Ascent Resources PLC Revenue Recognition & Slovenia Update (5337U)
02 August 2022 - 04:00PM
UK Regulatory
TIDMAST
RNS Number : 5337U
Ascent Resources PLC
02 August 2022
2 August 2022
Ascent Resources plc
("Ascent" or the "Company")
Revenue Recognition & Slovenia Partner Disputes Update
Ascent Resources Plc (LON: AST), the onshore Hispanic America
and European focussed energy and natural resources company, is
pleased to announce an agreement of PG-10 and PG-11A hydrocarbon
revenues and update on its previously announced JV and operator
disputes in Slovenia.
Highlights
- Agreement with JV partner for Ascent to recognise EUR1.68
million of hydrocarbon revenues from the PG-10 and PG-11A wells for
the period April 2020 through to June 2022
- Mediation scheduled for September to resolve Ascent's claim to
significant additional hydrocarbon revenues produced in the
concession area
- JV partners seeking to resolve a dispute with JV service
provider in relation to disputed fixed fee operating invoices
Revenue Recognition
As previously announced on 26 April and 4 July, the Company is
seeking to resolve its disputes with its Joint Venture partner,
Geoenergo*, in relation to different interpretations of the
Restated Joint Operating Agreement (the governing document and
rules for the JV as amended in 2013, "RJOA") with regard to
Ascent's entitlement to hydrocarbon production revenues generated
from within the Petisovci concession area.
Following the appointment of a High Court Ljubljana Judge as a
mediator, as announced on 4 July, the parties have been in
constructive dialogue (on the executive level and outside of
mediation) and have now agreed to Ascent's entitlement to 90% of
the hydrocarbons produced from the PG-10 and PG-11A wells.
Accordingly, the Company has issued new invoices for the period of
April 2020 through to June 2022 for a total gross invoiceable
amount of EUR1.688 million (including VAT) which the Company's 100%
owned subsidiary, Ascent Slovenia Limited, is expected to receive
imminently.
Following receipt of the production revenues, the Company
expects to recognise historic costs relating to an historic
liability owed to the field operator (as explained below), the
annual concession fee (approximately EUR0.2 million for the whole
concession area) and potentially other costs. The recognition of
historic revenues and costs for financial years ending 31 December
2020, 2021 and 2022 is expected to be reflected in the Company's
financial statements when the Company produces its final results
following the end of the 2022 financial year.
Dispute with JV Partner, Geoenergo
Furthermore, the parties are still in dispute with regard to a
difference in interpretations of the RJOA relating to which wells
Ascent is entitled to revenues from whilst it is in a preferential
cost recovery position (i.e. until it has received cash flows in
excess of its EUR50 million historic investment). The different
interpretations hinge on which wells produced above a baseline
production profile (defined in the RJOA) should be included in the
calculation. Depending on the interpretation this could result in
significant additional revenues for the period in question.
Dispute with Field Operator
As previously announced, the Company is managing a planned
contractual default with the JV's field operating service provider,
Petrol Geo (which is a 100% owned subsidiary of Petrol, with Petrol
itself a 50% stakeholder of Geoenergo) in relation to a significant
change in circumstances which impacts the fixed service fee
invoices received since at least 2019.
Ascent has so far recognised a total outstanding liability to
the operator of some EUR0.23 million, whilst amounts claimed by
Petrol Geo in relation to rejected invoices are significantly
higher. The Company remains hopeful of resolving the JV's dispute
with Petrol Geo and is in dialogue with its JV partner, Geoenergo,
to put forward a productive detailed settlement proposal.
Further updates on resolution of both these matters will be
announced in due course.
*Geoenergo is a jointly owned company, with 50% owned by Nafta
Lendava (a 100% Government controlled entity) and with 50% owned by
Petrol (a 30% Government-controlled entity).
Andrew Dennan, Chief Executive Officer, commented:
"We are very pleased to have agreed recognition of seven figure
historic production revenues from the PG-10 and PG-11A wells. This
is a material development for the Company as we continue to unlock
the legacy commercial stalemate with our partners in Slovenia."
Enquiries:
Ascent Resources plc Via Vigo Communications
Andrew Dennan
WH Ireland, Nominated Adviser & Broker
James Joyce / Sarah Mather 0207 220 1666
Novum Securities, Joint Broker
Jon Belliss 0207 399 9400
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 rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCGZGGRMMKGZZZ
(END) Dow Jones Newswires
August 02, 2022 02:00 ET (06:00 GMT)
Ascent Resources (LSE:AST)
Historical Stock Chart
From Feb 2024 to Mar 2024
Ascent Resources (LSE:AST)
Historical Stock Chart
From Mar 2023 to Mar 2024