“Shareholders can now be confident that their commercial interests are being protected,” said Andrew Dennan.
() has told investors that it remains committed to maximising the value in its Slovenian portfolio, particularly the Petišovci Tight Gas Project.
It comes after a review of the Slovenian business following the introduction of new management and a new strategic focus on Hispanic America and the Caribbean, including a recent entry to Cuba.
The company, in a statement, noted that some €50mln has been invested in the project over a 13 year period, despite historic legal and permitting complexities, and it is host to significant oil and gas reserves and resources.
A two-month review has concluded that the company sees significant core economic value at Petišovci and expect significant cash generation from the asset in the medium term – it noted that European gas pricing held up compared to collapsing global oil prices.
To advance the project, the company is now advancing an approach that aims to secure permitting, to rework its joint venture and also engage external council to serve formal ‘Notice of Dispute’ against the Slovenian state, likely under the ECT shortly.
So far, the company has had an initial external legal review of the potential legal claim against the Republic of Slovenia to be brought under the Energy Charter Treaty (ECT). It concluded that it appears to have a valid legal basis.
Continued material production from Petišovci requires regular stimulation activity, the company said, and, therefore it will always carry some inherent permitting risks.
Operationally, at Petišovci, the company is awaiting permits to enable the re-entry and stimulation of the PG-10 and PG-11A wells – applications for which were originally made in 2017 – and they are presently expected before the end of 2020. By August, the company anticipates it will receive feedback from an Administrative Court appeal initiated by the JV partners in July 2019.
The company, meanwhile, noted that equipment costs have reduced in the sector and it is keen to take advantage of this if possible.
Ascent also said that its venture partner is will, subject to negotiation, look at a restructuring for the benefit of all parties – the AIM-listed firm’s management noted that it has inherited some €200,000 of outstanding payables to the partner, relating to 2019 work, and that could trigger a contractual default, but it expects to resolve this issue in due course.
“We are now delighted to share the resulting two-pronged strategy which draws a clear legal line in the sand with the new government whilst also preparing our team technically to stimulate and increase gas production at Petišovci,” said Andrew Dennan, Ascent chief executive.
He added: “Shareholders can now be confident that their commercial interests are being protected and the right subsurface expertise is being deployed in the asset. Ascent is now entering a period of enhanced newsflow across both Slovenia and Cuba.”