Ascent Resources PLC Interim results for the period ended 30 June 2024

RNS Number : 7765E

Ascent Resources PLC

19 September 2024

 

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

 

19 September 2024

 

FOR IMMEDIATE RELEASE

 

 

Ascent Resources plc

("Ascent" or "the Company")

 

Interim results for the period ended 30 June 2024

 

Ascent Resources plc (LON:AST), the AIM quoted European and Latin American focused natural resources company ("Company") is pleased to report its interim results for the six months ended 30 June 2024 (the "Period" or "H1 2024").

Highlights:

·      Completion of shareholder distribution with ring-fenced access to 49% of the net proceeds received in relation to a positive outcome of the Company's significant Energy Charter Treaty ("ECT") damages claim;

·      Initiation of maiden investment away from Slovenia, with an initial interest in a U.S. based company GNG LLC which acquired the 60 mmscfd (million standard cubic feet) nameplate "Lisbon Valley" gas and helium processing facilities in Utah, U.S.A. out of Chapter 11 insolvency, exposing the Company to the U.S. natural gas and helium purification and liquidation sectors;

·      Insolvency of Slovenian joint venture partner and Ascent's submission of approx. €11 million claim in the ongoing insolvency proceedings;

·      Unilateral termination of the RJOA (Slovenian joint venture agreement) by the administrator of Geoenergo effective as of 19 January 2024;

·      New Board changes initiated and new funding secured;

·      New strategic collaboration with Delta Energy SARL, a private oil and gas company founded by Ibrahim Diab (Chairman Elect) and Eric Faillenet (previously senior executive at Perenco and MD at Carlyle Group); and

Post Period end highlights:

·      Post period under review, raised US$1 million in new equity from a new strategic investor at a price of 2.3 pence per share, representing a c.43% premium to the closing share price on the day before announcement.

·      Successfully filed its Energy Charter Treaty damages claim reply memorial alongside producing further witness statements including independent expert witness statements in the fields of technical, environmental and damages quantum analysis

Enquiries:

Ascent Resources plc Andrew Dennan, CEO	Via Vigo Consulting
Zeus, Nominated Adviser & Broker James Joyce / Sarah Mather	0203 829 5000
Novum Securities, Joint Broker John Belliss	0207 399 9400

CEO's statement

 

Shareholder Distribution

H1 2024 has seen the Company implement a shareholder distribution with rights to redeemable preference share which enfranchises the holder to receive their relevant pro rata portion of 49% of the net economic proceeds which may be realised in the Company's significant and funded ECT damages claim against the Republic of Slovenia ("ROS"). The Company still retains 100% ownership and decision making control in relation to the claim and retains a direct 51% economic interest in the net amounts received in the event of a successful claim and payment of damages award. This distribution was completed following engagement with shareholders and to enfranchise those that held the Company's shares on the record date with a ring-fenced access to a portion of the proceeds to be received in the event of a positive claim outcome, that would not be diluted in the event of any future changes in the Company's issued ordinary share capital.

 

Energy Charter Treaty Claim Progress

The ECT claim has continued to proceed in accordance with the timetable previously agreed at the opening of the arbitration proceedings. Notably, during H1 2024, the Company and its lawyers successfully rebutted the ROS's application for security of costs.

 

The ECT claim continued with production of documents ordered to be exchanged by the Tribunal. The Company has also, in July 2024, post Period in review, successfully filed its reply memorial alongside producing further witness statements including independent expert witness statements in the fields of technical, environmental and damages quantum analysis. It should be cautioned that in the event the Company is successful in its claim any amount actually receivable by the Company may be significantly lower than the amount sought.

 

Entry into U.S. Onshore Natural Gas and Helium Purification & Liquefaction Sector

In April 2024, the Company announced its maiden investment away from Slovenia, which provides the Company and its shareholders with exposure to new growth in the U.S.A. (a stable jurisdiction) and a cash generative asset via an investment into GNG Partners LLC ("GNG") which had just acquired the "Lisbon Valley" with a 60 mmscfd nameplate gas processing facility (the "Lisbon Plant") out of Chapter 11 bankruptcy. The Lisbon Plant has helium purification and liquidation facilities and is fed by over 500 miles of gas gathering pipeline which spans the Paradox Basin and flows through the Four Corners region of America.

 

On 23 April 2024, the Company provided a convertible loan of US$1 million to GNG Partners LLC ("GNG") which gives the Company conversion rights into 1 million new GNG membership units, which at the time of investment represented 10% of the post conversion share capital of GNG. Since the date of this investment GNG founders have exercised 3.1 million founder options, resulting in GNG receiving further equity capital of US$3.1 million in cash.

 

GNG has acquired the Paradox Estate for an effective consideration of approximately US$12.5 million plus cure costs relating to the assigned contracts and leases related to the continuing operations of approximately US$2 million ("Consideration"). The Consideration has been paid via a 7-year loan note for an amount of c.US$7 million with interest accruing at 6% per annum (payable in kind) ("PIK Note") provided by some of the pre-insolvency creditors alongside new equity capital for the balance.

 

The Lisbon Plant is the sole operating independent natural gas processing plant in the Paradox Basin and fed by over 500 miles (of which 279 miles are wholly-owned by GNG) of helium rich gas gathering pipelines which have access to helium rich gas sources with up to 7-8% He concentration in the Four Corners region, most notably in SE Utah and NW New Mexico. The Lisbon Plant is a 60 mmcfd gas treatment plant which has a 1.1 mmscfpd processing capacity for helium, a 45 mmcfd cryogenic plant and 10,000 Bpd (barrels per day) fractionation train. The plant was built specifically to process the Paradox Basin natural gas that often has high CO₂, H₂S, N₂ and He content. GNG believe that the Lisbon Plant can produce approximately 3.4% of the U.S. liquid helium production (or 1.7% of the world's liquid helium). The Lisbon Plant is currently operational and processing gas, the plant has helium purifying capability to process a five9's grade (99.999%) helium which can be sold as gaseous helium directly to industrial consumers via truck. The Lisbon Plant has a liquification unit which has been in care and maintenance since around 2013 (when the liquified helium price was only ~US$62.25 /Mcf versus the US$750-1,250 /Mcf range available today). The liquefaction unit is undergoing some maintenance and upgrade works and expected to be recommissioned by the year end.

Underpinning the acquisition of the Paradox Estate and Ascent's investment in GNG is a plan to quickly recommission the liquification unit to rapidly move back into premium markets of producing and selling liquified helium, as well as further opportunity to invest in iso-containers which would provide the business with even greater price command. Ascent and GNG have agreed to work together with a view to Ascent potentially providing capital for this critical value enhancing development.

 

Slovenian Joint Venture Partner Insolvency & Termination of Slovenian RJOA

In Q4 2023 the Company's wholly owned subsidiary Ascent Slovenia Limited ("ASL") received a favourable tribunal interim decision in relation to ASL's Slovenian arbitration claims for payment of 90% of the proceeds received by its JV partner, Geoenergo d.o.o., from production in excess of the baseline production profile for all wells on the concession area (except for Pg-1 which is wholly included as baseline production) whilst ASL is still in a preferential recovery position (i.e. until it has earned back through production revenues its initial sunk investment costs of  approx. €50 million). Further to ASL securing this decision, the JV partner filed for self-appointed insolvency at the start of this year. The Company and its Slovenian legal advisors quickly moved to file a petition on the basis that this motion was an abuse of the insolvency system by a solvent company attempting to dispose of ASL's valid claim against them and that Geoenergo had not engaged with ASL, its main creditor, to understand if a settlement was possible to avoid an insolvency, such as Ascent taking ownership of Geoenergo's assets. Whilst the relevant court did not immediately approve the Geoenergo self-declared insolvency application and scheduled a hearing to decide on ASL's petition, in a sudden turn of events the hearing that was scheduled to happen in February was cancelled, a decision to initiate bankruptcy proceeding against Geoenergo was issued, and an administrator was appointed to Geoenergo on the 19 January 2024.

 

The administrator took the position, that the RJOA (the JV agreement) was terminated by the operation of law (ex lege) on the day of commencement of the bankruptcy procedure (19 January 2024). Subsequently, the insolvency court confirmed Geoenergo's right to unilaterally terminate the contract in accordance with insolvency law. In accordance with Slovenian mining law, the mining right of Geoenergo expired on 19 April 2024, since the holder of the mining right (Geoenergo) did not ensure a bank guarantee in the amount of the difference between the cost of the final rehabilitation and the reserved funds for the rehabilitation already paid into the relevant fund, in three months from the commencement of the insolvency proceeding. Ascent had already provided the agreed funds on account for the JV wells in 2014 in accordance with the terms of the RJOA, but subsequently Geoenergo failed to provide the additional monies owed relating to the other wells on the concession area before the expiry of the three months. Accordingly the Company has no further interest in the production of hydrocarbons in Slovenia and as a consequence of these actions and in accordance with the RJOA, ASL has transferred the assets it held on its balance sheet prior to the signature of the RJOA in October 2013 to Geoenergo on an "as-is" basis; these assets substantially include the Pg-10 and Pg-11a wells. ASL has filed a claim in the insolvency proceedings for approx. €11 million which is comprised of a claim for €8 million relating to hydrocarbon proceeds received by Geoenergo and owed to ASL as well as a precautionary claim of approx. €3 million relating to ASL's 75% share of the JV assets which were invested into after the signature of the RJOA. Whilst the Company is confident that ASL is substantially the largest creditor of Geoenergo, there can be no certainty of recovery of all or any amounts claimed at present.

 

Delta Energy SARL Strategic Collaboration

In June 2024, the Company announced that it has signed a strategic collaboration agreement with Delta Energy SARL ("Delta"), which is a private oil and gas company co-founded by Mr Eric Faillenet (former managing director at Carlyle International Energy Partners and prior to that, a senior executive at Perenco) and Mr Ibrahim Diab to take advantage of hydrocarbon opportunities where Delta have multiple mature relationships and unique access.  Any transactions under the collaboration agreement are expected to be classified a related party transaction.  Further announcements will be made as appropriate.

 

Corporate

In April 2024, in support of the Company's new investment in U.S. onshore gas and helium processing, the Company successfully announced a new funding package of up to US$2.7 million via a £550,000 (US$700,000) new equity placing at the closing bid price on the day before, being 2.3 pence per new share, and a new senior secured loan facility for up to US$2 million with an initial US$1 million drawn down to fund the GNG investment (as set out above). The equity subscribers and loan holder were also issued with 33% warrant coverage which are exercisable by paying a cash exercise price of 3.22 pence per new warrant share (being a 40% premium to placing price). The equity placing was supported by major existing shareholders, including cornerstone investor MBD Partners S.A. and C4 Energy Ltd, a company in which the CEO Andrew Dennan has a 25% beneficial interest in. The loan is for a fixed term of 12 months and has a 15% annual coupon, the loan plus coupon is convertible at a fixed conversion price of 3.22 pence throughout its term. In the event any loan is outstanding on the 12-month maturity date then the Company can elect to redeem this in cash or extend the maturity by a further six months. After the one year anniversary of the loan, the lender would have conversion rights over the loan and accrued coupon into new equity at a price equal to 90% of the lowest VWP in the ten (10) days prior to conversion.

 

In tandem with the Company announcing its new investment and new funding, the Company also announced new changes to its board with the standing-down of non-executive directors Mr Marco Fumagalli and Mr Malcolm Graham-Wood and the appointments of new non-executive directors Mr David Bullion and Mr Edouard Etienvre. David has over 30 years' experience in the oil and gas industry and is currently the CIO of American Helium LLC and CEO of GNG where the Company has made its new investment. David is a trained geologist who has previously enjoyed a 20 year career with BP holding various senior positions spanning the globe before moving to independent oil and gas companies where he has focused leading operations for the last ten years. Edouard is a seasoned executive with over 18 years of experience in the natural resources sector initially in banking (reserve-based lending) and more recently with private and public E&P companies as well as commodities trading, shipping and infrastructure companies. Edouard has extensive project management, risk assessment, commercial, business development and financing expertise. Edouard holds a MSc in Management from KEDGE Business School and is a non-executive director of ADX Energy Ltd (listed on the ASX) and Rome Resources Plc (listed on the LSE AIM).

 

Additionally, the Company has announced the former Executive Chairman Mr James Parsons elected to stand-down from the Board and the Company intends to appoint Mr Ibrahim Diab as Chairman. Ibrahim is a serial entrepreneur and natural resources expert who led MBD Partners S.A.'s cornerstone investment into Ascent. The appointment is subject to completion of customary regulatory on-boarding checks and mutual agreement of a suitable service contract. The Company also appointed Mr Lionel Therond as Chief Financial Officer (non-board). Lionel has 30 years of experience in the oil and gas sector and banking and has an MBA from INSEAD, a DEA in Geology and Geophysics from Institut National Polytechnique de Lorraine and a Diplôme Ingénieur Géologue from Ecole Nationale Supérieure de Géologie (Nancy, France). He is a CFA Charter holder and a Fellow of the Geological Society of London.

 

For the Period to 30 June 2024, the Company was not able to recognise production revenues from Slovenia due to the Company's Slovenian joint venture partner filing for insolvency and the subsequent unilateral termination of the JV by the administrator. Administrative costs for H1 2024 were higher than the H1 2023 costs, most notably due to exceptional one-off workstreams relating to the shareholder distribution and costs of initiating the Company's insolvency claim in against its former JV partner.

 

Outlook

The Company has orientated itself quickly to expose shareholders to new growth in U.S. onshore gas and helium processing via an initial investment into an operational and cash generative midstream business in the He rich Paradox Basin; as it continues to vigorously defend its legacy flagship investment in Slovenia and pursue its significant damages claims. The Company has updated its Board to accelerate its journey away from Slovenia and focus further on onshore oil and gas and helium production and processing in the Americas and the Company is excited about achieving further progress as the year continues and updating shareholders as further key milestones are achieved.

 

Andrew Dennan

Chief Executive Officer

19 September 2024                           

 

Consolidated Income Statement

for the Period ended 30 June 2024

	Notes	Period ended 30 June 2024 £'000s	Period ended 30 June 2023 £'000s
Revenue		1	1,360
Cost of sales		(26)	(456)
Depreciation of oil & gas assets		(1)	(1)
Gross (Loss)/Profit		(26)	903
Administrative expenses		(786)	(723)
Impairment of prepaid abandonment fund		(240)	-
(Loss)/Profit from operating activities		(1,052)	180
Finance cost		(23)	(38)
Net finance costs		(23)	(38)
(Loss)/Profit before taxation		(1,075)	142
Income tax expense		-	-
(Loss)/Profit for the period after tax		(1,075)	142
(Loss)/Profit) for the period attributable to equity shareholders		(1,075)	142
Earnings per share
Basic & fully diluted (loss)/profit per share (£)	2	(0.50)	0.09

 

 

Consolidated Statement of Comprehensive Income

for the Period ended 30 June 2024

	Notes	Period ended 30 June 2024 £'000s	Period ended 30 June 2023 £'000s
Profit / (loss) for the period		(1,075)	142
Other comprehensive income
Foreign currency translation differences for foreign operations		3	16
Total comprehensive gain / (loss) for the period		(1,072)	158

 

 

Consolidated Statement of Financial Position

As at 30 June 2024

	Notes	30 June 2024 £'000s	31 December 2023 £'000s
Assets
Non-current assets
Property, plant and equipment		2	3
Prepaid abandonment fund	4	-	262
Financial assets at fair value through profit and loss	3	797	-
Total non-current assets		799	265
Current assets
Trade and other receivables	5	388	323
Cash and cash equivalents		125	475
Total current assets		513	798
Total assets		1,312	1,063
Equity and liabilities
Attributable to the equity holders of the Parent Company
Share capital	8	8,642	8,495
Share premium account		78,398	77,889
Merger reserve		570	570
Share-based payment reserve		790	574
Translation reserves		(255)	(258)
Retained earnings		(88,723)	(87,648)
Total equity attributable to the shareholders		(578)	(378)
Total equity		(578)	(378)
Non-current liabilities
Provisions		578	690
Total non-current liabilities		578	690
Current liabilities
Convertible loan notes		5	5
Borrowings	7	729	184
Trade and other payables	6	578	562
Total current liabilities		1,312	751
Total liabilities		1,890	1,441
Total equity and liabilities		1,312	1,063

 

Consolidated Statement of Changes in Equity

for the period ended 30 June 2024

	Share capital	Share premium	Merger reserve	Share based payment reserve	Translation reserve	Retained earnings	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Balance at 1 January 2023	8,214	76,298	570	2,131	(276)	(88,457)	(1,520)
Comprehensive income
Profit for the period	-	-	-	-	-	142	142
Other comprehensive income
Currency translation differences	-	-	-	-	16	-	16
Total comprehensive income	-	-	-	-	16	142	158
Transactions with owners
Issue of shares during the year net of costs	66	334	-	-	-	-	400
Costs related to share issues	-	(29)	-	-	-	-	(29)
Share-based payments	-	-	-	2	-	-	2
Total transactions with owners	66	305	-	2	-	-	373
Balance at 30 June 2023 (unaudited)	8,280	76,603	570	2,133	(260)	(88,315)	(989)
Balance at 1 January 2023	8,214	76,298	570	2,131	(276)	(88,457)	(1,520)
Comprehensive income
Loss for the period	-	-	-	-	-	(851)	(851)
Other comprehensive income
Currency translation differences	-	-	-	-	18	-	18
Total comprehensive income	-	-	-	-	18	(851)	(833)
Transactions with owners
Issue of ordinary shares	281	1,619	-	-	-	-	1,900
Costs related to share issues	-	(28)	-	-	-	-	(28)
Share-based payments - charge	-	-	-	103	-	-	103
Share-based payments - expired	-	-	-	(1,660)	-	1,660	-
Total transactions with owners	281	1,591	-	(1,557)	-	1,660	1,975
Balance at 31 December 2023 (audited)	8,495	77,889	570	574	(258)	(87,648)	(378)
	Share capital	Share premium	Merger reserve	Share based payment reserve	Translation reserve	Retained earnings	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Balance at 1 January 2024	8,495	77,889	570	574	(258)	(87,648)	(378)
Comprehensive income
Loss for the period	-	-	-	-	-	(1,075)	(1,075)
Other comprehensive income
Currency translation differences	-	-	-	-	3	-	3
Total comprehensive income	-	-	-	-	3	(1,075)	(1,072)
Transactions with owners
Issue of ordinary shares	147	532	-	-	-	-	679
Costs related to share issues	-	(23)	-	-	-	-	(23)
Share-based payments - charge				221			221
Share-based payments - expired	-	-	-	(5)	-	-	(5)
Total transactions with owners	147	509	-	216	-	-	872
Balance at 30 June 2024 (unaudited)	8,642	78,398	570	790	(255)	(88,723)	(578)

Consolidated Statement of Cash Flows

for the six months ended 30 June 2024

	Notes	Period ended 30 June 2024 £'000s	Period ended 30 June 2023 £'000s
Cash flows from operations
(loss)/Profit after tax for the period		(1,075)	142
Depreciation		1	(1)
Change in receivables	5	(68)	(102)
Change in payables	6	16	(542)
Change in provisions		(113)	-
Decrease of prepaid abandonment fund	4	262	-
Increase in share-based payments	9	218	2
Exchange differences		3	9
Net cash used in operating activities		(756)	(492)
Cash flows from investing activities
Investments in associates	3	(797)	-
Net cash used in investing activities		(797)	-
Cash flows from financing activities
Interest paid and other finance fees		23	38
Proceeds from loans and borrowings		525	-
Proceeds from issue of shares	8	678	400
Share issue costs		(23)	(29)
Net cash generated from financing activities		1,203	409
Net increase in cash and cash equivalents for the year		(350)	(83)
Effect of foreign exchange differences		-	-
Cash and cash equivalents at beginning of the year		475	325
Cash and cash equivalents at the end of the year		125	242

 

 

 

 

Notes to the Interim Financial Statements

for the six months ended 30 June 2024

1.   Accounting Policies

Reporting entity

Ascent Resources plc ('the Company') is a company domiciled in England. The address of the Company's registered office is 5 New Street Square, London EC4A 3TW. The unaudited consolidated interim financial statements of the Company as at 30 June 2024 comprise the Company and its subsidiaries (together referred to as the 'Group').

 

Basis of preparation

The interim financial statements have been prepared in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006. The interim financial information has been prepared using the accounting policies which were applied in the Group's statutory financial statements for the year ended 31 December 2023.

 

All amounts have been prepared in British pounds, this being the Group's presentational currency.

 

The interim financial information for the six months to 30 June 2024 and 30 June 2023 is unaudited and does not constitute statutory financial information. The comparatives for the full year ended 31 December 2023 are not the Group's full statutory accounts for that year. The information given for the year ended 31 December 2023 does not constitute statutory financial statements as defined by Section 435 of the Companies Act. The statutory accounts for the year ended 31 December 2023 have been filed with the Registrar and are available on the Company's web site www.ascentresources.co.uk. The auditors' report on those accounts was unqualified. It did not contain a statement under Section 498(2)-(3) of the Companies Act 2006.

 

New Standards adopted as at 1 January 2024

Accounting pronouncements which have become effective from 1 January 2024 do not have a significant impact on the Group's financial results or position.

 

New accounting policies adopted for the interim period ended 30 June 2024

 

Financial assets

All of the Group's recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

 

Convertible loan notes

On issue of a convertible loan, the fair value of the liability component is determined by discounting the contractual future cash flows using a market rate for a non-convertible instrument with similar terms. This value is carried as a liability on the amortised cost basis unless is designated as a Fair Value Through Profit and Loss ("FVTPL") at inception. Financial instruments designated as FVTPL are classified in this category irrevocably at inception and are derecognised when extinguished. They are initially measured at fair value and transaction costs directly attributable to their acquisition are recognised immediately in profit or loss. Subsequent changes in fair values are recognised in the income statement with profit or loss. 

 

Equity instruments are instruments that evidence a residual interest in the assets of an entity after deducting all of its liabilities. Therefore, when the initial carrying amount of a compound financial instrument is allocated to its equity and liability components, the equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component. The value of any derivative features (such as a call option) embedded in the compound financial instrument other than the equity component (such as an equity conversion option) is included in the liability component.

 

The convertible loan note with GNG Partners LLC has been accounted for as a FVTPL financial instrument in accordance with IFRS 9. For the purposes of the 6-month interim period, management determined the fair value to be the original loan price as the transaction completed only 2 months before the end of the period. After determining the fair value at inception, management have allocated the residual value to the equity component.

Going Concern

The Financial Statements of the Group are prepared on a going concern basis.

On 23 April 2024, the Company raised gross proceeds of approximately $1.7 million (£1.38 million) via an equity fundraise and loan note issue (see note 7). These funds were then used to provide a convertible loan of US$1 million to GNG Partners LLC (see note 5) to acquire the assets of Paradox Resources LLC. Ascent will collaborate with GNG to potentially provide further capital over time to accelerate the business into a premium US liquefied helium producer and distributor. Post period under review, the Company successfully raised US$1 million (£763k) from a new investor at a price of 2.3 pence per new share, representing a c.43% premium to the closing share price on the day prior to announcement, with the proceeds to be used to fund continuing business development as well as general and administrative expenses.

 

Based on historical and recent support from new and existing investors the Board believes that such funding, if and when required, could be obtained through new debt or equity issuances. However, there can be no guarantee over the outcome of these options and as a consequence there is a uncertainty surrounding the Group's ability to raise the necessary finance, which may cast doubt on the Group's ability to operate as a going concern. Further, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.

 

Principal Risks and Uncertainties:

The principal risks and uncertainties affecting the business activities of the Group remain those detailed on pages 17-19 of the Annual Review 2023, a copy of which is available on the Company's website at www.ascentresources.co.uk. 

 

2.   Earnings per share

	Period ended 30 June 2024 £'000s	Period ended 30 June 2023 £'000s
Result for the period
Total (loss)/Profit for the period attributable to equity shareholders	(1,075)	142
Weighted average number of ordinary shares	Number	Number
For basic earnings per share	216,554,694	157,084,682
Earnings per share (£)	(0.497)	0.09

 

 

3.   Financial assets at fair value through profit and loss

	30 June 2024 £'000s	31 December 2023 £'000s
Convertible loan notes receivable	797	-
	797	-

 

On 24 April 2024 the group invested US$1 million (£797k), into GNG Partners LLC via an unsecured two-year convertible loan note. GNG Partners LLC used these funds to acquire the assets of Paradox Resources LLC. Other key terms of the convertible loan notes are as follows:

-       Date of maturity of April 2026;

-       The notes have a zero-coupon; and

-       Converts, at the election of Ascent, into 1 million membership units of GNG.

 

The convertible loan note is accounted for at fair value through profit and loss. Management determined the fair value to be the original loan price as the transaction completed within close proximity to the end of the period.

 

4.   Intangibles

	30 June 2024 £'000s	31 December 2023 £'000s
Prepaid abandonment fund	-	262
	-	262

 

During the period the prepaid abandonment fund of £262k (EUR 300k) was impaired to nil as the RJOA was unilaterally terminated by the Geoenergo administrator who has confirmed EUR 250k was paid to the state abandonment fund, specifically the Slovenia Eko fund. The remaining EUR 50k is on account with Geoenergo and forms part of the insolvency estate. Given these proceeds form part of a wider insolvency estate, there is currently no certainty about a full recovery of these monies and in accordance with IFRS reporting standards it has been decided to impair the remainder of the prepaid abandonment fund.

 

5.   Trade & other receivables

	30 June 2024 £'000s	31 December 2023 £'000s
Trade receivables	-	-
VAT recoverable	13	9
Prepaid abandonment liability	-	262
Prepaid arrangement fee convertible Loan	60	-
Prepayments & accrued income	315	314
	388	585
Less non-current portion	-	(262)
Current portion	388	323

 

6.   Trade & other payables

	30 June 2024 £'000s	31 December 2023 £'000s
Trade payables	521	489
Tax and social security payable	57	29
Accruals and deferred income	-	44
	578	562

 

7.   Borrowings

	30 June 2024 £'000s	31 December 2023 £'000s
Group
Current
Convertible loan notes	5	5
Borrowings	729	184
Liability at the end of the period	734	189

Convertible loan notes

In April 2024, the Company entered into a $2 million secured fixed coupon loan facility with RiverFort Global Opportunities ("RiverFort"). Under the agreement the Company received an initial US$883,000 (£708,992) loan amount issued on 24 April 2024 (the "Initial Loan"). Further advances will take place subject to mutual agreement between the Company and RiverFort. The Initial Loan has a 12-month term, during which it is convertible at a fixed price of 3.22 pence, being a 40% fixed premium to the issue price. The loan contained a 7% drawdown fee plus transaction closing costs which were payable via the issue of 2,962,426 new ordinary shares of 0.5p each in the Company. The fee will be recognised over the duration of the loan.

The Initial Loan has a 15% fixed coupon attached to it, payable on redemption, and warrants equal to 33% of the Initial Loan amount exercisable at 140% of the Issue Price at any time during the next four years. The Loan is secured by way of a company debenture.

It was agreed the remaining balance of the existing loan with RiverFort would be forgiven which amounted to £93,383 on the date of the transaction.

The movement in convertible loan is analysed as follows:

	30 June 2024 £'000s
At 1 January 2024	-
Principle loan	802
Less historic loan written off	(93)
Interest charged on principle	20
At 30 June 2024	729

 

8.   Share capital

	30 June 2024 £'000s	31 December 2023 £'000s
Authorised
2,000,000,000 ordinary shares of 0.5p each	10,000	10,000
Allotted, called up and fully paid
3,019,648,452 deferred shares of 0.195p each	5,888	5,888
1,737,110,763 deferred shares of 0.09p each	1,563	1,563
109,376,804 ordinary shares of 0.5p each	763	763
13,333,333 ordinary shares of 0.5p each	67	67
42,857,143 ordinary shares of 0.5p each	214	214
24,130,435 ordinary shares of 0.5p each	121	-
678,261 ordinary shares of 0.5p each	3	-
2,962,426 ordinary shares of 0.5p each	15	-
1,743,348 ordinary shares of 0.5p each	8	-
Total	8,642	8,495
Reconciliation of share capital movement	Ordinary shares No.	Ordinary shares No.
Opening	208,608,491	152,418,015
Issue of shares during the period	29,514,470	56,190,476
Closing	238,122,961	208,608,491

 

Shares issued during the period

Issuance of equity throughout the period:

·      On 13 May 2024, the Company raised total gross new equity proceeds of £555,000 from the issue of 24,130,435 new ordinary shares at a placing price of 2.3 pence per share. This included 2,173,913 shares issued to C4 Energy Limited, a company where Andrew Dennan, James Parsons, and Marco Fumagalli, each have a 25% beneficial interest.

·      Also on 13 May 2024, 678,261 new ordinary shares were issued to James Parsons at an issue price of 2.3 pence per share.

·      As per the new loan agreement with RiverFort Global Opportunities, 2,962,426 new ordinary shares of 0.5p were issued on 13 May 2024 for the 7% drawdown fee which was payable in shares.

·      The Company also issued 1,743,348 new ordinary shares of 0.5p each in the Company as deal fees to an arranger of the GNG investment transaction on 13 May 2024.

 

9.   Share based payments

The Company has provided the Directors, certain employees and institutional investors with share options and warrants ("Options").  Options are exercisable at a price equal to the closing market price of the Company's shares on the date of grant.  The exercisable period varies and can be up to seven years once fully vested after which time the option lapses.

Details of the share options outstanding during the year are as follows:

	Shares	Weighted Average price (pence)
Outstanding at 1 January 2023	7,848,142	50.05
Granted during the year	4,600,000	-
Expired during the year	(2,874,138)	-
Outstanding at 31 December 2023	9,574,004	50.05
Exercisable at 31 December 2023	8,172,438	41.20
Outstanding at 1 January 2024	9,574,004	50.05
Vesting during the period	666,667	-
Outstanding at 30 June 2024	9,574,004	50.05
Exercisable at 30 June 2024	8,839,105	38.09

Options outstanding at 30 June 2024 have an exercise price of 5p (31 December 2023: 5p) and a weighted average contractual life of 5 years (31 December 2023: 5 years)

On 6 March 2024, the Company's wholly owned subsidiary, Ascent Claim Entitlement SPV Ltd, issued 6,171,788 options to Directors and certain employees. The options are exercisable at 0.005p for a period of 20 years after which time the option lapses.

Details of the share options issued by Ascent Claim Entitlement SPV Ltd and outstanding during the year are as follows:

	Shares	Weighted Average price (pence)
Outstanding at 1 January 2024	-	-
Granted during the year	6,171,788	-
Expired during the year	-	-
Outstanding at 30 June 2024	6,171,788	0.005
Exercisable at 30 June 2024	6,171,788	0.005

Details of the warrants issued in the period are as follows:

Issued	Exercisable from	Expiry date	Number outstanding	Exercise price
30 January 2024	Anytime until	3 October 2028	45,000,000	5.00p
23 April 2024	Anytime until	23 April 2027	1,017,391	2.30p
23 April 2024	Anytime until	23 April 2028	8,043,478	3.22p
23 April 2024	Anytime until	23 April 2028	11,506,098	3.22p

Details of total warrants outstanding at the end of the period are as follows:        

	Warrants	Weighted Average price (pence)
Outstanding at 1 January 2024	71,454,595	5.00
Granted during the period	65,566,967	2.3
Exercised during the period	-	-
Expired during the period	-	-
Outstanding at 30 June 2024	137,021,562	5.00
Exercisable at 30 June 2024	137,021,562	5.00

The warrants outstanding at the period end have a weighted average remaining contractual life of 1.54 years. The exercise prices of the warrants are between 4.00 - 7.50p per share.

 

10. Events after the reporting period

Post period under review, the Company successfully raised US$1 million (£763k) from a new investor at a price of 2.3 pence per new share, representing a c.43% premium to the closing share price on the day prior to announcement, with the proceeds to be used to fund continuing business development as well as general and administrative expenses.

 

 

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