(Correcting the price per share issued under the placing.)
LONDON (Alliance News) - Ascent Resources PLC shares lost almost a third in value on Wednesday after Ascent conducted a discounted placing that only raised enough funds to keep the company going until the end of September.
The company conducted the share placing through online funding platform Primarybid.com, issuing 83.3 million new shares priced at 0.6 pence each, more than a 29% discount to the company's closing share price on Tuesday.
Ascent shares were trading down 29% at that 0.60p price on Wednesday.
The shares issued represent around 19.3% of the company's enlarged issued share capital, and the funds raised will keep the company going only until later this year, with Ascent hoping to find a solution to the problems it has encountered trying to secure a integrated pollution prevention & control permit (IPPC) for the gas treatment plant it wants to build in Slovenia.
"These funds will meet the expected working capital requirements of the company until the end of the third quarter of 2016 and enable the company to order certain long-lead items required for the alternative route to market," said Ascent.
"We have again found PrimaryBid a very effective way to raise funds by tapping into investor demand that we may not otherwise have been aware of. The funds raised today will enable the company to continue to order the long-lead items required to bring the Petisovci field into production," added Colin Hutchinson, chief executive of the company.
Ascent is determined to accomplish its goal of delivering gas in 2016 from the field in Slovenia through an alternative route to market that is independent of the traditional IPPC application process because it believes it is "cheaper and quicker".
New regulations were introduced in Slovenia after Ascent applied for the IPPC, resulting in the Administrative Court sending the application back to the Slovenian Environment Agency arguing the application needed to take into account the new regulations that had been brought into force.
The court found no fault with Ascent's application, and the company does not agree that the application had to be changed because the new regulations state applications that were already submitted would be exempt.
"The current position is that we have been informed that Slovenian Environment Agency will request that the joint venture partners carry out a preliminary screening procedure under the new [regulatory] process. This procedure would then be reviewed by Slovenian Environment Agency to determine whether a full environmental impact assessment is required," said Ascent on Wednesday.
"Ascent does not intend to perform a repetitive preliminary screening or an environmental impact assessment as the original application to the Slovenian Environment Agency and the Environment Minister had been approved. To repeat these reviews and assessments would not add to the Slovenian Environment Agency's understanding of the nature of the project and is therefore unnecessary and time-consuming bureaucracy," Ascent added.
Ascent has been advised that it can appeal to a higher court in Slovenia in the hope that an alternative court will "come to a conclusion more consistent with Slovenian law" and said it also believes it has grounds to claims damages against the government. Ascent plans to "pursue every available avenue for redress," it said.
"Nevertheless, the company still views the installation of a gas processing plant in Slovenia as a long-term route to market and hopes that this can be achieved without undue delay," said the company.
As Ascent attempts to take an alternative route to market, the company said it has agreed one of two legal requirements required to start delivering gas this year.
"In the past few days one of the two legal agreements required to progress this route has been agreed by the project team and is now with the various boards of the entities concerned for formal approval. The second agreement is at an advanced stage and the expectation of the project group is that it will be approved before the end of June," the company said.
Ascent said the agreements mean it will be able to begin commercial gas sales in 2016, but was not more specific about when this might start. However, the company has begun to issue purchase orders for some of the longer-lead items - such as a drilling rig that requires relocation - required to commence production using the funds raised from the Primarybid placing revealed Wednesday.
Although Ascent and its partners on the Petisovci field are managing to move forward despite the ongoing issues with the IPPC, the project group have issued a Slovenian press release to "illustrate the damage that the Administrative Court has inflicted on Slovenia and on investors in the project".
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Ascent Resources (AST)