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Ascent Resources PLC - Permitting update

RNS Number : 1797C
Ascent Resources PLC
14 June 2019
 

Ascent Resources plc / Epic: AST / Index: AIM / Sector: Oil and Gas

14 June 2019

Ascent Resources plc

("Ascent" or the "Company")

Permitting update

Ascent Resources plc, the European focused oil & gas exploration and production company, provides the following update in relation to the well permits in Slovenia.

 

Appeal to the Administrative Court in Slovenia

 

The official response from the Ministry of the Environment has now been received by lawyers representing the joint venture.  The decision is being studied in detail and a robust response to this manifestly wrong decision contrary to EU law will be submitted in advance of the deadline on 15 July 2019.  This appeal will be heard by the Administrative Court in Slovenia.

 

Litigation in Slovenia for damages arising from breaches of Slovene and EU Law

 

The Company will also submit a claim for damages against the Republic of Slovenia for breach of EU law including for the unreasonably long time it took for the decision to be reached. 

 

The decision of ARSO and the Environment Ministry ignores the opinion of the six independent expert bodies whose advice ARSO sought. In breach of EU law, the decision also mistakenly concluded that the project fell within a conservation area and misapplied EU case law in relation to mitigation measures.

 

The application was submitted in May 2017 and ARSO made its ruling in March 2019.  Under Slovene law, decisions on Preliminary Screening applications must be taken within 2 months, Slovenia is in breach of Slovenian Law. Furthermore, under EU law, decisions on Preliminary Screening applications must be taken within 90 days, therefore Slovenia is in breach of EU law.

 

The Company will be seeking damages for loss of future income from the project which would have been expected to have been a multiple of the historic investment of some €50 million.

 

Arbitration claims for damages under the Energy Charter

 

The Company has been working with legal experts for some months now developing an Investment Treaty Arbitration claim under the Energy Charter Treaty. 

 

It was the strong desire of the Board to avoid such litigation and obtain the permits necessary to develop the field which it was legally entitled to.  As it has now become apparent that the possibility of achieving these goals has significantly diminished, the Company will move ahead with filing this claim.

 

Funding legal action

 

The level of the claim for damages will mean any legal action will be costly.  Over the past months, the board has developed relationships with specialist litigation funding partners.  We will now seek to conclude an arrangement to finance legal claims in the least dilutive manner possible.

 

Communication of the decision

 

It is deeply disappointing that a decision of this significance was not communicated directly to the partners before it was published on a government website and reported in the Slovenian media.  In the view of the board this demonstrates a lack of respect to a foreign investor who has invested more than €50 million in the project over its twelve years of operations in the country.  The dissemination of market sensitive information without first informing the Company should be unsettling for all public companies invested in Slovenia.

 

Actions by the Company

 

The focus in Slovenia now inevitably shifts away from the development of the Petišovci Project towards obtaining legal redress for the damages inflicted on shareholders by the actions of the government.  As a result, we will consider a wide range of measures to reduce our operating costs to the minimum necessary. 

 

At a PLC level we will be reducing costs including directors' remuneration from the end of June 2019. 

 

Future direction

 

The strategy of the Company remains to maximise the value of its Slovenian asset while seeking to grow the Company in the region. 

 

We will seek to realise value for our Slovenian asset, by aggressively pursuing claims for damages in all available jurisdictions to the fullest extent of the law.

 

At the same time the Company continues to pursue other opportunities in the region in jurisdictions with established oil & gas industries and a developed regulatory system.

 

Colin Hutchinson, CEO of Ascent Resources plc, commented:

"The decision of the Environment Ministry is deeply damaging to the project and to the interests of Slovenia, we will seek to obtain full redress for shareholders through local and international courts."

 

Ascent Resources plc

Colin Hutchinson, CEO / John Buggenhagen, COO / Cameron Davies, Chairman

0207 251 4905

 

WH Ireland, Nominated Adviser & Broker

James Joyce / Chris Savidge

0207 220 1666

SP Angel, Joint Broker                                                                  

Richard Redmayne / Richard Hail

0203 470 0470

Yellow Jersey, Financial PR and IR

Tim Thompson / Harriet Jackson / Henry Wilkinson

0203 004 9512

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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Quick facts: Ascent Resources PLC

Price: 2.875

Market: AIM
Market Cap: £1.7 m
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