Ascent's Troubles Deepen in Slovenia (Update)
Slovenia-focused Ascent Resources posted widen losses and a steep decline in revenues in the first half, amid operational setbacks at the Petisovci gas field. But it successfully placed shares with an investor that will bring in some £1mn ($1.35mn) before costs in extra cash, it said September 20.
Revenues came in at £242,000 ($304,000) for the six months ending June 30, down from £1.28mn a year earlier, Ascent said in a stock filing on September 20. The company’s gas production at Petisovci has been falling steadily for much of the year as a result of natural decline at its two deep gas wells, totalling 250,000 m3 in June, down from 413,000 m3 in January.
Ascent booked £994,000 in losses for the period, compared with £611,000 a year earlier.
The company wants to re-stimulate its existing wells using hydraulic fracturing, but was denied the necessary permits from Slovenian authorities in June.
“Without such permits, we will be unable to develop and deliver the full potential of the deeper tight gas reservoir within the Petisovci field,” Ascent said. The company is seeking compensation from the government in court for its decision.
Ascent is considering alternative options for developing Petisovci without the use of fracturing. It commissioned a report this year that assessed existing 3D seismic survey to identify conventional oil and gas prospects within its concession that could be developed. The company said its initial interpretation of the report was “highly encouraging,” noting it would evaluate conventional targets for development with its local project partner Geoenergo over the next six weeks.
It is also looking for investment opportunities outside of Slovenia. “We continue to search for new opportunities in the region that will take reliance away from Slovenia and diversify the opportunities for finding new reserves,” explained John Buggenhagen, who took over as Ascent’s CEO in July as part of a managerial shake-up.
Riverfort buys equity
UK-based RiverFort Global Opportunities has subscribed for 393,000,000 shares at a 10% premium to the market close September 19. Buggenhagen said the money enabled Ascent to "begin to execute our plan to grow the company's reserve and production base in Slovenia while we find new opportunities in the region and diversity our assets. This is the next step in reinventing Ascent and is necessary to move forward towards new producing wells while continuing to focus on capturing the significant value that the company and its partners have already created at Petisovci."
The deal has three agreements: the subscription at 0.275 p/each; an equity sharing agreement; and a one-year investment agreement such that Ascent will receive $500,000 on closing and the balance over the next twelve months. The amount ultimately received will be higher or lower depending on whether the share price rises or falls respectively. Riverfort is also limited in selling shares and it cannot short the company.