Operational Update

RNS Number : 9282P

Ascent Resources PLC

24 February 2016

 

24 February 2016

Ascent Resources plc
("Ascent" or "the Company")

Operational Update

Ascent Resources plc (AIM: AST), the oil and gas exploration and production company with assets in Slovenia is  pleased to provide the following update to the market on further progress towards its goal of producing gas from the Petišovci field in 2016.

IPPC permit

Our long-term goal is to construct a new processing facility to clean the gas from the Petišovci field to supply gas into Slovenia's national grid, particularly for the volumes of gas anticipated during full field development.  As previously announced, an IPPC permit is required for the construction of this facility and the Company is currently in the final stage of the process, which began when our application was submitted in June 2014.

The IPPC Permit was first passed by the Environment Ministry in December 2014 when it was put out to public consultation; following a six month process the permit was provisionally awarded in July 2015.  This award was appealed by two bodies but these appeals were rejected by the relevant Minister as being without merit in November 2015.   As announced on the 16 December 2015, a further appeal was initiated by one of the two bodies whose objections were turned down by the Minister.  The appeal to the Slovenian courts is the final step in the determination of the IPPC permit. 

Based on professional advice, we previously informed shareholders that the court process should complete within six to nine months from December 2015.  However, we have recently received notification from the court that the case is listed to be reviewed ahead of this schedule, in March 2016.  Whilst there is no guarantee that a final decision will be taken in March, or that the decision will be favourable to Ascent, it does give reasonable grounds to expect the Permit to be awarded within our anticipated timeline, namely before the end of Q2 2016.

Alternative route to first gas

As discussed in our last operational update in December 2015, the Company has a second potential route to market not dependent on an IPPC Permit, through outsourcing gas processing to a third party.  We advised that we hoped to have a full update on this route by the end of Q1 2016 and we remain on track to achieve that goal.

Methanol Plant

The Petišovci asset is adjacent to a disused methanol plant, which took its raw material gas from the Petišovci field when last operational.

For some time, the owner of the methanol plant (Nafta Lendava: one of our partners in the Petišovci project) has sought a buyer to recondition and reopen the facility. The Company understands that on Friday 19 February 2016 the sale of the methanol plant to US Methanol Inc. was completed for €5.6million.

Ascent held initial discussions with the management of US Methanol during December 2015 with a view to supplying gas to the re-commissioned methanol plant. This option also negates the need for an IPPC permit as the Company could sell the gas from the Petišovci field in untreated form.

Summary

The Board will continue to pursue all three routes to market. Early production through methanol or outsourced processing is attractive as it brings revenue and data on well performance in the short term at relatively low cost.  While the IPPC permit is essential for the production of higher volumes of gas, the joint venture is expected to be favoured as the initial route to market as the project moves into full field development.

Colin Hutchinson, Interim CEO of Ascent commented: 

"We are pleased to be making substantial progress with all three potential routes to market, which gives us good reason to be optimistic that the Company can achieve its prime goal of first gas during this calendar year."

Enquiries:

Ascent Resources plc Clive Carver, Chairman Colin Hutchinson, Interim CEO	0207 251 4905
finnCap Limited, Nominated Adviser Christopher Raggett Emily Watts	0207 220 0500
IFC Advisory Ltd, Financial PR and IR                Graham Herring Tim Metcalfe Heather Armstrong	0203 053 8671

 

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