Ascent Resources Plc, the onshore Caribbean, Hispanic American and European focused energy and natural resources company, announces an update on its operations in Slovenia and ongoing matters with JV partners.
Petišovci Project Operations Update
Further to the announcement of 9 February, production at the PG-11A well has now restarted following agreement with INA, in Croatia, to re-open the pipeline evacuation route and to receive export sales gas without a minimum offtake commitment for the initial days of production stabilisation. An average production rate in excess of 20,000 scm/day has initially been recorded. The JV will continue to monitor production over the coming days and only thereafter commit, to INA, daily sales gas delivery volumes on a weekly basis. Revenues received from gas sales will first go towards accrued and continuing JV operational overheads.
JV Partner Update
As announced on 28 May 2020, the Company's subsidiary Ascent Slovenia Limited has been managing a planned contractual default with its joint venture partner Geoenergo* and the local service provider Petrol Geo*, in relation to historic amounts claimed of circa €235k (which are provided for in the Company accounts) in connection with the joint venture arrangements. Despite multiple offers by the Company to settle matters, including to restructure the JV arrangements, no amicable settlement with either Geoenergo* or Petrol Geo* has been reached to-date.
In the meantime, Petrol Geo* has issued a local enforcement order attempting to claim payment for an unsubstantiated amount of €662,288.63 plus interest of €12,103.19. The Company has appointed local counsel and immediately rejected this claim which it considers, having taken legal advice, to be both incorrect and totally without merit and substance, and in any event is being claimed for outside of the dispute resolution mechanism provided for in the relevant service agreement.
The Company continues to believe that an amicable settlement will be achieved eventually.
Andrew Dennan, the Company's Chief Executive, commented:
"The resumption in production of export sales gas at PG-11A is a positive development, coinciding with our dispute against the Republic of Slovenia approaching a potentially significant inflexion point this month.
It is of course disappointing to observe a JV service provider pursuing a confrontational approach, possibly trying to take advantage of the situation through what we regard as ill-timed and unfounded legal manoeuvring. Notwithstanding, the Board will continue to defend its investments in Slovenia and reserves its right to pursue all available remedies and actions."
* The JV partner Geoenergo is 50% owned by Nafta Lendava (which itself is an entity 100% owned by the Republic of Slovenia) and 50% owned by Petrol (30% of which is directly and indirectly controlled by the Republic of Slovenia). The JV Service Provider, Petrol Geo, is a 100% subsidiary of Petrol.