TIDMAST

RNS Number : 1836Z

Ascent Resources PLC

13 September 2022

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

13 September 2022

FOR IMMEDIATE RELEASE

Ascent Resources plc

("Ascent" or "the Company")

Interim results for the period ended 30 June 2022

Ascent Resources plc (LON:AST), the AIM quoted onshore Caribbean, Hispanic American and European energy and natural resources focussed company ("Company") is pleased to report its interim results for the six months ended 30 June 2022(the "Period" or "H1 2022").

Highlights:

-- Launch of ESG Metals Strategy as a new target sector within its natural resource focussed business, the Company continues to evaluate a number of ESG Metal transactions.

-- Signing of a non-binding head of terms with Enyo Law LLP, a specialist arbitration and litigation legal firm, to advance a fully funded non-recourse damages-based agreement for the arbitration proceedings against the Republic of Slovenia.

-- Raised GBP0.6m before expenses by way of a subscription and placement with existing and new investors.

Post Period end highlights:

-- Launched arbitration proceedings against the Republic of Slovenia under the Energy Charter Treaty and UK-Slovenia bilateral investment treaty with regards to breaches causing significant monetary damages in excess of EUR500 million. It should be cautioned that in the event the Company is successful in its claim any amount actually received by the Company may be significantly lower.

-- Receipt of the first net cash payment of EUR650,560 from Slovenian partner in relation to production h ydrocarbon production revenues from the PG-10 and PG-11A wells from April 2020 through to December 2021.

Enquiries:

 
 Ascent Resources plc              Via Vigo Consulting 
  Andrew Dennan, CEO 
 WH Ireland, Nominated Adviser 
  & Broker 
  James Joyce / Sarah Mather       0207 220 1666 
 Novum Securities, Joint Broker 
  John Belliss                     0207 399 9400 
 

Chairman and CEO's statement

We are delighted to report a strong six month period ended 30 June 2022 (the "Period" or "H1 2022"), with the Company completing its 'no win-no fee' style funding agreement for its claims against the Republic of Slovenia which was rapidly followed by the formal launch of the associated arbitration process. Post the Period end, the Company confirmed a monetary damages claim in excess of EUR500 million and we believe this makes Ascent Resources plc a unique and compelling proposition for shareholders.

Whilst gas production at the Petisovci project in Slovenia is buoyed by the strong European gas market backdrop, the Company also continues to pursue an industrial growth strategy across both onshore gas and ESG Metals where it has, for some time now, been preparing for its maiden growth transaction.

Our vision remains, by the end of 2022, to have finalised this transformation of Ascent such that the Company has both sustainable cash flow generation from its operations and compelling upside exposure from a funded claim, all supported by an "on the money" ESG compatible strategy in an exciting, growth focused, part of the world.

We thank our shareholders for their support and look forward to achieving success together.

Slovenia Arbitration

The future success of the Company's 75% interest in the Petisovci tight gas project joint venture in Slovenia was hit with a significant blow in April 2022 when the Republic of Slovenia voted to approve amendments to the mining law which now includes a complete ban on hydraulic stimulation for the purpose of producing hydrocarbons. Consequently, the Company does now not expect to be able to re-stimulate the PG-10 and PG-11A wells and any future development plans can not include the use of mechanical stimulation. The Company responded quickly serving the Republic of Slovenia ('Slovenia' or 'the State') with a new notice of dispute of further breaches under the UK-Slovenia bilateral investment treaty ('BIT') and the Energy Charter Treaty ('ECT') on 5 May 2022. The Company then entered into a binding damages agreement, essentially a 'no win - no fee' style arrangement, to appoint Enyo Law LLP , a s announced on 30 May 2022. Enyo Law LLP is a specialist arbitration and litigation legal firm who filed both of the Notice of Disputes on behalf of the Company and represented the Company in last year's pre-arbitration negotiations with the Republic of Slovenia. Post the Period end, the Company formally initiated arbitration proceedings against the Republic of Slovenia with a revised monetary damages claim in excess of EUR500 million on 15 August 2022. It should be cautioned that in the event the Company is successful in its claim any amount actually received by the Company may be significantly lower.

The claim is based on what the Board believe to be a populist campaign carried out by Slovenia against the Company and our investment, which has prevented the development of the Petišovci oil and gas field. In particular, Slovenia has prevented the restimulation of two wells (PG-10 and PG-11A) in 2017, which was necessary to maintain the levels of gas produced from the tight rock reservoir (as has been done multiple times over the last fifty years). This frustration of the ability to develop the field was initiated via a decision of the State's regulator, the Slovenian Environment Agency ("ARSO"), which determined that an Environmental Impact Assessment ("EIA") would be required to be approved in order to conduct the low-volume hydraulic stimulation, even though such an EIA was not required and never had been previously under Slovenian law, and ARSO's conclusion was contrary to the conclusion of Slovenia's own expert bodies. This decision significantly slowed down the development of the field by the Company. Pending such low-volume hydraulic stimulation, the amount of gas produced by the field was very significantly reduced, resulting in a significant loss of the Company's revenues. At the same time, the Minister of the Environment and Spatial Planning of Slovenia repeatedly made public statements portraying the Investors, as well as the Petišovci project, in a negative light, and the Company believes that leaks were made by ARSO to the press. This further demonstrates that ARSO was biased against the Investors and that the ARSO's decision was politically motivated. Slovenia's campaign against the Investors culminated in a complete ban on low-volume hydraulic stimulation, which came in effect on 5 May 2022. The Board believes that statements made during the parliamentary debate on the ban leave no doubt that the Investors were being specifically targeted by it.

Accordingly, the Company has submitted its dispute with the Republic of Slovenia to arbitration administered by the International Centre for Settlement of Investment Disputes ("ICSID"). The request for arbitration follows the Notices of Dispute filed by Ascent Resources Plc and Ascent Slovenia Ltd on 23 July 2020 and 5 May 2022 respectively in which Slovenia was formally notified of the existence of a dispute under the ECT and the BIT. The Request for Arbitration ("Request") is submitted pursuant to Article 26 of the ECT and Article 8 of the 1996 Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Slovenia for the Promotion and Protection of Investments.

Ascent brings this claim in relation to Slovenia's measures that have destroyed the value of Ascent's investments in the Slovenian energy sector, and which have de facto deprived Ascent of its right to produce gas in Slovenia. Ascent's rights have been unlawfully expropriated by Slovenia, in breach of the country's obligations under international law and both the ECT and the BIT. The Company has therefore sustained losses for which it is seeking compensation. According to preliminary estimates, the losses sustained are in excess of EUR500 million. It should be cautioned that in the event the Company is successful in its claim any amount actually received by the Company may be significantly lower. The Company remains amenable to discussing settlement with the Republic of Slovenia following its review of the matter or otherwise pursuing this significant damages claim through to a binding result for the Company.

Slovenia Operational Update

The PG-10 and PG-11A wells continue to produce gas with 11,934 SCM/month being sold to local industrial buyers via the low-pressure pipeline. Through the Period, the Company remained in dispute with both its JV partner Geoenergo, in relation to agreeing the invoice amounts for hydrocarbons produced from the wells, and also in dispute with its JV operating service provider Petrol Geo (which is a related party of Geoenergo) in relation to their service agreement and a significant change in circumstances. Post the Period end, the Company agreed recognition of revenues for the period 2020 through to June 2022 which will be reflected in the next annual report. The Company has agreed total gross revenues of EUR1.68 million for the period of April 2020 through to June 2022. Furthermore, the Company is scheduled to have mediation with its JV partner in September 2022 in relation to different interpretations of the joint venture contract, which Ascent understands could result in the recognition of further hydrocarbon revenues.

ESG Metals Strategy

As announced in January 2022, the Company continues to evaluate a number of ESG Metal transactions across Latin and Hispanic America and it has now identified Peru as its primary target geography for this strategy, which focuses on ore processing and secondary mining recovery opportunities consistent with global Environmental, Social and Governance ("ESG") principles. The Company expects that these opportunities will typically involve the reclassification, through highly efficient recovery techniques, of surface stockpiled mining waste (previously viewed as a liability for mining companies) as a valuable asset for processing/reprocessing ahead of commercial sale to off-takers/other third-party buyers and/or participating in the enfranchising of local artisanal peasant gold mining communities with access to new tolling operations to process and commercialise their ore.

Peru is widely recognised as one of the largest and most diversified mineral producers with some of the most extensive reserves in the world with mining the most important sector in the Peruvian economy (some 10% of national GDP). Peru is currently the world's second largest Copper and Silver producer and Latin America's largest Gold, Zinc, Tin and Lead producer. Peru's Long-Term Credit Rating is rated as BBB by most agencies, which is amongst the strongest in the region. The country also benefits from a long history of mining, a robust mining legal framework and a significant pool of local expertise. The Company sees significant opportunity for attractive entry points in natural resources with a focus on onshore oil and gas developments and mining following the global pandemic which has triggered international capital flight and significant capital constraints for small-scale operators. The Company therefore initially expects to focus its attention on small-scale operations (up to 350 tpd), which the Company considers affordable, of an efficient operational scale and which have multiple local tax and permitting benefits.

Corporate

At the beginning of the year, in support of the Company focusing its ESG Metal strategy on Peru, the Company successfully raised new gross equity proceeds of GBP0.6 million to fund working capital requirements and wider business development activity at a price of 3.3 pence per new share, which represented a nil discount to the closing bid price on the prior day. The subscribers received one new equity warrant per new share subscribed for, with the warrant being exercisable at pence per warrant share at any time in the next two years.

During the Period, the Company agreed with the holders of the remaining 4 pence equity warrants that were issued on 6 August 2020 to an immediate warrant exercise whereby all 4 pence warrants were exercised, realising new equity proceeds of GBP242,500 for the Company, whilst the Company awarded one and half new warrants for each warrant exercised, with each new warrant being exercisable at 5p per new warrant at any time over the next three years.

In February 2022, Mr Ewen Ainsworth stepped down from his position as Non-Executive Director following his acceptance of a full-time executive position elsewhere.

Post the Period end, the Company has agreed invoices and began receiving payment for historic revenues from the PG-10 and PG-11A wells for the period of April 2020 through to June 2022. Accordingly, the Company expects to recognise historic production revenues as well as associated production costs in its next annual accounts.

Outlook

The team continue to work diligently across our key corporate priorities which include championing redress from Slovenia pursuant to our $0.5+ billion ECT and BIT funded monetary damages claim and delivering a complimenting maiden new business transaction focused on development and near term production and revenue generation. We look forward to delivering success for our shareholders at Ascent Resources plc and engaging with them throughout our continuing journey.

   James Parsons                                                                      Andrew Dennan 

Executive Chairman Chief Executive Officer

   12 September 2022                                                            12 September 2022 

CEO's report

Financial performance

Revenue for H1 2022 was GBPnil, as per the prior period. The closing cash balance at 30 June 2022 was GBP174,000 (H1 2021: GBP766,000 and FY21: GBP97,000). Post Period end the Company agreed invoices and began receiving payment for historic revenues from the PG-10 and PG-11A wells for the period of April 2020 through to June 2022. Accordingly, the Company expects to recognise historic production revenues as well as associated production costs in its next annual accounts.

During the Period the Company raised GBP600,000 before costs in an equity placing in January 2022 and a further GBP242,500 from a warrant exercise in April 2022. There was a cash outflow from operations of GBP720,000 and an inflow of GBP797,000 from financing, resulting in net cash flow of GBP77,000.

Operational performance

 
                                 Jan      Feb      Mar      Apr      May      Jun 
   Production KPI's             2022     2022     2022     2022     2022     2022 
---------------------------  -------  -------  -------  -------  -------  ------- 
 Total gas (k scm)             123.1    98.29   144.57   108.05   108.11    89.98 
---------------------------  -------  -------  -------  -------  -------  ------- 
 Total gas (MMcf)               4.35     3.47     5.11     3.82     3.82     3.18 
---------------------------  -------  -------  -------  -------  -------  ------- 
 Average daily gas 
  (k scm)                       3.97     3.51     4.66      3.6     3.49     3.00 
---------------------------  -------  -------  -------  -------  -------  ------- 
 Average daily gas 
  (Mcf)                       140.23   123.96   164.69   127.20   123.16   105.92 
---------------------------  -------  -------  -------  -------  -------  ------- 
 Total condensate (liters)     1,728    3,764    2,445    5,468    4,250    4,230 
---------------------------  -------  -------  -------  -------  -------  ------- 
 CGR (liters per 1000 
  scm gas)                     14.04    38.30    16.91    50.60    39.31    47.01 
---------------------------  -------  -------  -------  -------  -------  ------- 
 BOE - gas                    749.31   598.28   880.00   657.72   658.07   547.71 
---------------------------  -------  -------  -------  -------  -------  ------- 
 BOE - condensate              10.85    23.64    15.35    34.34    26.69    26.56 
---------------------------  -------  -------  -------  -------  -------  ------- 
 Total BOE                    760.16   621.92   895.35   692.62   684.76   574.27 
---------------------------  -------  -------  -------  -------  -------  ------- 
 

Total production for the Period was 672.10 thousand cubic metres of gas and 21,885 litres of condensate.

Gas sales to INA remain suspended as wellhead pressure is below the export pipeline pressure, which is not expected to be remedied following the Slovenian ban which includes the prohibition of low volume hydraulic stimulation. The Company produced gas in the year to date which was sold locally to an industrial buyer through a low-pressure pipeline . Post Period end, the Company agreed invoices and began receiving payment for historic revenues from the PG-10 and PG-11A wells for the period of April 2020 through to June 2022. Accordingly, the Company expects to recognise historic production revenues as well as associated production costs in its next annual accounts .

Consolidated Income Statement

for the Period ended 30 June 2022

 
                                                         Period ended   Period ended 
                                                              30 June        30 June 
                                                 Notes           2022           2021 
                                                             GBP'000s       GBP'000s 
                                                        -------------  ------------- 
 
 Revenue                                                            -              - 
 Cost of sales                                                      -           (25) 
 Depreciation of oil & gas assets                               (122)          (194) 
                                                        -------------  ------------- 
 Gross Profit                                                   (122)          (219) 
 
 Administrative expenses                                        (539)          (826) 
                                                        -------------  ------------- 
 Loss from operating activities                                 (661)        (1,045) 
 
 Finance income                                                     -              - 
 Finance cost                                                     (1)           (10) 
                                                        -------------  ------------- 
 Net finance costs                                                (1)           (10) 
 
 Loss before taxation                          2                (622)        (1,055) 
 
 Income tax expense                                                 -              - 
                                                        -------------  ------------- 
 Loss for the period after tax                                  (622)        (1,055) 
 
 Loss for the period attributable to equity 
  shareholders                                                  (622)        (1,055) 
 
 Earnings per share 
 Basic & fully diluted loss per share (GBP)    4              (0.005)         (0.01) 
 

Consolidated Statement of Comprehensive Income

for the Period ended 30 June 2022

 
                                                           Period    Period ended 
                                                            ended    30 June 2021 
                                               Notes      30 June        GBP'000s 
                                                             2022 
                                                         GBP'000s 
                                                       ----------  -------------- 
 
 Loss for the period                                        (622)         (1,055) 
 
 Other comprehensive income 
 
 Foreign currency translation differences 
  for foreign operations                                      599           (776) 
 
 Total comprehensive gain / (loss) for 
  the period                                                 (63)         (1,831) 
 

Consolidated Statement of Financial Position

As at 30 June 2022

 
                                                              30 June   31 December 
                                                                 2022          2021 
                                                    Notes    GBP'000s      GBP'000s 
                                                           ----------  ------------ 
 Assets 
 Non-current assets 
 Property, plant and equipment                    5            21,512        21,111 
 Exploration and evaluation costs                 5            18,576        18,463 
 Goodwill                                                         653           653 
 Prepaid abandonment fund                                         300           300 
                                                           ----------  ------------ 
 Total non-current assets                                      41,041        40,527 
 Current assets 
 Inventory                                                          -             - 
 Trade and other receivables                      6                43             8 
 Cash and cash equivalents                                        174            97 
 Restricted cash                                                    -             - 
                                                           ----------  ------------ 
 Total current assets                                             217           105 
                                                           ----------  ------------ 
 Total assets                                                  41,258        40,632 
                                                           ==========  ============ 
 
 Equity and liabilities 
 Attributable to the equity holders of 
  the Parent Company 
 Share capital                                    10            8,129         7,998 
 Share premium account                                         75,752        75,021 
 Merger reserve                                                   570           570 
 Equity reserve                                                     -             - 
 Share-based payment reserve                                    2,129         2,129 
 Translation reserves                                               5         (594) 
 Retained earnings                                           (47,228)      (46,566) 
                                                           ----------  ------------ 
 Total equity attributable to the shareholders                 39,357        38,588 
 
 Total equity                                                  39,357        38,588 
                                                           ----------  ------------ 
 
 Non-current liabilities 
 Borrowings                                       8               536           536 
 Provisions                                                       318           312 
                                                           ----------  ------------ 
 Total non-current liabilities                                    854           848 
 Current liabilities 
 Borrowings                                       8                 5             5 
 Contingent consideration due on acquisitions     9               450           450 
 Trade and other payables                         7               592           771 
                                                           ----------  ------------ 
 Total current liabilities                                      1,047         1,226 
                                                           ----------  ------------ 
 Total liabilities                                              1,901         2,074 
                                                           ----------  ------------ 
 Total equity and liabilities                                  41,258        40,632 
                                                           ==========  ============ 
 

Consolidated Statement of Changes in Equity

for the Period ended 30 June 2022

 
                                Share      Share     Merger     Equity      Share   Translation    Retained      Total 
                              capital    premium    reserve    reserve      based       reserve    earnings 
                                                                          payment 
                                                                          reserve 
                             GBP'000s   GBP'000s   GBP'000s   GBP'000s   GBP'000s      GBP'000s    GBP'000s   GBP'000s 
                            ---------  ---------  ---------  ---------  ---------  ------------  ----------  --------- 
 Balance at 1 January 2021      7,928     73,863        570         73      2,129         1,027    (44,595)     40,995 
 Comprehensive income 
 Loss for the period                -          -          -          -          -             -     (1,055)    (1,055) 
 Other comprehensive 
 income 
 Currency translation 
  differences                       -          -          -          -          -         (776)           -      (776) 
 Total comprehensive 
  income                            -          -          -          -          -         (776)     (1,055)    (1,831) 
 Transactions with owners 
 Issue of shares during 
  the year 
  net of costs                     70      1,176          -          -          -             -           -      1,246 
 Share-based payments               -          -          -          -         16             -           -         16 
--------------------------  ---------  ---------  ---------  ---------  ---------  ------------  ----------  --------- 
 Balance at 30 June 2021        7,998     75,039        570         73      2,145           251    (45,650)     40,424 
--------------------------  ---------  ---------  ---------  ---------  ---------  ------------  ----------  --------- 
 Balance at 1 January 2021      7,928     73,863        570         73      2,129         1,027    (44,595)     40,995 
 Comprehensive income 
 Loss for the period                -          -          -          -          -             -     (1,971)    (1,971) 
 Other comprehensive 
 income 
 Currency translation 
  differences                       -          -          -          -          -       (1,621)           -    (1,621) 
 Total comprehensive 
  income                            -          -          -          -          -       (1,621)     (1,971)    (3,592) 
 Transactions with owners 
 Issue of ordinary shares          70      1,176          -          -          -             -           -      1,246 
 Costs related to share 
  issues                            -       (18)          -          -          -             -           -       (18) 
 Equity value of 
  convertible loan 
  note                              -          -          -       (73)          -             -           -       (73) 
--------------------------  ---------  ---------  ---------  ---------  ---------  ------------  ----------  --------- 
 Balance at 31 December 
  2021                          7,998     75,021        570          -      2,129         (594)    (46,566)     38,558 
--------------------------  ---------  ---------  ---------  ---------  ---------  ------------  ----------  --------- 
 Balance at 1 January 2022      7,998     75,021        570          -      2,129         (594)    (46,566)     38,558 
 Comprehensive income 
 Loss for the period                -          -          -          -          -             -       (662)      (662) 
 Other comprehensive 
 income 
 Currency translation 
  differences                       -          -          -          -          -           599           -        599 
 Total comprehensive 
  income                            -          -          -          -          -           599       (662)       (63) 
 Transactions with owners 
 Issue of shares during 
  the year 
  net of costs                    131        731          -          -          -             -           -        862 
 Share-based payments               -          -          -          -          -             -           -          - 
--------------------------  ---------  ---------  ---------  ---------  ---------  ------------  ----------  --------- 
 Balance at 30 June 2022        8,129     75,752        570          -      2,129             5      47,228     39,357 
--------------------------  ---------  ---------  ---------  ---------  ---------  ------------  ----------  --------- 
 

Consolidated Statement of Cash Flows

for the six months ended 30 June 2022

 
                                                  Period ended    Period ended 
                                                  30 June 2022    30 June 2021 
                                                      GBP'000s        GBP'000s 
                                                --------------  -------------- 
 Cash flows from operations 
 Loss after tax for the period                           (622)         (1,055) 
 Depreciation                                              122             194 
 Change in receivables                                    (35)              53 
 Change in payables                                      (179)            (89) 
 Increase in share-based payments                           35              38 
 Exchange differences                                                       25 
 Finance cost                                                               10 
                                                --------------  -------------- 
 Net cash used in operating activities                   (719)           (824) 
                                                --------------  -------------- 
 
 Cash flows from investing activities 
 Payments for fixed assets                                   -               - 
 Payments for investing in exploration                     (1)               - 
                                                --------------  -------------- 
 Net cash used in investing activities                     (1)               - 
                                                --------------  -------------- 
 
 Cash flows from financing activities 
 Interest paid and other finance fees                        -               - 
 Loans repaid                                                -           (125) 
 Proceeds from borrowings                                    -             375 
 Proceeds from issue of shares                             842           1,265 
 Share issue costs                                        (45)            (40) 
                                                --------------  -------------- 
 Net cash generated from financing activities              797           1,475 
                                                --------------  -------------- 
 
 Net increase in cash and cash equivalents 
  for the year                                              77             651 
 Effect of foreign exchange differences                      -               - 
 Cash and cash equivalents at beginning 
  of the year                                               97             115 
                                                --------------  -------------- 
 Cash and cash equivalents at the end 
  of the year                                              174             766 
                                                ==============  ============== 
 

Notes to the Interim Financial Statements

For the six months ended 30 June 2022

   1.    Accounting Policies 

Reporting entity

Ascent Resources plc ('the Company') is a company domiciled in England. The address of the Company's registered office is 5 New Street Square, London EC4A 3TW. The unaudited consolidated interim financial statements of the Company as at 30 June 2022 comprise the Company and its subsidiaries (together referred to as the 'Group').

Basis of preparation

The interim financial statements have been prepared using measurement and recognition criteria based on International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board (IASB) as adopted for use in the EU. The interim financial information has been prepared using the accounting policies which were applied in the Group's statutory financial statements for the year ended 31 December 2020.

New Standards adopted as at 1 January 2022

Accounting pronouncements which have become effective from 1 January 2022 are:

   --      IFRS 3 - Business Combinations 
   --      IAS 16 - Property, Plant and Equipment 
   --      IAS 37 - Provisions, Contingent Liabilities and Contingent Assets 

These accounting pronouncements do not have a significant impact on the Group's financial results or position.

All amounts have been prepared in British pounds, this being the Group's presentational currency.

The interim financial information for the six months to 30 June 2022 and 30 June 2021 is unaudited and does not constitute statutory financial information. The comparatives for the full year ended 31 December 2021 are not the Group's full statutory accounts for that year. The information given for the year ended 31 December 2021 does not constitute statutory financial statements as defined by Section 435 of the Companies Act. The statutory accounts for the year ended 31 December 2021 have been filed with the Registrar and are available on the Company's web site www.ascentresources.co.uk . The auditors' report on those accounts was unqualified. It did not contain a statement under Section 498(2)-(3) of the Companies Act 2006.

Going Concern

The Financial Statements of the Group are prepared on a going concern basis.

COVID-19 has had limited direct impact on Ascent's assets in Slovenia but there may be delays in obtaining the necessary governmental approvals and processes. Production operations in Slovenia have been unaffected to date.

On 18 January 2022, the Company completed a GBP0.6 million subscription and raised a further GBP242,000 on 14 April 2022 from a warrant conversion. These funds were used for working capital and project costs during the reporting period. Furthermore, on 12 August 2022 and post period end, the Company received the first net payment of EUR 650,000 for hydrocarbon revenues for the period April 2020 to December 2021. A further EUR 857,000 of hydrocarbon revenues for the period January 2022 to June 2022 is expected in the near term. Following receipt of these production revenues, the Company expects to recognise historic costs relating to a historic liability owed to the field operator of approximately EUR 230,000 and potentially other costs. However, the Company may require further funding over the next twelve months to cover further development in Slovenia and discretionary spend incurred with executing on the ESG Metals Strategy through acquisition.

Based on historical and recent support from new and existing investors the Board believes that such funding, if and when required, could be obtained through new debt or equity issuances.

However, there can be no guarantee over the outcome of these options and as a consequence there is a material uncertainty of the Group's ability to raise the necessary finance, which may cast doubt on the Group's ability to operate as a going concern. Further, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.

Principal Risks and Uncertainties:

The principal risks and uncertainties affecting the business activities of the Group remain those detailed on pages 11-12 of the Annual Review 2020, a copy of which is available on the Company's website at www.ascentresources.co.uk.

   2.    Operating loss is stated after charging 
 
                                             Period ended    Period ended 
                                             30 June 2022    30 June 2021 
                                                 GBP'000s        GBP'000s 
                                           --------------  -------------- 
 Employee costs                                       363             475 
 Share based payment charge                             -              16 
 
 
 Included within Administrative Expenses 
 Audit fees                                             9              40 
 Fees payable to the Company's auditor                  -               - 
  for other services 
                                           --------------  -------------- 
                                                        9              40 
 
   3.    Earnings per share 
 
                                                Period ended    Period ended 
                                                30 June 2022    30 June 2021 
                                                    GBP'000s        GBP'000s 
                                              --------------  -------------- 
 Result for the period 
 Total loss for the period attributable 
  to equity shareholders                               (622)         (1,055) 
 
 Weighted average number of ordinary shares           Number          Number 
 For basic earnings per share                    128,149,204     106,483,897 
 
 Earnings per share (GBP)                            (0.005)          (0.01) 
 
   4.    Property, plant & equipment and Exploration and Evaluation assets 
 
                                        Computer       Developed   Total Property   Exploration 
                                       Equipment             Oil          Plant &             & 
                                                    & Gas Assets        Equipment    Evaluation 
                                        GBP'000s        GBP'000s         GBP'000s      GBP'000s 
                                     -----------  --------------  ---------------  ------------ 
 Cost 
 At 1 January 2021                             6          24,494           24,600        18,753 
 Additions                                     -               -                -             - 
 Effect of exchange rate movements             -           (624)            (624)         (149) 
                                     -----------  --------------  ---------------  ------------ 
 At 30 June 2021                               6          23,870           23,876        18,604 
                                     -----------  --------------  ---------------  ------------ 
 At 1 January 2021                             6          24,494           24,600        18,753 
 Additions                                     5               -                5             - 
 Effect of exchange rate movements             -         (1,631)          (1,631)         (290) 
                                     -----------  --------------  ---------------  ------------ 
 At 31 December 2021                          11          22,963           22,974        18,463 
                                     -----------  --------------  ---------------  ------------ 
 At 1 January 2022                            11          22,963           22,974        18,463 
 Additions                                     1               -                1             - 
 Effect of exchange rate movements             -             573              573           113 
                                     -----------  --------------  ---------------  ------------ 
 At 30 June 2022                              12          23,536           23,548        18,576 
                                     -----------  --------------  ---------------  ------------ 
 
 
 Depreciation 
 At 1 January 2021                    (6)   (1,811)   (1,817)   - 
 Charge for the year                    -     (194)     (194)   - 
 Effect of exchange rate movements      -         -         -   - 
                                     ----  --------  -------- 
 At 30 June 2021                      (6)   (2,005)   (2,011)   - 
                                     ----  --------  -------- 
 At 1 January 2021                    (6)   (1,811)   (1,817)   - 
 Charge for the year                    -     (328)     (328)   - 
 Effect of exchange rate movements      -       282       282   - 
                                     ----  --------  -------- 
 At 31 December 2021                  (6)   (1,857)   (1,863)   - 
                                     ----  --------  -------- 
 At 1 January 2022                    (6)   (1,857)   (1,863)   - 
 Charge for the year                  (3)     (121)     (124)   - 
 Effect of exchange rate movements      -      (49)      (49)   - 
                                     ----  --------  -------- 
 At 30 June 2022                      (9)   (2,027)   (2,036)   - 
                                     ----  --------  -------- 
 
 
 Carrying Value 
                           -------  -------  ------- 
 At 30 June 2022        3   21,509   21,512   18,576 
                           -------  -------  ------- 
 At 31 December 2021    5   21,106   21,111   18,463 
                           -------  -------  ------- 
 At 30 June 2021        -   21,865   21,865   18,604 
                           -------  -------  ------- 
 
   5.    Trade & other receivables 
 
                                  30 June 2022   31 December 
                                      GBP'000s          2021 
                                                    GBP'000s 
                                 -------------  ------------ 
 Trade receivables                           -             - 
 VAT recoverable                            73            42 
 Prepaid abandonment liability             300           300 
 Prepayments & accrued income             (30)          (34) 
                                 -------------  ------------ 
                                           343           308 
                                 =============  ============ 
 Less non-current portion                (300)         (300) 
                                 -------------  ------------ 
 Current portion                            43             8 
 
   6.    Trade & other payables 
 
                                    30 June 2022   31 December 
                                        GBP'000s          2021 
                                                      GBP'000s 
                                   -------------  ------------ 
 Trade payables                              525           581 
 Tax and social security payable              47            16 
 Other payables                                -             - 
 Accruals and deferred income                 20           174 
                                   -------------  ------------ 
                                             592           771 
                                   =============  ============ 
 
   7.    Borrowings 
 
                           30 June 2022   31 December 
                               GBP'000s          2021 
                                             GBP'000s 
                          -------------  ------------ 
 Group 
 Non-current 
 Convertible loan notes             536           536 
                          -------------  ------------ 
                                    536           536 
                          -------------  ------------ 
 
 
                                       30 June 2022   31 December 
                                           GBP'000s          2021 
                                                         GBP'000s 
                                      -------------  ------------ 
 Group 
 Current 
 Convertible loan notes                           5             5 
 Borrowings                                       -             - 
                                      -------------  ------------ 
 Liability at the end of the period               5             5 
                                      -------------  ------------ 
 

The non-current borrowings relate to the loan arrangement with Riverfort Global Opportunities with a loan note balance as at 30 June 2022 of GBP270,000. In December 2020 the Company signed a loan agreement provided equally by Align Research Limited and Riverfort Global Opportunities and under this loan agreement, the Company drew down a total of GBP375,000 in 2021, representing GBP125,000 from Align and GBP250,000 from Riverfort. During 2021 the Company repaid GBP125,000 resulting in a loan balance of GBP250,000 as of the end of 2021.

In December 2021, the Company extended the maturity of the outstanding loan amount so that it is payable in six equal instalments commencing February 2023.

   8.    Contingent consideration due on acquisitions 
 
                                         30 June 2022   31 December 
                                             GBP'000s          2021 
                                                           GBP'000s 
                                        -------------  ------------ 
 Group 
 Non-current 
 Ascent Hispanic Resources UK Limited             450           450 
                                        -------------  ------------ 
                                                  450           450 
                                        -------------  ------------ 
 
   9.    Share capital 
 
                                                30 June 2022       31 December 
                                                    GBP'000s              2021 
                                                                      GBP'000s 
                                            ----------------  ---------------- 
 Authorised 
 2,000,000,000 ordinary shares of 0.5p 
  each                                                10,000            10,000 
 
 Allotted, called up and fully paid 
 3,019,648,452 deferred shares of 0.195p 
  each                                                 5,888             5,888 
 1,737,110,763 deferred shares of 0.09p 
  each                                                 1,563             1,563 
 135,560,515 ordinary shares of 0.5p each 
  (2021: 109,376,804 ordinary shares of 
  0.5p each)                                             678               547 
                                                       8,129             7,998 
 
 Reconciliation of share capital movement    Ordinary shares   Ordinary shares 
                                                         No.               No. 
 Opening                                         109,376,804        95,283,281 
 Issue of shares during the year                  26,183,711        14,093,523 
                                            ----------------  ---------------- 
 Closing                                         135,560,515       109,376,804 
                                            ================  ================ 
 

The deferred shares have no voting rights and are not eligible for dividends.

Shares issued during the year

Issuance of equity throughout the year:

-- On 18 January 2022, the Company raised gross proceeds of GBP0.6 million by way of issue of 18,181,818 new ordinary shares at 3.3 pence per share to new and existing shareholders. Additionally, the Company issued a further 303,030 new ordinary shares to satisfy a GBP10,000 consultant invoices on the same terms as the placing.

-- On 3 February 2022, the Company issued a total of 1,636,363 new ordinary shares of 0.5 pence each at an issue price of 3.3 pence per share. 303,030 of these shares where issued to a consultant in lieu of cash for services provided, 242,424 shares where issued to staff and 1,909,909 shares where issued Align Research Limited. This transaction constitutes a related party transaction pursuant to AIM Rules for Companies. The independent directors having consulted with WH Ireland Limited, consider the transaction to be fair and reasonable insofar as the Company's shareholders are concerned.

-- On 14 April 2022, the Company raised gross proceeds of GBP242,500 from the exercise of 6,062,500 warrants at an exercisable price of 4.4 pence per new ordinary share.

10. Share based payments

The Company has provided the Directors, certain employees and institutional investors with share options and warrants ('options'). Options are exercisable at a price equal to the closing market price of the Company's shares on the date of grant. The exercisable period varies and can be up to seven years once fully vested after which time the option lapses.

Details of the share options outstanding during the year are as follows:

 
                                       Shares   Weighted Average 
                                                   price (pence) 
---------------------------------  ----------  ----------------- 
 Outstanding at 1 January 2021      7,348,142             253.72 
 Outstanding at 31 December 2021    7,348,142             253.72 
 Exercisable at 31 December 2021    1,450,763             248.72 
 
 Outstanding at 1 January 2022      7,348,142             253.72 
 Granted during the year                    - 
 Outstanding at 30 June 2022        7,348,142             253.72 
 Exercisable at 30 June 2022        1,450,763             248.72 
---------------------------------  ----------  ----------------- 
 

Options outstanding at 30 June 2022 have an exercise price in the range of 2.9p and 778p and a weighted average contractual life of 4 years.

Details of the warrants issued in the period are as follows:

 
 Issued           Exercisable from    Expiry date    Number outstanding   Exercise 
                                                                           price 
---------------  ------------------  -------------  -------------------  --------- 
 27 January                           26 January 
  2022            Anytime until        2024          20,303,030           5.00p 
 27 January                           26 January 
  2022            Anytime until        2024          1,000,000            5.00p 
                                      14 April 
 14 April 2022    Anytime until        2025          9,093,750            4.00p 
---------------  ------------------  -------------  -------------------  --------- 
 
 
                                     Warrants         Weighted 
                                                 Average price 
                                                       (pence) 
-------------------------------  ------------  --------------- 
 
 Outstanding at 1 January 2022     21,914,254             6.80 
 Granted during the period         30,396,780             4.70 
 Exercised during the period      (6,062,500)             5.10 
 Expired during the period        (7,727,272)             5.50 
 Outstanding at 30 June 2022       38,521,262             5.00 
 Exercisable at 30 June 2022       38,521,262             5.00 
-------------------------------  ------------  --------------- 
 

The warrants outstanding at the period end have a weighted average remaining contractual life of 2.1 years. The exercise prices of the warrants are between 4.00 - 7.50p per share.

11. Events after the reporting period

On 2 August 2022, the Company announced that it had come to agreement with the JV partner on the PG-10 and PG-11A hydrocarbon revenue to recognise EUR 1.68 million for the period April 2020 to June 2022.

On 12 August 2022, the Company announced that it had received the first net payment of EUR 650,560 for hydrocarbon revenues for the period April 2020 to December 2021 as announced on 2 August 2022.

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September 13, 2022 02:01 ET (06:01 GMT)

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