Ascent Resources PLC Permitting update (1797C)
June 14 2019 - 1:00AM
UK Regulatory
TIDMAST
RNS Number : 1797C
Ascent Resources PLC
14 June 2019
Ascent Resources plc / Epic: AST / Index: AIM / Sector: Oil and
Gas
14 June 2019
Ascent Resources plc
("Ascent" or the "Company")
Permitting update
Ascent Resources plc, the European focused oil & gas
exploration and production company, provides the following update
in relation to the well permits in Slovenia.
Appeal to the Administrative Court in Slovenia
The official response from the Ministry of the Environment has
now been received by lawyers representing the joint venture. The
decision is being studied in detail and a robust response to this
manifestly wrong decision contrary to EU law will be submitted in
advance of the deadline on 15 July 2019. This appeal will be heard
by the Administrative Court in Slovenia.
Litigation in Slovenia for damages arising from breaches of
Slovene and EU Law
The Company will also submit a claim for damages against the
Republic of Slovenia for breach of EU law including for the
unreasonably long time it took for the decision to be reached.
The decision of ARSO and the Environment Ministry ignores the
opinion of the six independent expert bodies whose advice ARSO
sought. In breach of EU law, the decision also mistakenly concluded
that the project fell within a conservation area and misapplied EU
case law in relation to mitigation measures.
The application was submitted in May 2017 and ARSO made its
ruling in March 2019. Under Slovene law, decisions on Preliminary
Screening applications must be taken within 2 months, Slovenia is
in breach of Slovenian Law. Furthermore, under EU law, decisions on
Preliminary Screening applications must be taken within 90 days,
therefore Slovenia is in breach of EU law.
The Company will be seeking damages for loss of future income
from the project which would have been expected to have been a
multiple of the historic investment of some EUR50 million.
Arbitration claims for damages under the Energy Charter
The Company has been working with legal experts for some months
now developing an Investment Treaty Arbitration claim under the
Energy Charter Treaty.
It was the strong desire of the Board to avoid such litigation
and obtain the permits necessary to develop the field which it was
legally entitled to. As it has now become apparent that the
possibility of achieving these goals has significantly diminished,
the Company will move ahead with filing this claim.
Funding legal action
The level of the claim for damages will mean any legal action
will be costly. Over the past months, the board has developed
relationships with specialist litigation funding partners. We will
now seek to conclude an arrangement to finance legal claims in the
least dilutive manner possible.
Communication of the decision
It is deeply disappointing that a decision of this significance
was not communicated directly to the partners before it was
published on a government website and reported in the Slovenian
media. In the view of the board this demonstrates a lack of respect
to a foreign investor who has invested more than EUR50 million in
the project over its twelve years of operations in the country. The
dissemination of market sensitive information without first
informing the Company should be unsettling for all public companies
invested in Slovenia.
Actions by the Company
The focus in Slovenia now inevitably shifts away from the
development of the Petišovci Project towards obtaining legal
redress for the damages inflicted on shareholders by the actions of
the government. As a result, we will consider a wide range of
measures to reduce our operating costs to the minimum
necessary.
At a PLC level we will be reducing costs including directors'
remuneration from the end of June 2019.
Future direction
The strategy of the Company remains to maximise the value of its
Slovenian asset while seeking to grow the Company in the
region.
We will seek to realise value for our Slovenian asset, by
aggressively pursuing claims for damages in all available
jurisdictions to the fullest extent of the law.
At the same time the Company continues to pursue other
opportunities in the region in jurisdictions with established oil
& gas industries and a developed regulatory system.
Colin Hutchinson, CEO of Ascent Resources plc, commented:
"The decision of the Environment Ministry is deeply damaging to
the project and to the interests of Slovenia, we will seek to
obtain full redress for shareholders through local and
international courts."
Ascent Resources plc
Colin Hutchinson, CEO / John Buggenhagen,
COO / Cameron Davies, Chairman 0207 251 4905
WH Ireland, Nominated Adviser & Broker
James Joyce / Chris Savidge 0207 220 1666
SP Angel, Joint Broker
Richard Redmayne / Richard Hail 0203 470 0470
Yellow Jersey, Financial PR and IR
Tim Thompson / Harriet Jackson / Henry Wilkinson 0203 004 9512
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END
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