Corporate Update

RNS Number : 9418M

Ascent Resources PLC

14 January 2019

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Ascent Resources plc

("Ascent" or the "Company")

Corporate Update

Ascent Resources plc, the AIM listed oil and gas exploration and production company focused on Slovenia and Central Europe, is pleased to provide the following update on the strategic direction of the company, current operations in Slovenia and changes to the Board and management of the Company.

Strategic direction of the Company

The Company's focus for many years has been to develop its high-potential Petišovci project in north-eastern Slovenia. However, since successfully commencing export production in November 2017, the Company has been unable to build on this achievement and develop the project as planned due to permitting issues. 

During 2018 the Company carried out an extensive strategic review process where the project was marketed widely to potential partners. Despite a significant level of interest from well qualified parties, the process was frustrated, in a large part, by the uncertainties created by the Slovenian permitting system.

Accordingly, the Board of Ascent has resumed its previous strategy to expand its interests beyond Slovenia while continuing to focus on a way forward to develop the significant reserves at Petišovci.  This expansion is focused on new projects in the region, with well-developed oil & gas infrastructure, a proven working petroleum system and an established regulatory and legal framework that will allow Ascent to deliver real growth to its shareholders.

The Company will concentrate on opportunities that offer near-term drilling and production or where there is scope to unlock material reserves through appraisal drilling.

Management & Board changes

This change of direction provides an opportunity to refresh the composition of the management team and the Board.  Accordingly, the Company today announces the following changes designed to quickly progress our strategy outside of Slovenia and to better equip the Company to execute its field development plan at Petišovci when the permits are in place.

Management

Colin Hutchinson, Chief Executive Officer, recently working on a part-time basis, has resumed a full-time focus on Ascent.

The Company has appointed John Buggenhagen as Chief Operating Officer (non-board position).  John is an experienced and dynamic geophysicist with 20 years' working knowledge of the industry. He was the CEO of Palomar Natural Resources, a Polish focussed E&P Company.  Prior to that John was Director of Exploration for San Leon Energy in London, and Exploration Manager Europe for Aspect Energy/Hungarian Horizon. He holds a bachelor's degree in geophysics from the University of Arizona, a master's degree in geophysics from the University of Wyoming, and a Ph.D. in geophysics also from the University of Wyoming.

Non-executive directors

Clive Carver, Non-executive Chairman, has resigned from the board, and Nigel Moore, non-executive Director has informed the Company of his decision to retire once a suitable replacement has been appointed.

Towards the end of last year Clive Carver, non-executive chairman since March 2013, indicated his intention to resign from the Board to focus on his other directorships and to provide the opportunity for new blood to be introduced to take the Company forward.  Clive has been a director of Ascent since December 2012, when the Company was rescued from the brink of collapse.  Under his direction the Company disposed of non-core assets and brought the Petišovci asset into production.

Nigel Moore has also decided to retire from the Board. Nigel has been a director of Ascent since 2006 and has provided invaluable support to the Company including in his role as Chairman of the Audit Committee.

The Company will seek to appoint an additional non-executive director to replace Nigel in due course.

The Company would like to thank Clive and Nigel for everything they have done for Ascent and wish them well for the future.

Cameron Davies will continue in his role as a non-executive director to provide continuity and technical expertise to the Board, and will also assume the role of Chairman.

Slovenia

Production for December 2018

Total production in December was 420,559 cubic metres (14,852 Mcf) an average of 0.5 MMscfd and revenue for the month was €84,144.

Total production for November was 463,283 cubic metres (16,356 Mcf) an average of 0.6 MMscfd, and revenue for the month was €96,123.

Total gas production for the 12 months ended 31 December 2018 was approximately 12 million cubic metres (0.4 BCF) and total condensate produced over the same period was 462,000 litres (2,905 bbls). 

Total revenue for the 12 months ended 31 December 2018 is expected to be around €2.1 million. 

Permitting

As previously announced the Petišovci project partners have applied for two separate permits: the IPPC permit, which would allow the joint venture to install a processing facility to treat gas produced from the field to a standard suitable for the Slovenian national grid; and the re-stimulation permits, which would allow the existing wells to be worked over to bring their production back to full potential.

At the beginning of November, the new Environment Minister announced an internal review into the permitting process.  This review concluded in early December with the findings of the review focussed on procedural issues within ARSO and not the content of the permit applications.

Over the course of December various experts have published their opinions on the re-stimulation processes.  The stimulation of wells has been a common practice in Slovenia since 1956 with over 100 such activities completed without incident.  Most recently, in 2011, the stimulation of Pg-10 and Pg-11A were subject to extensive review.  We have also made details of the fluids used during the stimulation process public to address public misconceptions.

We understand that the permits are back in the permitting process within ARSO and, based on the level of responses and analysis provided in relation to their questions, we remain hopeful that both permits will be issued in due course. 

In addition, we continue to explore other ways to increase production from Petišovci independent of permitting.

Legal recourse

While we remain hopeful that the permitting system in Slovenia will function equitably and expeditiously to confirm the necessary permits,  the Board of Ascent has appointed legal advisers experienced in pursuing energy related disputes, and, while no decision to proceed has yet been taken, the Board will be ready to defend the Company's legitimate interests if necessary.

Funding

The Company currently holds around €400,000 in cash and has a further €200,000 of funds on deposit as collateral against a bank guarantee.  Production from Slovenia and the continued focus on minimising costs enables us to continue to progress the project at Petišovci while also re-focusing the Company's activities.

Colin Hutchinson, CEO of Ascent Resources plc, commented:

"While the Petišovci project remains a potentially very valuable asset, I am pleased that we now have a way forward that is not entirely based on Slovenia and the award of permits.

I am also pleased to welcome John Buggenhagen to the Company and look forward to working with him in Slovenia and on new projects."

Ascent Resources plc Colin Hutchinson, CEO	0207 251 4905
WH Ireland, Nominated Adviser & Broker James Joyce / Chris Viggor	0207 220 1666
Yellow Jersey, Financial PR and IR Tim Thompson / Harriet Jackson / Henry Wilkinson	0203 735 8825

 

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