Ascent Resources Plc (LON: AST), the onshore Caribbean, Hispanic American and European focused energy and natural resources company, provides an update on gas prices at its Petisovci gas project in Slovenia alongside amendments to the Slovenian Mining Law with consequent potential uplift in the Company's damages claim.
The Company notes continued significant strength in global gas prices with the Central Eastern Gas Hub ("CEGH") day ahead market price, at the close on Tuesday, of Euro 117.958 / MWh and a prior weekly average price of Euro 173.095 / MWh, which represents over 270% increase on the 2021 average price.
The Company now expects, at current production levels and assuming an average monthly gas price of Euro 120 / MWh, continuing production from only the PG-10 and PG-11A production wells to generate gross production revenues net to the Company's interest in the JV (after extraction, processing and handling costs) of at least Euro 150,000 per month. This is a circa 50% increase on the Company's expectation announced on 11 October 2021. Revenues continue to accrue on the JV account whilst the Company continues to discuss the various previously announced disputed JV matters with its JV partner and service provider. However, the Company has now decided to invoice its share of concession production revenues relating to the period from April 2020 to February 2022, which were previously not invoiced pending resolution of the previously announced disputes.
The Company also notes recent proposed amendments to the Slovenian mining law, which, amongst other items, include further restrictions on hydraulic-stimulation with Slovenia now seeking to prohibit all forms of hydraulic stimulation for the purpose of exploration or exploitation of hydrocarbons. The Company and its advisors see this development as further reinforcing its claim against the Republic of Slovenia under the Energy Charter Treaty and UK-Slovenia Bilateral Investment Treaty, given that the joint venture has always expected to be able to continue the historic practise of conducting low volume mechanical stimulation techniques in order to flow the tight gas reservoir. The Company and its legal advisors are reviewing these latest developments which could lead to a significant increase in the Company's damages claim.
The Company continues to await fulfilment of the conditions precedent relating to the signed and binding damages based funding agreement for the international arbitration dispute and to demonstrate their confidence in the funding closure, the Directors and select other advisers have agreed that the Company will withhold 25% of their salaries and fees until the funding arrangement with Enyo Law LLP has completed.