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(Alliance News) - Ascent Resources PLC on Thursday said it has reviewed its portfolio of oil and gas assets in Slovenia and plans to serve a formal notice of dispute against the state.
Energy and natural resources firm Ascent centred its main activity around the exploration and production of oil and gas in Slovenia and the Petisovci Tight gas project, having invested EUR50 million in the project thus far.
Ascent believes it and its joint venture partners in Petisovci have been forced to conduct an unnecessary environmental impact assessment in order to conduct well stimulation work at the project. It is appealing the Slovenian Environment Ministry's decision to require the assessment.
Over the past two months, Ascent has assessed its Slovenian portfolio in terms of its economics - given falling gas prices in Europe - and begun a review of the project's technical aspects, including the potability that further stimulation is likely to "materially and sustainably increase production levels" and the cost of this stimulation.
Ascent has also talked with its local partners, exploring possible new structures and commercial arrangements for the joint venture.
The firm also looked into recent changes that have been introduced by the new government in Slovenia and has become more confident that permits for further stimulation will be granted.
An external legal review of a possible legal claim against the Slovenian state was completed and found that while the claim has some risks and is not certain at the moment, it does appear to have a valid legal basis. As such, the firm has engaged external counsel to prepare the legal claim with the goal of serving a formal notice of dispute. A full-time in-house lawyer has been appointed to support this.
The firm has also contracted a consultancy team with no prior involvement in the asset to review historic stimulation data at Petisovci and design a detailed stimulation programme so that equipment can be procured without delay once permits are obtained.
There are a series of inherited outstanding payable amounting to around EUR200,000 to the joint venture partner from activities in 2019 that are under negotiation and may cause a "temporary contractual default".
A specific proposal has been submitted to joint venture partners in Solvenia for a joint venture structure that is "cost-effective and industry-standard" and includes "a proposed solution for the outstanding balances".
Shares in Ascent ended 3.0% higher at 2.96 pence in London on Thursday.
By Anna Farley; annafarley@alliancenews.com
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