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

11 March 2019

Ascent Resources plc

("Ascent" or the "Company")

Permitting update

The Board of Ascent would like to provide the following update to shareholders on permitting in Slovenia.

On 8 March the Slovenian Environment Agency ("ARSO") issued a Decision ordering an Environmental Impact Assessment ("EIA") to be undertaken in respect of the project to re-stimulate the currently producing Pg-10 and Pg-11A wells.

The partners plan to appeal the Decision within the prescribed 15-day period.  The key ground for appeal is the fact that all six expert government agencies which ARSO is required to consult as part of the screening assessment process concluded that no EIA should be required on the basis that the project to re-stimulate the wells is not likely to have significant effects on the environment.  ARSO is bound to follow the findings of the six agencies since it has not undertaken any independent assessment of the likely impacts of the environment.  ARSO has ignored the advice provided by the experts that they consulted.

Since the partners applied for the screening assessment back in May 2017, we will also challenge the Decision for not being issued within the two-month period prescribed by Slovenian law. The failure to comply with other provisions of Slovenian law as well as breaches of EU law will be detailed in the appeal.

Furthermore, the re-stimulation of gas wells is an activity which has been performed in the Dolina-Petišovci area for over half a century, most recently in 2011, and this is standard procedure adopted in similar fields all around the world.  We note that the detailed analysis undertaken by the Slovenian Geological Institute after the Pg-10 and Pg-11A wells were subject to initial stimulation in 2011 found no impact or damage to the environment therefrom.

We welcome ARSO acknowledging in its Decision that the proposed project cannot be regarded as "fracking" as defined by the European Commission in its recommendation in 2014.  

The Company continues to work with legal experts in Slovenia and London to prepare claims for damages as a result of the numerous and continued failures and delays by ARSO and the Ministry to comply with Slovenian and EU law.  This Decision is in direct contradiction of expert opinions procured by ARSO and provides further evidence in support of any potential claim for damages.

Any potential claim for damages will take into account the amount invested by Ascent in the project, currently in excess of €50 million, and future expected profits from the development of the field which is estimated to be a multiple of the existing investment.

Colin Hutchinson, CEO of Ascent Resources plc, commented:

"The Company will appeal this contradictory Decision. The Company has fully complied with the permitting process and received positive expert opinions from all government agencies which the Slovenian Environmental Agency was required to consult who concluded that the project was not likely to have a significant impact on the environment.  This Decision provides further grounds for a significant claim for damages sustained by Ascent shareholders as a result of these continued unjustifiable delays to the development of the Petišovci project."