by sudden changes to the country's mining legislation,
implemented in May 2022, which prohibit the use of stimulation as a method to
explore for or produce hydrocarbons. Given that the Petišovci project is a
tight gas development which requires the use of stimulation to produce the
tight gas, these actions have expropriated the full investment value of the
Claimants investments in country, which are in breach of the duties owned by
Slovenia to the Claimants as protected investors.
During the Period the Claimants and Enyo Law LLP (the Company's appointed
specialist litigation and arbitration lawyers) have been working alongside
independent experts in the fields of geology and oil and gas developments, as
well as specialist independent quantum analysis experts to prepare the
memorial which sets out the Claimants position, merits and jurisdiction for
the claim. This lengthy document was successfully completed and filed in July
2023, post the Period-end, and estimated a revised claim damages amount of
€656.5 million.
The Claimants arbitration dispute with the Republic of Slovenia is
administered by the International Centre for Settlement of Investment
Disputes ("ICSID"). The request for arbitration follows the Notices of
Dispute filed by Ascent Resources Plc and Ascent Slovenia Ltd on 23 July
2020 and 5 May 2022 respectively in which Slovenia was formally notified
of the existence of a dispute under the ECT. The Request for Arbitration
("Request") was submitted pursuant to Article 26 of the ECT and was
successfully registered with ICSID under the ECT on 1 September 2022. The
Company appointed Mr Klaus Reichert (German/Irish) as its arbitrator in
November 2022. In December 2022, Slovenia appointed Ms Brigitte Stern, a
French professor. During the Period, Dr Raed Fathallah (Canadian, French,
Lebanese) was appointed as president arbitrator and, accordingly, on 7 March
2023, the Tribunal was constituted in accordance with Article 37(2)(a) of the
ICSID Convention. Following a first procedural session in April 2023, the case
continued to progress through the arbitration process. It should be cautioned
that in the event the Company is successful in its claim any amount actually
received by the Company may be significantly lower than the amount sought.
The Company remains amenable to discussing settlement with the Republic of
Slovenia following its review of the matter or otherwise pursuing its
significant damages claim through to a binding result for the Claimants and
their stakeholders.
Slovenia Operations Update
The PG-10 and PG-11A wells continue to produce gas with a 1H monthly average
production of 107,000 SCM/month which is currently being sold to local
industrial buyers via the low-pressure pipeline. Through the Period, the
Company achieved success in its dispute mediation process with the JV service
provider, Petrol Geo, in regards to their claim for payment of €2,083,491
(plus interest and costs) relating to costs and invoices which Ascent has been
rejecting on the basis of a significant change in circumstances. The Company
successfully agreed to resolve the dispute by agreeing a full and final
payment of €1,436,000 to settle all claimed amounts, representing a discount
of approximately 30% to the amount being claimed. Additionally, the Company
successfully renegotiated the continuing service provider contract to reduce
the fixed service charge down from €44,000 per month to the higher of i)
€20,000 a month (a discount of circa 55% to the amounts previously agreed);
or ii) 35% of Ascent's entitlement to proceeds from the PG-10 and PG-11A
wells. This structure seeks to mitigate the losses made by the project. In
tandem with this resolution to the claim against the JV, the Company was also
successful in achieving a partial resolution to its Slovenia domestic
arbitration dispute process against Geoenergo which was instigated in December
2022, with an agreement during the period under review that saw Ascent
recognise payment of €1,724,689 for hydrocarbons sales from the PG-10 and
PG-11A wells for the period January 2022 through to February 2023. Following
settlement of the amounts agreed to be paid to Petrol Geo, the Company
successfully received net proceeds of €288,689 in cash. However, the
arbitration process continues with the Company seeking an answer to the JV
partners different interpretations of the RJOA relating to the distribution of
the economics of hydrocarbon production proceeds generated above the RJOA
contractual baseline production profile from all the wells on the concession
area (as opposed to just PG-10 and PG-11A). The Company is seeking entitlement
to 90% of the proceeds from this delta whilst it is in a preferential cost
recovery position (i.e. until it has earned/received its investment of €50+
million back). The hearing was held in June 2023 and the result is expected in
due course. The Company currently estimates the amount it is entitled to,
limited by the three-year statutory deadline, could be in excess of €3
million.
During the Period, the JV partner and concession holder, Geoenergo, filed an
application to extend the term of the concession which was due to expire in
November 2023. This application was then superseded by law changes implemented
in Slovenia which have afforded mineral right owners with concessions due to
expire in the next 18 months with the option of an automatic 30-month
extension, designed to ease the administrative backlog in the ministry as a
result of COVID-19 pandemic. The Company was notified by Geoenergo that the
requisite request for the 30-month extension was submitted ahead of the
deadline. The Company now expects the concession expiry date will be 28 May
2026.
ESG Metals Strategy
The Company remains very focused on executing on its new ESG Metals growth
strategy with an initial focus on Latin America, where the Company has
selected Peru and Chile as ideal candidates to execute our growth strategy.
Peru is widely recognised as one of the largest and most diversified mineral
producers with some of the most extensive reserves in the world with mining
the most important sector in the Peruvian economy (some 10% of national GDP).
Peru is currently the world's second largest Copper, Silver and Zinc producer
and Latin America's largest Gold, Zinc, Tin and Lead producer. Peru's
Long-Term Credit Rating is rated as BBB by most agencies, which is amongst the
strongest in the region. The country also benefits from a long history of
mining, a robust mining legal framework and a significant pool of local
expertise. Similarly, a lot of these traits are shared by neighbouring Chile,
which is the world's largest Copper producer and has a long history or mining
and mineral processing giving rise to large accumulations of surface
stockpiled materials consistent with the Company's ESG Metals strategy.
The Company sees significant opportunity for attractive entry points in mining
following the global pandemic which has triggered international capital flight
and significant capital constraints for small-scale miners. The Company
therefore initially expects to focus its attention on small-scale operations
(up to 350 tpd), which the Company considers affordable, of an efficient
operational and commercial scale and which have multiple local operating and
permitting benefits. The Company is actively developing a number of potential
transactions in the gold tailing re-processing and artisanal gold ore
processing theme, however given the political disruption in Peru towards the
end of 2022 and beginning of 2023, the Company expects its first transaction
in ESG Metals may be in a neighbouring territory, with the expectation that a
new country entry to Peru focused on precious metals would still materialise
in the Company's near future.
Corporate
In February 2023, the Company signed strategic collaboration agreements with
Beryl International Pty, a South African based diversified investment Company,
who were seeking to make a strategic investment of £1 million in the Company
at a premium to the prevailing market share price, alongside appointing a new
non-executive director to the Board. However, after the announcement of the
proposed transaction, South Africa was added to the Financial Action Task
Force grey list which resulted in significant delays for Beryl to complete the
capitalisation of their new international subsidiary set up for the purpose of
the proposed investment. Accordingly, after extending the long stop date and
Beryl's second failure to complete settlement of its obligations, the Company
terminated the proposed transaction. In April 2023 the Company successfully
raised £0.4 million in new equity proceeds at a price of 3 pence per new
share, being the spot price at the close on the preceding day ahead of
announcement. Each new share was also issued with one new warrant exercisable
at 5 pence per new share at any time in the next two years.
In June 2023 the Company announced an intention to bid for Amur Minerals Plc,
having been in discussions with the Amur board around a concept of merging
their cash resource post payment of their special dividend with Ascent's
business development inventory in Latin America, to combine and execute on a
joint strategy focused on metals processing and reprocessing businesses which
expose shareholders to precious and battery metals and have a pathway toward
cashflows within 6 months to three years. However, post the Period-end,
discussion were terminated.
Outlook
The Company remains focused on preserving value and defending its investments
and working interests in Slovenia. Shareholders are exposed to a near term
domestic arbitration result relating to the Company's claims to an estimated
€3+ million in additional revenue from all the wells in the concession area,
in addition to the PG-10 and PG-11A revenues received as a result of the
partial resolution of the partner dispute. During the Period, the Tribunal was
constituted for the Company's ECT damages claim against Slovenia and post the
Period-end the Company filed its ECT claim memorial for an upgraded €656.5
million, independently estimated, damages claim (It should be cautioned that
in the event the Company is successful in its claim any amount actually
received by the Company may be significantly lower than the amount sought).
Following clarity on the near-term live items the Company expects to be well
positioned to execute on its maiden ESG Metals deal in Latin America.
James Parsons
Andrew Dennan
Executive Chairman
Chief Executive Officer
27 September 2023
27 September 2023
CEO's report
Financial performance
Revenue for H1 2023 was £1.36m (H1 2022: nil and FY22: £581,000). In April
2023 the Company successfully resolved part of its disputes with its JV
partner, Geoenergo, relating to hydrocarbon production proceeds owed to the
Company from the PG-10 and PG-11A wells for the period January 2022 through to
February 2023. Furthermore, at the same time the Company fully resolved all
outstanding claims with the JV service provider, Petrol Geo, over all disputed
and rejected invoices claimed since 2019 to February 2023 resulting in cost of
sales for H1 2023 of £456,000 (H1 2022: nil and FY22 £504,000).
The closing cash balance at 30 June 2023 was £242,000 (H1 2022: £174,000 and
FY22: £325,000). During the Period the Company agreed invoices and received
payment for historic revenues from the PG-10 and PG-11A wells for the period
of January 2022 through to February 2023. Accordingly, the Company expects to
recognise historic production revenues as well as associated production costs
in its next annual accounts. During the Period the Company also began
receiving monthly revenues from continuing production from the PG-10 and
PG-11A wells as well as paying monthly production costs.
During the Period the Company raised £400,000 before costs in an equity
placing in April 2023. There was a cash outflow from operations of £455,000
and an inflow of £371,000 from financing, resulting in net cash outflow of
£83,000.
Operational performance
Jan Feb Mar Apr May Jun
Production KPI's 2023 2023 2023 2023 2023 2023
Total gas (k scm) 116.42 99.39 124.26 105.43 105.15 94.49
Total gas (MMcf) 4.11 3.51 4.39 3.72 3.71 3.34
Average daily gas (k scm) 3.76 3.55 4.01 3.51 3.39 3.15
Average daily gas (Mcf) 132.61 125.34 141.54 124.09 119.77 111.21
Total condensate (litres) 4,300 4,300 3,900 2,800 2,400 4,500
CGR (litres per 1000 scm gas) 36.94 43.26 31.39 26.56 22.82 47.62
BOE - gas 794.82 678.55 848.34 719.79 717.87 645.10
BOE - condensate 27.04 27.04 24.53 17.61 15.09 28.30
Total BOE 821.86 705.59 872.87 737.40 732.97 673.40
Total production for the Period was 645.10 thousand cubic metres of gas and
22,200 litres of condensate.
Gas sales to INA remain suspended as wellhead pressure is below the export
pipeline pressure, which is not expected to be remedied following the
Slovenian ban which includes the prohibition of low volume hydraulic
stimulation. The Company produced gas in the year to date which was sold
locally to an industrial buyer through a low-pressure pipeline. In April 2023,
the Company agreed invoices and began receiving payment for historic revenues
from the PG-10 and PG-11A wells for the period of January 2022 through to
February 2023 and as such, the Company has recognised historic and 2023
production revenues as well as associated production costs.
Consolidated Income Statement
for the Period ended 30 June 2023
Period ended Period ended
30 June 2023 30 June 2022
Notes £'000s £'000s
Revenue 1,360 -
Cost of sales (456) -
Depreciation of oil & gas assets (1) (122)
Gross Profit 903 (122)
Administrative expenses (723) (539)
Profit (Loss) from operating activities 180 (661)
Finance income - -
Finance cost (38) (1)
Net finance costs (38) (1)
Profit (Loss) before taxation 2 142 (662)
Income tax expense - -
Profit (Loss) for the period after tax 142 (662)
Profit (Loss) for the period attributable to equity shareholders 142 (662)
Earnings per share
Basic & fully diluted profit / (loss) per share (£) 3 0.09 (0.005)
Consolidated Statement of Comprehensive Income
for the Period ended 30 June 2023
Period ended Period ended
30 June 2023 30 June 2022
Notes £'000s £'000s
Proft / (loss) for the period 142 (662)
Other comprehensive income
Foreign currency translation differences for foreign operations 16 599
Total comprehensive gain / (loss) for the period 158 (63)
Consolidated Statement of Financial Position
As at 30 June 2023
30 June 31 December
2023 2022
Notes £'000s £'000s
Assets
Non-current assets
Property, plant and equipment 4 3 4
Exploration and evaluation costs 4 - -
Goodwill - -
Prepaid abandonment fund 292 300
Total non-current assets 295 304
Current assets
Inventory - -
Trade and other receivables 5 113 11
Cash and cash equivalents 242 325
Total current assets 355 336
Total assets 650 640
Equity and liabilities
Attributable to the equity holders of the Parent Company
Share capital 9 8,280 8,214
Share premium account 76,603 76,298
Merger reserve 570 570
Share-based payment reserve 2,133 2,131
Translation reserves (260) (276)
Retained earnings (88,315) (88,457)
Total equity attributable to the shareholders (989) (1,520)
Total equity (989) (1,520)
Non-current liabilities
Borrowings 7 553 516
Provisions 646 663
Total non-current liabilities 1,199 1,179
Current liabilities
Borrowings 7 5 5
Contingent consideration due on acquisitions 8 - -
Trade and other payables 6 435 976
Total current liabilities 440 981
Total liabilities 1,639 2,160
Total equity and liabilities 650 640
Consolidated Statement of Changes in Equity
for the period ended 30 June 2023
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 2022 7,998 75,021 570 2,129 (594) (46,566) 38,558
Comprehensive income
Loss for the period - - - - - (662) (662)
Other comprehensive income
Currency translation differences - - - - 599 - 599
Total comprehensive income - - - - 599 (662) (63)
Transactions with owners
Issue of shares during the year net of costs 131 731 - - - - 862
Share-based payments - - - - - - -
Balance at 30 June 2022 8,129 75,752 570 2,129 5 47,228 39,357
Balance at 1 January 2022 7,998 75,021 570 2,129 (594) (46,566) 38,558
Comprehensive income
Loss for the period - - - - - (41,891) (41,891)
Other comprehensive income
Currency translation differences - - - - 318 - 318
Total comprehensive income - - - - 318 (41,891) (41,573)
Transactions with owners
Issue of ordinary shares 216 1,366 - - - - 1,582
Costs related to share issues - (89) - - - - (89)
Share-based payments - - - 2 - - 2
Balance at 31 December 2022 8,214 76,298 570 2,131 (276) (88,457) (1,520)
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
Balance at 30 June 2023 8,280 76,603 570 2,133 (260) (88,315) (989)
Consolidated Statement of Cash Flows
for the six months ended 30 June 2023
Period ended Period ended
30 June 2023 30 June 2022
£'000s £'000s
Cash flows from operations
Profit / (loss) after tax for the period 142 (662)
Depreciation (1) 122
Change in receivables (102) (35)
Change in payables (542) (179)
Increase in share-based payments 2 35
Exchange differences 9 -
Finance cost - -
Net cash used in operating activities (492) (719)
Cash flows from investing activities
Payments for fixed assets - -
Payments for investing in exploration - (1)
Net cash used in investing activities - (1)
Cash flows from financing activities
Interest paid and other finance fees 38 -
Loans repaid - -
Proceeds from borrowings - -
Proceeds from issue of shares 400 842
Share issue costs (29) (45)
Net cash generated from financing activities 409 797
Net increase in cash and cash equivalents for the year (83) 77
Effect of foreign exchange differences - -
Cash and cash equivalents at beginning of the year 325 97
Cash and cash equivalents at the end of the year 242 174
Notes to the Interim Financial Statements
for the six months ended 30 June 2023
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 2023 comprise the Company and its subsidiaries (together referred
to as the 'Group').
Basis of preparation
The interim financial statements have been prepared using measurement and
recognition criteria based on International Financial Reporting Standards
(IFRS and IFRIC interpretations) issued by the International Accounting
Standards Board (IASB) as adopted for use in the EU. 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
2022.
New Standards adopted as at 1 January 2023
Accounting pronouncements which have become effective from 1 January 2023 are:
· IFRS 3 - Business Combinations
· IAS 16 - Property, Plant and Equipment
· IAS 37 - Provisions, Contingent Liabilities and Contingent Assets
These accounting pronouncements do not have a significant impact on the
Group's financial results or position.
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 2023 and 30
June 2022 is unaudited and does not constitute statutory financial
information. The comparatives for the full year ended 31 December 2022 are not
the Group's full statutory accounts for that year. The information given for
the year ended 31 December 2022 does not constitute statutory financial
statements as defined by Section 435 of the Companies Act. The statutory
accounts for the year ended 31 December 2022 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.
Going Concern
The Financial Statements of the Group are prepared on a going concern basis.
On 4 April 2023, the Company completed a £0.4 million subscription. These
funds were used for working capital and project costs during the reporting
period. In April 2023, the Company received a payment of €289,000 being
€1,724,689 of hydrocarbon revenues for the period January 2022 to February
2023 less associated historic costs since 2019 through to February 2023 of
€1,436,000. However, the Company may require further funding over the next
twelve months to cover Slovenian operations and discretionary spend incurred
with executing on the ESG Metals Strategy.
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 material
uncertainty of 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 11-12 of the Annual Review 2020, a copy
of which is available on the Company's website at www.ascentresources.co.uk
(http://www.ascentresources.co.uk) .
2. Operating Profit / loss is stated after charging
Period ended Period ended
30 June 2023 30 June 2022
£'000s £'000s
Employee costs 441 363
Share based payment charge 2 -
Included within Administrative Expenses
Audit fees - 9
Fees payable to the Company's auditor for other services - -
- 9
3. Earnings per share
Period ended Period ended
30 June 2023 30 June 2022
£'000s £'000s
Result for the period
Total profit / (loss) for the period attributable to equity shareholders 142 (662)
Weighted average number of ordinary shares Number Number
For basic earnings per share 157,084,682 128,149,204
Earnings per share (£) 0.09 (0.005)
4. Property, plant & equipment and Exploration and Evaluation assets
Computer Developed Oil Total Property Exploration &
Equipment & Gas Assets Plant & Evaluation
Equipment
£'000s £'000s £'000s £'000s
Cost
At 1 January 2022 11 22,963 22,974 18,463
Additions 1 - 1 -
Effect of exchange rate movements - 573 573 113
At 30 June 2022 12 23,536 23,548 18,576
At 1 January 2022 11 22,963 22,974 18,463
Additions 1 - 1 -
Effect of exchange rate movements - 1,203 1,203 357
At 31 December 2022 12 24,166 24,178 18,820
At 1 January 2023 12 24,166 24,178 18,820
Additions - - - -
Effect of exchange rate movements - - - -
At 30 June 2023 12 24,166 23,178 18,820
Depreciation
At 1 January 2022 (6) (1,857) (1,863) -
Charge for the year (3) (121) (124) -
Effect of exchange rate movements - (49) (49) -
At 30 June 2022 (9) (2,027) (2,036) -
At 1 January 2022 (6) (1,857) (1,863) -
Charge for the year (2) (212) (214) -
Impairment - (21,193) (21,193) 18,820)
Effect of exchange rate movements - (904) (904) -
At 31 December 2022 (8) (24,166) (24,178) (18,820)
At 1 January 2023 (8) (24,166) (24,178) (18,820)
Charge for the year (1) - (1) -
Effect of exchange rate movements - - - -
At 30 June 2023 (9) (24,166) (24,178) (18,820)
Carrying Value
At 30 June 2023 3 - 3 -
At 31 December 2022 4 - 4 -
At 30 June 2022 3 21,509 21,512 18,576
In April 2022, the Republic of Slovenia approved amendments to its Mining Law
which include a total ban on hydraulic stimulation. Consequently, the
operational and development review conducted by the Company determined that
further field development was not economically viable and that the current
producing wells had a remaining production life of approximately 5.5 years. As
such in 2022 the Company fully impaired all Developed Oil and Gas Assets as
well all Exploration and Evaluation assets. Details of the impairment
judgments and estimates in the fair value less cost to develop assessment is
set out in Note 1 of the statutory accounts for the year ended 31 December
2022 and is available on the Company's website www.ascentresources.co.uk
(http://www.ascentresources.co.uk) . The auditors' report on those accounts
was unqualified.
5. Trade & other receivables
30 June 2023 31 December 2022
£'000s £'000s
Trade receivables - -
VAT recoverable 17 73
Prepaid abandonment liability 292 300
Prepayments & accrued income 96 (30)
405 343
Less non-current portion (292) (300)
Current portion 113 43
6. Trade & other payables
30 June 2023 31 December 2022
£'000s £'000s
Trade payables 387 525
Tax and social security payable 46 47
Other payables 2 -
Accruals and deferred income - 20
435 592
7. Borrowings
30 June 2023 31 December 2022
£'000s £'000s
Group
Non-current
Convertible loan notes 553 536
553 536
30 June 2023 31 December 2022
£'000s £'000s
Group
Current
Convertible loan notes 5 5
Borrowings - -
Liability at the end of the period 5 5
In December 2022, the Company reprofiled its outstanding debt with Riverfort
Global Opportunities repaying £50,000 of the total outstanding obligations of
£561,620, with £25,000 in cash plus £25,000 satisfied with the issue of
625,000 new shares. The remaining balance of £511,620 was 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.
8. Contingent consideration due on acquisitions
30 June 2023 31 December 2022
£'000s £'000s
Group
Non-current
Ascent Hispanic Resources UK Limited - 450
- 450
The contingent consideration is based on the defined contingent consideration
in the acquisition of Ascent Hispanic Limited (Formerly Energetical Limited),
comprising £100,000 in cash and a further £350,000 in shares. The Company
has not discounted the contingent consideration since the impact would not be
material. The Company took to decision to cease evaluating assets in Cuba on
15 August 2022 and as such write down the value of the contingent
consideration in full.
9. Share capital
30 June 2023 31 December 2022
£'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
165,751,348 ordinary shares of 0.5p each (2022: 135,560,515 ordinary shares of 829 547
0.5p each)
8,280 8,129
Reconciliation of share capital movement Ordinary shares No. Ordinary shares No.
Opening 152,418,051 109,376,804
Issue of shares during the year 13,333,333 43,041,211
Closing 165,751,348 152,418,051
The deferred shares have no voting rights and are not eligible for dividends.
Shares issued during the year
Issuance of equity throughout the year:
· On 4 April 2023, the Company raised total gross new equity
proceeds of £0.4 million from the issue of 13,333,333 new ordinary shares at
a placing price of 3 pence per share.
10. 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 2022 7,348,142 253.72
Outstanding at 31 December 2022 7,848,142 253.72
Exercisable at 31 December 2022 1,450,763 248.72
Outstanding at 1 January 2023 7,348,142 253.72
Granted during the year -
Outstanding at 30 June 2023 7,348,142 253.72
Exercisable at 30 June 2023 7,348,142 248.72
Options outstanding at 30 June 2023 have an exercise price in the range of
2.9p and 778p and a weighted average contractual life of 4 years.
Details of the warrants issued in the period are as follows:
Issued Exercisable from Expiry date Number outstanding Exercise price
4 April 2023 Anytime until 3 April 2025 13,333,333 5.00p
Details of total warrants outstanding at the end of the period are as
follows:
Warrants Weighted Average price (pence)
Outstanding at 1 January 2023 58,121,262 5.00
Granted during the period 13,333,333 5.00
Exercised during the period - -
Expired during the period - -
Outstanding at 30 June 2023 71,454,595 5.00
Exercisable at 30 June 2023 71,454,595 5.00
The warrants outstanding at the period end have a weighted average remaining
contractual life of 2.1 years. The exercise prices of the warrants are between
4.00 - 7.50p per share.
11. Events after the reporting period
On 21 July 2023 Enyo Law LLP filed on behalf of the Claimants, the arbitration
memorial. This memorial is a lengthy document, which includes the narrative
and legal reasoning underpinning its claim, as well as witness statements from
key individuals and independent third party technical and quantum expert
reports.
On 22 September 2023 the Company secured an after the event ("ATE") insurance
policy in relation to the Company's €656.5 million Energy Charter Treaty
damages claim against the Republic of Slovenia.
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