Shares in Ascent Resources PLC (AIM:AST), the oil and gas company, jumped close to 15% on Tuesday morning after it signed a collaborative agreement with MBD Partners, the European-based investment firm.
Owned by experienced natural resources investor Ibrahim Diab, MBD will help Ascent to “jointly review and evaluate business development opportunities” with the energy company focused on securing its cash flow.
As part of the deal, MBD has agreed to a material strategic equity investment of £1.5 million, equating to 4.2 million shares bought at 3.5p each, and has the right to propose a new nominated non-executive director.
MBD may also receive additional shares in the form of five-year warrants, the amount given depending on whether Ascent’s Slovenian subsidiary wins an arbitration claim against its joint venture partner.
Diab, through his 100% ownership of MBD, will hold 20.54% in Ascent following the subscription of the partnership.
James Parsons, Ascent’s chairman, commented: "This is a highly advantaged subscription despite difficult markets, which serves both to fund the business at a premium whilst also de-risking our near-term inflection point with the expected Slovenian arbitration result.
“We are delighted to welcome MBD as a cornerstone shareholder and look forward to refining and delivering our strategy together. We believe this partnership will create both momentum and value for our shareholders and look forward to updating the market on our progress in due course."
Ascent shares opened at around 3p on Tuesday and are down around 18% in 2023.