TIDMAST
RNS Number : 1351K
Ascent Resources PLC
19 September 2016
Ascent Resources plc / Epic: AST / Index: AIM / Sector: Oil and
Gas
Ascent Resources plc
("Ascent" or "the Company")
Interim results for the period ended 30 June 2016
Ascent Resources plc, the AIM quoted European oil and gas
exploration and production company is pleased to report its interim
results for the six months ended 30 June 2016.
Highlights:
-- Raised GBP1.5million in new equity through three placings.
-- Loan note conversions have reduced the cash owed on
convertible loan notes by GBP2.8 million in six months.
-- Administrative expenses reduced by (33%) to GBP676k compared with the same period in 2015.
-- Preliminary approach from Cadogan Petroleum plc highlighting
the potential value of the asset.
-- Colin Hutchinson appointed as permanent CEO.
Post Period Highlights:
-- Gas sales agreement signed with INA-Industrija Nafte d.d.
giving a confirmed route to market independent of the IPPC
Permit.
-- Alternative route agreements implemented - cheaper and
quicker than the construction of a new gas treatment facility.
-- Acquisition of Trameta d.o.o guaranteeing access to key
pipeline infrastructure required for the alternative route.
-- Export pipeline has been successfully tested to the proposed operating pressure.
-- First gas sales revenue expected by early 2017.
Colin Hutchinson, CEO of Ascent, commented:
"Progress to date has made 2016 one of the most significant
years in the history of the Company. Following the signing of the
INA gas sales agreement we can look forward to delivering gas
revenue in early 2017".
Enquiries:
Ascent Resources plc
Clive Carver, Chairman
Colin Hutchinson, CEO 0207 251 4905
Stockdale Securities Limited,
Nominated Adviser
Richard Johnson
Edward Thomas 0207 601 6100
Northland Capital Partners
Limited (Joint Broker)
Tom Price 020 3861 6625
IFC Advisory Ltd, Financial
PR and IR
Graham Herring
Tim Metcalfe
Heather Armstrong 0203 053 8671
Chairman's statement
Ascent presents its unaudited results for the six months ended
30 June 2016.
I am pleased to be able to issue our first report where we have
a clear, short route to first gas production and income. On
commencement of commercial production of gas from the Petišovci
field Ascent will retain 90% of revenues from hydrocarbons until
the full EUR42 million costs expended to date have been
recovered.
First gas
In July 2016 we announced an agreement between the Petišovci
project partners and INA. Under this agreement natural gas with
excess water removed but otherwise untreated will be sold to INA at
the Croatian border, some 5 kilometres from the Petišovci field.
This was made possible by the re-commissioning of existing
pipelines in Slovenia and the construction of 75 kilometres of new
pipelines in Croatia to connect the Petišovci field with a Croatian
treatment facility in Molve.
We also entered an agreement with the owner of Trameta to
acquire the company and its rights over the first section of the
Slovenian pipeline. Following the acquisition of Trameta, the
existing Slovenian section of gas pipeline has been successfully
tested to the optimal operating pressure without the need for any
rectification work. The documentation to recertify the line has
been submitted to the Ministry of Infrastructure in Ljubljana.
The remaining work required to commence production primarily
consists of completing a short pipeline connecting the export
pipeline to the pipeline from the CPP, the refurbishment of an
existing gas separation facility (CPP) and working over the
existing wells to ready them for production.
We hope to carry out the first test production in late Q4 2016
with commercial production commencing in Q1 2017.
In anticipation of the agreement with INA, Ascent has in the
past few months raised GBP1.5 million by way of new shares issues.
Additionally, some GBP2.8 million of Loan Notes have been converted
into shares, thereby reducing the indebtedness of the Company.
There remains GBP8.2 million due on the 2013 & 2014
Convertible Loan Notes which are due for redemption on 19 November
2016. The Company has entered into discussions with the majority
note holder with a view to extending their term.
To assist the Company with its future plans we have appointed
Northland Capital Partners as joint broker with immediate
effect.
IPPC Permit
In May 2016 the Company received the unexpected decision of the
Administrative Court to revoke the IPPC Permit to allow the Joint
Venture to construct its own processing plant in Slovenia. The
Company remains of the view that constructing a processing plant in
Slovenia remains the most economic solution for both the Company
and the Country and will continue to work to resolve this issue. If
this issue cannot be resolved through dialogue the Company reserves
the right to progress the issue through the Slovenian and European
Courts.
Outlook
The opportunity at Petišovci remains as strong as ever. Despite
the prolonged delays Ascent still has a 75% economic interest in
the Petišovci field, which has a net present value, including Phase
2 of some EUR200 million based on management estimates.
With 90% of revenues coming preferentially to Ascent to cover
historic costs to date of some EUR42 million and without the
immediate obligation to construct a new Slovenian treatment works
the cash flows of the company should materially strengthen during
2017.
The performance of the Phase 1 wells during 2017 will also be
important in assessing the terms of project financing when we come
to develop the much larger Phase 2 of the Petišovci project.
I would like to take this opportunity to thank shareholders for
their patience and understanding during the past few years and look
forward to bringing the first two wells on stream from Petišovci in
the near future.
Clive Carver
Non-executive Chairman
Consolidated Income Statement
for the Period ended 30 June 2016
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
Notes GBP '000s GBP '000s GBP '000s
Administrative expenses 2 (676) (1,011) (1,888)
Loss from operating activities (676) (1,011) (1,888)
Finance income 3 153 1 745
Finance cost 3 (821) (1,674) (2,501)
----------- ----------- ------------
Net finance costs (668) (1,673) (1,756)
Loss before taxation (1,344) (2,684) (3,644)
Income tax expense - - -
----------- ----------- ------------
Loss for the period (1,344) (2,684) (3,644)
Loss per share
Basic & fully diluted
loss per share (Pence)
* 4 0.52 3.48 4.13
* as restated for the capital reorganisation in November 2015
which effectively reduced shares in issue by a factor of 20.
Consolidated Statement of Comprehensive Income
for the Period ended 30 June 2016
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
GBP '000s GBP '000s GBP '000s
Loss for the period (1,344) (2,684) (3,644)
Other comprehensive income
Foreign currency translation
differences for foreign
operations 2,293 (1,809) (1,059)
Total comprehensive gain
/ (loss) for the period 949 (4,493) (4,703)
Consolidated Statement of Changes in Equity
for the Period ended 30 June 2016
Share Share Equity Share Translation Retained Total
capital premium reserve based reserve earnings
payment
reserve
GBP '000s GBP '000s GBP '000s GBP '000s GBP '000s GBP '000s GBP '000s
Balance at 1 January 2015 1,459 55,911 2,576 861 (1,746) (38,613) 20,448
Loss for the period - - - - - (2,684) (2,684)
Currency translation
differences - - - - (1,809) - (1,809)
Total comprehensive income - - - - (1,809) (2,684) (4,493)
Issue of shares during
the period net of costs 275 250 - - - - 525
Extinguishment of convertible
loan notes - - (2,576) - - 2,576 -
Extension of convertible
loan notes - - 1,910 - - - 1,910
Share-based payments and
expiry of options - - - 73 - - 73
Balance at 30 June 2015 1,734 56,161 1,910 934 (3,555) (38,721) 18,463
------------------------------ ---------- ---------- ---------- ---------- ------------ ---------- ----------
Balance at 1 January 2015 1,459 55,911 2,576 861 (1,746) (38,613) 20,448
Loss for the period - - - - - (3,644) (3,644)
Currency translation
differences - - - - (1,059) - (1,059)
Total comprehensive income - - - - (1,059) (3,644) (4,703)
Extinguishment of convertible
loan notes - - (4,586) - - 4,586 -
Extension of convertible
loan notes - - 3,582 - - - 3,582
Conversion of loan notes 4 1 - - - - 5
Issue of shares during
the period net of costs 415 781 - - - - 1,196
Share-based payments and
expiry of options - - - (378) - 524 146
Balance at 31 December
2015 1,878 56,693 1,572 483 (2,805) (37,147) 20,674
------------------------------ ---------- ---------- ---------- ---------- ------------ ---------- ----------
Balance at 1 January 2016 1,878 56,693 1,572 483 (2,805) (37,147) 20,674
Loss for the period - - - - - (1,344) (1,344)
Currency translation
differences - - - - 2,293 - 2,293
Total comprehensive income - - - - 2,293 (1,344) 949
Conversion of loan notes 565 2,260 (369) - - 369 2,825
Issue of shares during
the period net of costs 405 1,010 - - - - 1,415
Share-based payments and
expiry of options - - - 83 - - 83
Balance at 30 June 2016 2,848 59,963 1,203 566 (512) (38,122) 25,946
------------------------------ ---------- ---------- ---------- ---------- ------------ ---------- ----------
Consolidated Statement of Financial Position
As at 30 June 2016
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
Assets Notes GBP '000s GBP '000s GBP '000s
Non-current assets
Property, plant and equipment 4 2 3
Exploration and evaluation
costs 5 35,214 31,455 32,711
----------- ----------- ------------
Total non-current assets 35,218 31,457 32,714
Current assets
Trade and other receivables 23 142 61
Cash and cash equivalents 860 239 32
----------- ----------- ------------
Total current assets 883 381 93
Total assets 36,101 31,838 32,807
=========== =========== ============
Equity and liabilities
Attributable to the equity
holders of the Parent
Company
Share capital 7 2,848 1,734 1,878
Share premium account 59,963 56,161 56,693
Equity reserve 1,203 1,910 1,572
Share-based payment reserve 566 934 483
Translation reserves (512) (3,555) (2,805)
Retained earnings (38,122) (38,721) (37,147)
----------- ----------- ------------
Total equity 25,946 18,463 20,674
----------- ----------- ------------
Non-current liabilities
Provisions 434 370 386
Total non-current liabilities 434 370 386
Current liabilities
Trade and other payables 297 535 508
Borrowings 6 9,424 9,691 11,239
Other current liabilities - 2,779 -
----------- ------------
Total current liabilities 9,721 13,005 11,747
Total liabilities 10,155 13,375 12,133
----------- ----------- ------------
Total equity and liabilities 36,101 31,838 32,807
=========== =========== ============
Consolidated Statement of Cash Flows
for the six months ended 30 June 2016
6 months 6 months Year ended
ended ended 31 December
30 June 30 June
2016 2015 2015
Unaudited Unaudited Audited
GBP '000s GBP '000s GBP '000s
Cash flows from operations
Loss after tax for the
period (1,344) (2,684) (3,644)
DD&A charge - - (1)
Decrease/ (increase)
in receivables 38 (44) 37
(Decrease in payables (211) (112) (222)
Increase in share based
payments 83 73 146
Exchange differences (8) 30 36
Finance income (153) (1) (745)
Finance cost 821 1,674 2,501
Net cash used in operating
activities (774) (1,064) (1,892)
----------- ----------- -------------
Cash flows from investing
activities
Interest received - 1 1
Payments for investing
in exploration 5 (158) (174) (661)
Purchase of property, (1) - -
plant and equipment
Net cash used in investing
activities (159) (173) (660)
----------- ----------- -------------
Cash flows from financing
activities
Interest paid and other
finance fees - (1) (18)
Proceeds from loans 350 500 950
Loan issue costs (6) (1) -
Proceeds from issue
of shares 1,455 550 1,252
Share issue costs (40) (25) (56)
Net cash generated from
financing activities 1,759 1,023 2,128
----------- ----------- -------------
Net increase in cash
and cash equivalents
for the period 826 (214) (424)
Effect of foreign exchange
differences 2 (3) -
Cash and cash equivalents
at beginning of the
period 32 456 456
Cash and cash equivalents
at end of the period 860 239 32
=========== =========== =============
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 2015 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 will be applied
in the Group's statutory financial statements for the year ended 31
December 2016 and were applied in the Group's statutory financial
statements for the year ended 31 December 2015.
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
2016 and 30 June 2015 is unaudited and does not constitute
statutory financial information. The comparatives for the full year
ended 31 December 2015 are not the Group's full statutory accounts
for that year. The information given for the year ended 31 December
2015 does not constitute statutory financial statements as defined
by Section 435 of the Companies Act. The statutory accounts for the
year ended 31 December 2015 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 and included
an emphasis of matter drawing attention to the importance of
disclosures made in the annual report regarding going concern. 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.
During June 2016 the Company raised GBP1 million (GBP977,500 net
of costs) in two separate equity placings. These funds are
sufficient to fund current trading obligations of the Company until
Q1 2017.
On 1 August 2016 the Company announced that it had signed a gas
sales agreement with INA, Croatia's leading Oil & Gas Company,
to sell joint venture gas production at the Croatian border.
Additional funds will be required to complete the capital programme
required in order to make existing wells and facilities ready for
production however there is currently no committed expenditure in
relation to this programme.
Additionally, the Company has GBP8.2million of convertible loan
notes currently due for redemption on 19 November 2016. While the
share price is currently significantly above the conversion price
there can be no guarantee that all of the notes will have converted
by the redemption date.
As such the Company will require further funding to finance the
capital programme in Slovenia and repay the loan notes as they fall
due. The Directors have a range of different options including, but
not limited to, new borrowings or new equity placings. 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.
The Directors, however, remain confident of the Group's ability
to operate as a going concern given the signing of agreements which
give the Company a clear route through to first gas and in light of
the significant recent support from new and longer term
shareholders.
Liquidity and Capital Resources:
The Company continues to be an emerging business and currently
has no production cash flows; consequently, it manages its working
capital and liquidity position by balancing the timing of critical
expenditure with available funds. Further information on future
funding arrangements and the Directors' assessment of the Group's
going concern position is set out above.
Principal Risks and Uncertainties:
The principal risks and uncertainties affecting the business
activities of the Group remain those detailed on pages 50-52 of the
Annual Review 2015, a copy of which is available on the Company's
website at www.ascentresources.co.uk.
2. Operating loss is stated after charging
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
GBP '000s GBP '000s GBP '000s
Employee costs 277 397 702
Termination payments - - 279
Share based payment charge 83 73 147
Foreign Exchange differences (1) - 3
Included within Admin
Expenses
Audit Fees 25 26 59
Fees payable to the company's
auditor for other services - - 3
----------- ----------- ------------
25 26 62
3. Finance income and costs recognised in loss
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
GBP '000s GBP '000s GBP '000s
Finance income
Income on bank deposits - 1 1
Foreign exchange movements
realised - - 3
Other income 153 - -
Gain on EnQuest liability
restructuring - - 741
153 1 745
=========== =========== ============
Finance cost
Interest payable on borrowings (814) (624) (1,451)
Bank Charges (8) (1) (5)
Unwinding of EnQuest liability - (186) (186)
Foreign exchange movements
realised 1 (9) (3)
Loss on extinguishment
of loan notes - (854) (856)
(821) (1,674) (2,501)
=========== =========== ============
The liability written off represented a creditor dating back
more than five years which the Company no longer deems to be
payable.
Convertible loan notes were restructured during the prior
periods and a full commentary is contained within the audited
financial statements for the year ended 31 December 2015 and are
available at www.ascentresources.co.uk.
4. Loss per share
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
GBP '000s GBP '000s GBP '000s
Result for the period
Total loss for the
period attributable
to equity shareholders 1,344 2,684 3,644
Weighted average Number Number Number
number of ordinary
shares
For basic earnings
per share 258,096,858 77,060,955 88,160,768
Loss per share (Pence) 0.52 3.48 4.13
The weighted average number of shares for six months ended 30
June 2015 has been adjusted for the share consolidation. The
previously presented total was 1,514,219,096 which equated to
77,060,955 as if the share consolidation had taken place at the
start of 2015.
Potential shares to be issued are antidilutive so the basic
earnings per share is equivalent to the diluted earnings per
share.
5. Exploration and Evaluation Costs
Exploration Costs Slovenia Total
Cost
At 1 January 2015 33,166 33,166
Additions 174 174
Effects of exchange rate
movements (1,885) (1,885)
At 30 June 2015 31,455 31,455
--------- --------
At 1 July 2015 31,455 31,455
Additions 487 487
Effects of exchange rate
movements 769 769
At 31 December 2015 32,711 32,711
--------- --------
At 1 January 2016 32,711 32,711
Additions 144 144
Effects of exchange rate
movements 2,345 2,345
At 30 June 2016 35,200 35,200
--------- --------
Carrying value
At 30 June 2016 35,200 35,200
--------- --------
At 31 December 2015 32,711 32,711
--------- --------
At 30 June 2015 33,166 33,166
--------- --------
6. Borrowings
2016 2015 2015
Unaudited Unaudited Audited
GBP '000s GBP GBP
'000s '000s
Current
Short term loan facility 838 - 461
Convertible loan notes 8,586 9,691 10,778
9,424 9,691 11,239
----------- ----------- ------------
Convertible Loan Note 30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
GBP '000s GBP GBP
'000s '000s
Liability brought forward 10,778 9,624 9,624
Interest expense 786 624 1,346
Convertible loan notes drawn
in the period - 500 500
Modification to convertible loan
notes - de-recognition (Feb 2015) - (9,983) (9,983)
Modification to convertible loan
notes - recognition of amended
loan notes (Feb 2015) - 8,930 8,930
EnQuest debt restructured into
loan notes - - 1,937
Modification to convertible loan
notes - de-recognition (Nov 2015) - - (12,021)
Modification to convertible loan
notes - recognition of amended
loan notes (Nov 2015) - - 10,449
Other movements (153) - -
Conversion of 2013 & 2014 Convertible
Loan Notes (2,825) (4) (4)
Liability carried forward 8,586 9,691 10,778
----------- ----------- ------------
Conversion of loan Shares Principal Interest Total
notes during the issued
period
Number GBP GBP GBP
07 April 2016 9,199,293 81,681 10,312 91,993
14 April 2016 12,218,647 108,490 13,696 122,186
14 April 2016 28,156,159 250,000 31,562 281,562
14 April 2016 20,731,493 184,076 23,239 207,315
25 April 2016 38,533,398 342,140 43,194 385,334
04 May 2016 23,786,327 211,200 26,663 237,863
17 May 2016 22,524,931 200,000 25,249 225,249
06 June 2016 99,334 882 111 993
13 June 2016 46,176,109 410,000 51,761 461,761
13 June 2016 46,176,109 410,000 51,761 461,761
21 June 2016 5,862,153 55,112 3,510 58,622
21 June 2016 29,078,558 258,190 32,596 290,786
Total for the period
to 30 June 2016 282,542,511 2,511,771 313,654 2,825,425
7. Share Capital
# Ordinary Nominal Share
Shares Share Capital
Price GBP
(Pence)
----------------------------- ---------------- --------- ----------
1st January 2015
Opening Balance 1,458,507,909 0.10 1,458,508
Conversions to 30
June 2015 611,550 0.10 612
May 2015 Placing
- PrimaryBid 275,000,000 0.10 275,000
------------------------------ ---------------- --------- ----------
Balance at 30 June
2015 1,734,119,459 0.10 1,734,119
Conversions from 1 July
2015 to 30 November 2015 2,991,304 0.10 2,991
Impact of capital
re-organisation (1,650,255,216)
November 2015 Placing 70,350,000 0.20 140,700
Conversions from 1 December
'15 to 31 December '15 101,362 0.20 203
------------------------------ ---------------- --------- ----------
Balance at 31 December
2015 157,306,909 1,878,014
Being:
Ordinary shares 157,306,909 0.20 314,614
Deferred shares 1,737,110,763 0.09 1,563,400
----------
1,878,014
Balance at 1 January
2016 157,306,909 1,878,014
April 2016 Placing
- Primary Bid 35,714,285 0.20 71,429
June 2016 Placing
- PrimaryBid 83,333,333 0.20 166,667
June 2016 Placing
- Henderson 83,333,333 0.20 166,667
Conversions in the
period 282,542,511 0.20 565,085
------------------------------ ---------------- --------- ----------
Balance at 30 June
2016 642,230,371 2,847,860
Being:
Ordinary shares 642,230,371 0.20 1,284,461
Deferred shares 1,737,110,763 0.09 1,563,400
----------
2,847,860
In total 484,923,471 new ordinary shares were issued during the
period in three equity placings and a number of loan note
conversions which are detailed in note 6 above.
On 7 April 2016 the Company raised GBP500,000 (GBP477,500 net of
costs) via the placing of 35,714,285 new ordinary shares of
0.2pence each in the Company at a price of 1.4pence per placing
share with investors using the PrimaryBid platform.
On 1 June 2016 the Company raised GBP500,000 (GBP477,500 net of
costs) via the placing of 83,333,333 new ordinary shares of
0.2pence each in the Company at a price of 0.6pence per placing
share with investors using the PrimaryBid platform.
On 7 April 2016 the Company raised GBP500,000 (GBP500,000 net of
costs) via the placing of 83,333,333 new ordinary shares of
0.2pence each in the Company at a price of 0.6pence per placing
share to Henderson Global Investors.
These funds have been used to confirm the alternative route to
market and to begin planning and ordering of equipment for the
connection of our existing wells and the refurbishment of
processing facilities.
8. Events subsequent to the end of the reporting period
On 1 August 2016 the Company reported that, together with our
Slovenian partners, it had signed the conditional agreements
necessary to allow commercial gas production to commence as early
as January 2017.
The Company and its Slovenian partners have negotiated a gas
sale and purchase agreement with INA, Croatia's leading oil &
gas company, which will enable the Joint Venture to sell untreated
gas, within our partner's production systems, at the Slovenian /
Croatian border.
The Company also announced the signing of a condition sale and
purchase agreement to acquire 100% of Trameta doo. a company which
owns access to a key section of pipeline in Slovenia in return for
the issue of up to 75 million Consideration Shares plus Options
over a further up to 7.5 million Subscription Shares.
On 22 August 2016 the resolutions necessary to approve these
agreements were approved by shareholders.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR VVLFFQKFXBBK
(END) Dow Jones Newswires
September 19, 2016 02:00 ET (06:00 GMT)
Ascent Resources (LSE:AST)
Historical Stock Chart
From Mar 2024 to Apr 2024
Ascent Resources (LSE:AST)
Historical Stock Chart
From Apr 2023 to Apr 2024
