Successful Revenue Recognition Arbitration

Ascent Resources PLC

25 October 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.

25 October 2023

Ascent Resources plc

("Ascent" or the "Company")

Successful Revenue Recognition Arbitration

Ascent Resources Plc (LON: AST), the onshore Hispanic American and European focussed energy and natural resources company is delighted to announce receipt of a positive Arbitration Tribunal binding interim decision, confirming Ascent Slovenia Limited (ASL)'s entitlement to proceeds above the baseline production profile from all wells in the concession area.

As previously announced, in June 2023 ASL had its Arbitration Tribunal hearing against Geoenergo regards the different interpretations of the RJOA relating to ASL's entitlement to production above the baseline production profile, as set out in the 2013 Restated Joint Operating Agreement, for all wells in the concession area whilst it is in preferential recovery mode (i.e. until it has recovered its investment of over €50 million).

The Arbitration Tribunal has now issued a binding interim decision which confirms that ASL's interpretation of the RJOA is the correct one. This confirms that, whilst ASL is in a preferential recovery position, ASL is entitled to a 90% share of the hydrocarbons produced above the baseline production profile from all of the wells on the concession area (except for the Pg-1 well which is included in the baseline production). This means that in addition to the PG-10 and PG-11A revenues the Company has been receiving it will now also be entitled to receive on-going monthly revenues from incumbent wells, i.e. Pg-3, Pg-5, PG-6, Pg-7, Pg-9 (if it produces again) and the Dolina and Pt wells.

The Arbitration Tribunal will now decide the final award in the second stage of the bifurcated procedure. ASL has proposed to the Arbitration Tribunal to instruct Geoenergo to produce specific production and financial information so the exact quantum of the award for the proceeds ASL is entitled to since December 2019 (being the three-year statutory limit for claims triggered by the December 2022 arbitration filing date) can be verified and awarded. The second stage of the arbitration process is expected to complete by 11 April 2024.  As previously announced, ASL continues to estimate that these proceeds, which have already been received by Geoenergo, are likely to be in the magnitude of in excess of € 3.5 million due to ASL, although any actual monies receivable would be determined by the Arbitration Tribunal. Further updates will be announced in due course.

Andrew Dennan, Chief Executive Officer comments;

"We are very pleased to have received this multi million euro arbitration tribunal decision, which underlines what has been evident to the current Ascent team for some time and now and finally is being resolved formally and in a binding way."

Enquiries:

Ascent Resources plc Andrew Dennan	Via Vigo Communications
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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