REG - Ascent Resources PLC - Investment in US Gas, Oil and Helium Portfolio

Ascent ResourcesAnnouncement

20/12/2024 07:00

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RNS Number : 8450Q  Ascent Resources PLC  20 December 2024

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SECURITIES LAWS. PLEASE SEE THE SECTION ENTITLED "IMPORTANT INFORMATION"
TOWARDS THE END OF THIS ANNOUNCEMENT.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION
(EU) 596/2014 AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM BY
VIRTUE OF THE EU (WITHDRAWAL) ACT 2018 ("MAR"). UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

20 December 2024

Ascent Resources plc

("Ascent" or the "Company")

Investment in US Onshore Gas, Oil & Helium Upstream Portfolio,

Intention to Distribute Further ECT proceeds entitlement & New Strategic
Funding

Ascent Resources Plc (LON: AST) is pleased to announce it has acquired a 49%
interest in American Helium LLC's Utah and Colorado upstream acreage which
includes direct interests in a proportionate share of 119,000 acres of helium
rich oil and gas licenses across the two states. The Company has acquired this
position for a total consideration of US$2.0 million which is to be satisfied
via payment of US$1.75 million in new Ascent shares issued at 5 pence per new
share as well as US$0.25million in cash.

Furthermore, the Company is pleased to announce its intention to undertake a
second distribution to qualifying stakeholders with entitlements to 41% of the
net proceeds to be potentially received by the Company in its significant
Energy Charter Treaty damages claim against the Republic of Slovenia. The
Company is finally also pleased to announce it has raised new proceeds of
US$475,949 through the issue of 7,520,000 ordinary shares at a price of 5
pence per new share, representing a 203% premium to the closing mid price of
1.65 pence as reported on the day before announcement, with warrants attached
as further detailed below alongside a broker option to enable other investors
to participate on the same terms.

Highlights:

o  Acquisition of a 49% direct interest in 119,000 acres of upstream licenses
in Colorado and Utah with 18.2 Bcf of natural gas (with up to 1% helium), 2.79
mmbbls of oil and condensates and 2.34 mmboe of natural gas liquids of
independently certified (APN Energy Consultants LLC Competent Person Report
dated 1 April 2024) Proved Recoverable Reserves (1P), which include PDP, PDNP
and PUD Reserves. The NPV10 of these 1P reserves is estimated in the CPR at in
excess of US$80 million;

o  Intention to distribute an entitlement to qualifying stakeholders with
ring-fenced access to a 41% economic interest entitlement in the net proceeds
to be received by Ascent in the event of positive outcome and payment of award
relating to the Company's significant Energy Charter Treaty damages claim;

o  New fundraising at a significant premium to last closing price, raising
gross proceeds of US$475,949 via the issue of new equity and warrants
subscribed for by existing shareholders.

Andrew Dennan, the Company's Chief Executive Officer, commented:

"We are really excited to acquire a material interest in American Helium's
southern Utah and Colorado acreage, which is adjacent to the GNG plant and gas
gathering system into which we invested earlier this year. Our new investment
into upstream acreage secures Ascent's direct interest in material proven
reserves which has significant behind pipe and step out as well as exploration
upside and gives access to valuable natural gas reserves which can be produced
from high helium producing zones within the acreage.

We are thankful for the support of our existing strategic investors from whom
we have raised US$475,949 in new proceeds as the Company continues to focus on
material opportunities that are thematically consistent in a world focused on
energy security and transition.

Furthermore, we are pleased to be able to announce the Company's intention to
do a further shareholder distribution which will give qualifying stakeholders
the opportunity of having ring-fenced access to a significant portion of the
net proceeds resulting from a successful claim, which as a result will not be
exposed to further changes in the capital structure of the Company."

Acquisition of 49% interest in American Helium LLC's Upstream Acreage

Today, the Company has entered into an agreement to acquire direct interests
in 49% of the oil and gas leases operated by American Helium LLC and held by
their American Helium Colorado LLC and American Helium Utah LLC operating
subsidiaries, which includes a portfolio of producing fields within 119,000
acres of helium rich oil and gas leases in Utah and Colorado. Ascent has
acquired these interests for a total consideration of US$2 million which will
be satisfied $250,000 in cash and the balance of $1,750,000 by Ascent issuing
new shares at a price of 5 pence per new share. Accordingly, the Company will
issue American Helium with 27,650,000 new shares in the Company (the "Vendor
Shares").

The American Helium portfolio has proved (1P) net reserves (inclusive of PDP,
PDNP and PUD reserves) of 18.2 Bcf of natural gas (with up to 1% helium), 2.79
mmbbls of oil and condensate and 2.34 mmbbls of natural gas liquids (APN
Energy Consultants LLC Competent Person Report dated 1 April 2024 prepared
using the standard petroleum engineering practices in conformity with the SPE
Petroleum resources Management System guidelines). The portfolio has
significant behind pipe upside as well as potential step-out and exploration
upside within the acreage, including opportunities to exploit high
helium-bearing zones. The acreage is in the helium rich Paradox Basin and has
up to 1% helium contained within the producible natural gas streams, which is
expected to be monetised through synergistic tie-back and processing at the
GNG Lisbon gas processing plant. The acreage also benefits from having
existing infrastructure in place and an experienced operator which is
principally based out of Houston, Texas as well as in the field. The portfolio
has averaged 3.2 mmscfpd of gross daily natural gas production (net to
American Helium) over the last three months (September to November 2024) and
generated US$331,023 of operating profit (net to American Helium) for the
period of March through to September 2024.

The portfolio includes 25 high graded near term, permitted and very affordable
(budgets ranging from US$10,000 up to US$80,000 per well) work-over candidates
which if executed could significantly boost production. The parties will work
together to evaluate further candidates for well work-over operations as well
as the Operator's inventory of re-entry and new drilling prospects with a view
to finalising a future work program targeting the high helium producing zones
in the Leadville and McCracken formations. The Company looks forward to
providing shareholders with updates on this new investment throughout 2025.

In connection with the Company's acquisition of interests in the American
Helium operated acreage, the Company has also today agreed to issue 22 million
vendor warrants to Mr Humberto Sirvent, the CEO of American Helium and has
today also agreed to issue 5 million vendor warrants to American Helium's
Chairman of the Advisory board, Mr. Michael Pompeo who served in the first
administration
(https://en.wikipedia.org/wiki/First_presidency_of_Donald_Trump#Administration)
of President Trump  as director of the Central Intelligence Agency
(https://en.wikipedia.org/wiki/Director_of_the_Central_Intelligence_Agency)
 (CIA), from 2017 to 2018 and as the 70
(https://en.wikipedia.org/wiki/List_of_secretaries_of_state_of_the_United_States)
(th
(https://en.wikipedia.org/wiki/List_of_secretaries_of_state_of_the_United_States)
) United States Secretary of State
(https://en.wikipedia.org/wiki/List_of_secretaries_of_state_of_the_United_States)
 from 2018 to 2021. The vendor warrants are exercisable at any time within
the next three years by paying a cash exercise price of 5 pence per new vendor
warrant share.

Intention to Distribute ECT Claim Proceeds Entitlement

Further to the Company having now acquired a material interest in a US onshore
portfolio, and further to the distribution completed by the Company earlier
this year, the Company is pleased to announce its intention to conduct a
further entitlement issue to qualifying stakeholders with rights to receive
ringfenced access to the net proceeds received by the Company in the event of
a positive Energy Charter Treaty claim outcome and payment of award by the
Republic of Slovenia. The Company currently retains 100% ownership and control
of its significant ECT claim and further to the distribution earlier this year
retains a 51% economic interest in the net proceeds to be received in the
event of a positive claim outcome. The Company now announces that it intends
to conduct a second distribution with entitlements to up to 41% economic
interest in the net proceeds to be received in the event of a positive claim
outcome. The Company expects to mail a circular to shareholders in due course
and expects the record date to be in January 2025, further updates will be
provided in due course.

New Funding & Broker Option

In support of the Company's move to acquire direct interests in the American
Helium upstream licenses the Company is pleased to announce that it has today
secured new funding of US$475,949 via the issue of new equity at a price of 5
pence per new equity share, representing a 203% premium to yesterday's closing
mid price of 1.65 pence per share. The Company has therefore agreed to issue
7,520,000 new shares to the subscribers (the "Subscriber Shares"). The new
equity has new warrants attached to it equal to three (3) warrants for every
two (2) new equity shares subscribed for which are exercisable at a price of
2.3 pence at any time of the holders choosing within three years by either
paying the cash exercise price or via cashless exercise which would result in
a reduced number of new warrant shares being issued upon exercise.

MBD Partners SA have participated in the Company's fundraising by investing
US$250,000. This participation is a related party transactions under the AIM
Rules for Companies. The directors consider, having consulted with Zeus
Capital the Company's nominated adviser, the terms of these transactions to be
fair and reasonable insofar as its shareholders are concerned. The Company
also announces that it has issued a consultant 1,000,000 shares issued at the
subscription price of 5 pence per new share in lieu of cash for services
rendered between June and November of this year.

In order to provide qualifying Ascent shareholders ("Existing Shareholders")
and other qualified investors with an opportunity to participate on the same
basis as the Subscribers to the Company's fundraising (with the same Placing
Price and identical Warrant entitlement), the Company has granted Novum
Securities Limited a Broker Option over an additional 3,950,000 new Ordinary
Shares (the "Broker Option Shares") (£197,500 or US$250,000 at the Placing
Price). The Broker Option Shares and attached Warrants will be issued under
the Company's existing share authorities.

Existing Shareholders who hold shares in the Company and are on the register
of members as at the close of business on 19 December 2024, will be
prioritised for participation in the Broker Option (other than at the
discretion of Novum and all orders from such Existing Shareholders will be
accepted and processed by Novum on a strictly "First Come, First Served"
basis. The Broker Option has not been underwritten.

The Broker Option may be exercisable by Novum at any time from today, 20
December 2024  to 16.00 p.m. UK time on 30 December 2024, at its absolute
discretion, following consultation with the Company. There is no obligation on
Novum to exercise the Broker Option or to seek to procure subscribers for the
Broker Option Shares. Novum may also, subject to prior consent of the Company,
allocate new Ordinary Shares after the time of any initial allocation to any
person submitting a bid after that time.

Novum may choose not to accept bids and/or to accept bids, either in whole or
in part, on the basis of allocations determined at their discretion (after
consultation with the Company) and may scale down any bids for this purpose on
such basis as Novum may determine.

The Broker Option Shares are not being made available to the public and none
of the Broker Option Shares are being offered or sold in any jurisdiction
where it would be unlawful to do so. No Prospectus will be issued in
connection with the Broker Option.

The Company will announce the results of the Broker Option and the resultant
shares in issue following its close. It is expected that the Vendor Shares,
Subscriber Shares as well as any Broker Option Shares shall be admitted to
trading on AIM on or around 7 January 2025.

 

Enquiries:

 Ascent Resources plc                          Via Vigo Communications

 Andrew Dennan
 Zeus Capital, Nominated Adviser & Broker      0203 829 5000

 James Joyce / James Bavister
 Novum Securities, Joint Broker                0207 399 9400

 Jon Belliss / Colin Rowbury                   Corporatebroking@novumsecurities.com

Qualified Persons Statement

Leonardo Salvadori, a qualified Geologist with over 35 years of relevant
experience in the oil and gas industry and a member of SPE (Society of
Petroleum Engineers) has reviewed this announcement for the purposes of the
current Guidance Note for Mining, Oil and Gas Companies issued by the London
Stock Exchange in June 2009 and in accordance with the Petroleum Resources
Management System (PRMS) issued in June 2018 by the Society of Petroleum
Engineers, the World Petroleum Council, the American Association of Petroleum
Geologists, the Society of Petroleum Evaluation Engineers, the Society of
Exploration Geophysicists (SEG), the Society of Petrophysicists and Well Log
Analysts (SPWLA) and the European Association of Geoscientists & Engineers
(EAGE).

Glossary

Bcf: Billion standard cubic feet

mmbbls: million barrels

mmboe: million barrels of oil equivalent

mmscfd: million standard cubic feet per day

bopd: barrels of oil per day

boepd: barrels of oil equivalent per day

PDP: Proved Developed Producing Reserves

PDNP: Proved Developed Non Producing Reserves

PUD: Proved Undeveloped Reserves

Reserves: Reserves are those quantities of petroleum that are anticipated to
be commercially recoverable by application of development projects to known
accumulations from a given date forward under defined conditions. Reserves
must further satisfy four criteria, based on the development project(s)
applied: discovered, recoverable, commercial and remaining (as of the
evaluation date).

P1 Reserves: Include PDP, PDNP and PUD Reserves

 

IMPORTANT INFORMATION

This announcement includes "forward-looking statements" which include all
statements other than statements of historical fact, including, without
limitation, those regarding the Company's financial position, business
strategy, plans and objectives of management for future operations, or any
statements preceded by, followed by or that include the words "targets",
"believes", "expects", "aims", "intends", "will", "may", "anticipates",
"would", "could" or similar expressions or negatives thereof. Such
forward-looking statements involve known and unknown risks, uncertainties and
other important factors beyond the Company's control that could cause the
actual results, performance or achievements of the Group to be materially
different from future results, performance or achievements expressed or
implied by such forward-looking statements. Such forward-looking statements
are based on numerous assumptions regarding the Company's present and future
business strategies and the environment in which the Company will operate in
the future. These forward-looking statements speak only as at the date of this
document. The Company expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Company's expectations with
regard thereto or any change in events, conditions or circumstances on which
any such statements are based unless required to do so by applicable law or
the AIM Rules.

Nothing contained herein shall be deemed to be a forecast, projection or
estimate of the future financial performance of the Company or any other
person.

This announcement is not for release, publication or distribution, in whole or
in part, directly or indirectly, in or into Canada, Japan or the Republic of
South Africa or any jurisdiction into which the publication or distribution
would be unlawful. This announcement is for information purposes only and does
not constitute an offer to sell or issue or the solicitation of an offer to
buy or acquire shares in the capital of the Company in Canada, Japan, New
Zealand, the Republic of South Africa or any jurisdiction in which such offer
or solicitation would be unlawful or require preparation of any prospectus or
other offer documentation or would be unlawful prior to registration,
exemption from registration or qualification under the securities laws of any
such jurisdiction.

This announcement is not for publication or distribution, directly or
indirectly, in or into the United States of America.  This announcement is
not an offer of securities for sale into the United States.  The securities
referred to herein have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in the
United States, except pursuant to an applicable exemption from registration.
No public offering of securities is being made in the United States.

 

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