Ascent Resources PLC (AIM:AST) Update on Slovenian JV partner negotiations

Ascent Resources Plc (LON: AST), the onshore Hispanic American and European focussed energy and natural resources company, provides an update in relation to its legacy disputes with its Slovenian JV Partner Geoenergo* and the JV operating service provider Petrol Geo**. Ascent considers Geoenergo and Petrol Geo, given their common ownership, to be connected parties.

As previously announced on 2 August 2022, Ascent Slovenia Limited (“ASL”) and its Slovenian JV partner, Geoenergo, agreed ASL’s entitlement to hydrocarbon revenues produced from the PG-10 and PG-11A wells for the period April 2020 through to June 2022. ASL received a net payment of €650,560, as announced on 12 August, relating to the 2020 and 2021 gas sales proceeds from the PG-10 and PG-11A wells less certain costs. The parties have agreed that ASL is entitled to a €857,617 payment for the 1H 2022 gas sales revenues, which accrues interest at a rate of 9% per annum while ASL awaits receipt of payment of these agreed but outstanding amounts.

Additionally, ASL has accrued a further amount owed to it of circa €370,000 for production through Q3. The current balance owed to ASL, as at end September, for the PG-10 and PG-11A wells, is estimated to be circa €1,227,617 and this figure is expected to increase monthly by approximately €100,000 / month assuming forward production of 100,000scm/month and a gas price of €100/MWh.

ASL and Geoenergo have now completed the high court judge-supervised mediation process and ASL has today initiated arbitration proceedings against Geoenergo to seek a binding and enforceable resolution, which was not available through mediation.

The arbitration process is targeting immediate payment to ASL of its share of the 2022 PG-10 and PG-11A hydrocarbon sales revenues agreed with Geoenergo but currently withheld by it, the timely payment of all future invoices, and a binding resolution on which wells are included in ASL’s revenue entitlement. ASL has a total claim in excess of Euro 4M and expects to make material progress on this domestic arbitration process ahead of the year end.

Once matters are resolved with Geoenergo, ASL expects to be able to rapidly conclude disputed matters with Petrol Geo, the JV’s operating service provider. However, in the meantime, ASL expects during Q4 to enter into a mediation process with Petrol Geo in relation to ASL’s planned contractual default, as announced 28 May 2020, relating to an amount of circa €230k owed to Petrol Geo for services provided in 2019 as well as in relation to invoices rejected by the JV on a monthly basis since April 2020, totalling circa €1.4M.

*Geoenergo is a Slovenian operating company whose only asset is its interest in the Petisovci license. Geoenergo is owned joint and equally by Nafta Lendava d.d.o (a 100% directly Slovenian state-owned entity) and by Petrol d.d. (a 30+% indirectly controlled state-owned publicly listed entity)

**Petrol Geo is a 100% owned subsidiary of Petrol d.d. (a 30+% indirectly controlled state owned publicly listed entity).


Ascent Resources plc

Andrew Dennan

Via Vigo Communications

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