TIDMAST
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 GBP0.6 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 GBP0.6
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
GBP0.6 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 GBP49,300.
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 GBP270,000 plus the 8 per cent. coupon
which was previously due to mature on 31 December 2022 as well as
the GBP270,020 which was due for repayment in six monthly cash
instalments of GBP45,003 per month commencing in mid-February
through to July 2023 (as announced 24 December 2021). Ascent has
agreed to repay GBP50,000 of the total outstanding payment
obligations of GBP561,620, with GBP25,000 in cash plus GBP25,000
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 GBP511,620 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 GBP92,091.60 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 EUR500+ 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 EUR140/MWh and Q1 2023
futures at circa EUR134/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 EUR50+ 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 EUR185,000, 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 EUR 857,617 plus further amounts invoiced by
ASL for July 2022 through to October 2022 of EUR470,626 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
EUR4 million.
As part of the LAC arbitration process, the parties must pay the
arbitration fees of EUR175,057 (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 EUR 235 k relating
to services accepted as provided in 2019 and other rejected and
disputed amounts of circa EUR 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
James Joyce / Sarah Mather 0207 220 1666
Novum Securities, Joint Broker
Jon Belliss 0207 399 9400
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END
IOEURAARUAUAOUA
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