Ascent Resources Regulatory News (AST)

Ascent Resources plc

("Ascent" or the "Company")

Board Changes, Fundraising, Debt Restructuring, Share Consolidation and Subdivision

14 February 2020

Ascent Resources Plc (LON: AST) the onshore European independent oil and gas exploration and production company, announces a corporate restructuring, including board changes, a proposed placing, share consolidation and subdivision and restructuring of the Company's balance sheet.

The issue of equity is conditional, inter alia, on the approval by shareholders of resolutions to provide authority to the Directors to issue and allot adequate new ordinary shares on a non-pre-emptive basis and a re-organisation of the share capital at a general meeting to be convened by the Company.

Highlights:

·; James Parsons proposed to join Ascent as Executive Chairman.

·; Louis Castro, Chairman, and Colin Hutchinson, Finance Director, to step down from the Board at the forthcoming GM.

·; Immediate cancellation of Equity Sharing Agreement with RiverFort Global Opportunities PCC Limited. 

·; Conversion of outstanding US$421,943 loan into a two-year zero-coupon bullet payment loan convertible at 0.075 pence per share when share price exceeds 0.1 pence per share for more than 5 days.

·; Share re-organisation, including a consolidation, to take place to allow new funds to be raised, this will effectively reduce the number of shares currently in issue by a factor of 100.

·; Gross proceeds of £800,000 raised at 5 pence per share post consolidation (effectively 0.05 pence pre-consolidation).

·; Ewen Ainsworth and Leonardo Salvadori proposed to join Ascent as Independent Non-Executive Directors.

James Parsons, proposed Executive Chairman, commented: "As the oil and gas industry moves deeper into this period of profound change driven by the energy transition, quality opportunities present themselves for nimble, well-financed micro-cap platforms.

Ascent, with its underpinning Slovenian potential, restructured balance sheet and new team, is an ideal platform for growth combining access to capital with the very best pre-identified near-term upstream opportunities and special situations."

Louis Castro, outgoing Non-Executive Chairman, commented: "I am pleased that James, as the new Chairman, in addition to new members of the management team are stepping in to take Ascent forward, with a strategy focused on developing new areas to focus and grow the company while continuing to work to realize the value of Slovenia."

Proposed Board Changes:

Ascent will appoint James Parsons as Executive Chairman following satisfactory completion of regulatory due diligence. James has a wealth of corporate and transactional experience on AIM and a demonstrated ability to access capital to fund junior resource plays. He is Executive Chairman of Regency Mines plc and Non-Executive Chairman of Echo Energy plc and Coro Energy plc.

Ascent will also, subject to completion of regulatory due diligence, appoint Ewen Ainsworth and Leonardo Salvadori as independent Non-Executive Directors. Ewen Ainsworth is an experienced AIM company director, who has worked in a variety of senior and board-level roles in the international natural resource sector for over 30 years, most recently as Finance Director for San Leon Energy plc and previously Gulf Keystone Petroleum Limited. He is currently a non-executive director at Regency Mines plc, CEO of Discovery Energy Limited, an advisory, consultancy and Investment Company and Non-Executive Chairman at Nostra Terra Oil and Gas Company plc. Leonardo Salvadori has over 35 years of operational and technical oil and gas experience initially with ENI and Danagas. He is currently the Managing Director for Coro Energy plc in Italy.

Arrangements with RiverFort Global Opportunities PCC Limited:

The existing Equity Sharing Agreement announced on 20 September 2019 has been cancelled with immediate effect.

The outstanding US$421,943 loan with Riverfort has been re-negotiated to a two-year coupon free bullet with conversion rights for the lender at 0.075 pence per share (150% of the placing price). No conversion can occur until the share price exceeds 0.1 pence per share (200% of the placing price) for five consecutive days. The Company has a right to buy out up to 50% of the loan prior to its expiry at nil premium whilst the share price is below the conversion price. If the Company does exercise this right, then the conversion price is adjusted upwards to 0.0875 (175% of the placing price).

The 43 million warrants initially to be awarded to Riverfort, as announced on 20 September 2019, will no longer be awarded.

Capital Reorganisation and Share Consolidation

The Company's Ordinary Shares are currently trading at below nominal value. The Company is not permitted by law to issue shares at an issue price below their nominal value. Consequently, the Company proposes a capital reorganisation whereby each existing ordinary share of 0.2p nominal value is subdivided into one redenominated ordinary share of 0.005p and a deferred share of 0.195p, and a consolidation of the redenominated shares by a factor of 100 to 1.

Following the consolidation, the Company will have 30,196,484 Ordinary Shares in issue, each with a nominal value of 0.5 pence. The Directors consider that it is in the best interests of the Company's long-term development as a publicly quoted company to have a smaller number of shares in issue and a higher share price. Furthermore, a consequence of having a very large number of shares in issue, with a very low market share price, is that small share trades can result in large percentage movements in the market share price which results in considerable share price volatility. The Board also believes that the bid-offer spread on shares priced at low absolute levels can be disproportionate to the market share price, to the detriment of Shareholders.

 As set out in the Notice of General Meeting Circular, shareholders will be asked to consider, and if thought fit, pass resolutions which will have the following effect: that every 100 ordinary shares of 0.2 pence on the Record Date are consolidated into one new ordinary share of 0.5 pence each, (the "Consolidation").

As the expected issued share capital of the Company is not divisible by 100 without leaving a fraction of a share following the Reorganisation, it is intended to conditionally issue and allot, subject to approval of the Reorganisation by shareholders at the General Meeting, 30,196,484 new Ordinary Shares on the Record Date. The issued share capital of the Company as at the Record Date will therefore be 30,196,484 Ordinary Shares.

Fundraising

Ascent has proposed to raise £800,000 (£720,000 net) by way of a placing of 16,000,000 new ordinary shares in the Company at a price of 5 pence per share post consolidation ("the Placing" and the "Placing Shares"). This is equivalent to 1,600,000,000 shares at 0.05p pre consolidation.

The issuance of the Placing Shares is conditional upon, inter alia, the passing of resolutions to be put to shareholders of the Company at a general meeting of the Company to be held on 5 March 2020 ("the GM") to provide authority to the Directors to issue and allot the required shares on a non-pre-emptive basis and the reorganisation of the share capital to address the share price of the Company being below the nominal value of the ordinary shares. A circular, containing a notice of the GM, will be posted to shareholders.

Conditional on the passing of the resolutions at the GM, application will be made for the Transaction Shares to be admitted to trading on AIM and it is expected that their admission to AIM will take place on or around 10 March 2020.

 Options Award:

James Parsons and John Buggenhagen have each been awarded 1,385,894 three-year vest, five-year expiry options with an exercise price of 5 pence per share (post consolidation).

Ewen Ainsworth and Leonardo Salvadori have each been awarded 323,375 three-year vest, five-year expiry options with an exercise price of 5 pence per share (post consolidation).

Notice of General Meeting:

The Company will publish a Circular to convene the General Meeting to propose resolutions to enable completion of the Transaction.

The general meeting will be held on 5 March 2020 at 14:30 at the offices of Taylor Wessing at 5 New Street Square London EC4A 3TW United Kingdom.

The circular, containing the notice of general meeting, will be published and sent to shareholders and will be available shortly thereafter on the Company's website.

Further information on the proposed directors:

Prior to their formal appointment and following regulatory due diligence the Company will provide information on each of the proposed directors as required by Schedule 2g of the AIM Rules for Companies.

Total Voting Rights:

Following the General Meeting, Admission and Consolidation and the Placing, the Company's total issued share capital will consist of 46,196,484 Ordinary Shares of 0.5 pence each. This figure may then be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company pursuant to the FCA's Disclosure Guidance and Transparency Rules.

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