Ascent Shares Surge on Gas Deal

Shares in Ascent Resources surged August 1 to a high of 1.4 pence on news that it has signed the conditional agreements necessary to allow commercial gas production in Slovenia to start as early as January 2017.

The new route to market uses an existing production pipeline from the Petisovci field in Slovenia to the Croatian border where the raw gas will be sold, Ascent said .This route means there is no need for the integrated pollution prevention and control (IPPC) permit.  No further regulatory approvals are required for gas production to start. Additionally, the funding required to start is materially lower than would be the case if it were required to construct a new treatment facility in Slovenia, it said.

Ascent's Slovenia asset (Credit: Ascent)

Ascent has agreed to buy the company that owns access to a key section of pipeline in Slovenia in return for the issue of up to 75mn new Ascent shares plus options over a further up to 7.5mn shares at a price of 2 pence each. A general meeting has been called to vote on the matter in three weeks. Without this deal, access to Croatia by early next year will be impossible or a lot more expensive.

CEO Colin Hutchinson said: "These agreements mark a major step forward for the company. For the first time we have a direct route to sell our gas without relying on further Slovenian permitting. Additionally, given the materially lower investment required now to achieve first gas, the short term economics of the Petisovci project are much more attractive."

Independent auditors have put the P50 gas in place estimate at 13bn m³.

William Powell