Slovenia : Mining Act Amendments and JV Updates

26 April 2022                                      

Ascent Resources plc

("Ascent" or the "Company")

Slovenia : Mining Act Amendments, Claim Funding and JV Updates

Ascent Resources Plc (LON: AST), the onshore Caribbean, Hispanic American and European focused energy and natural resources company, provides an update on developments in Slovenia and on its ECT/BIT claim funding.

Changes to the Slovenia Mining Act

Further to the Company's announcement on 16 March 2022 which noted the proposed amendments to the Slovenian mining law, on 6 April the Republic of Slovenia voted to adopt amendments to the mining law which included provisions that explicitly prohibit holders of mining rights from being  able to carry out exploration or exploitation of hydrocarbons with the use of any form of hydraulic stimulation. The newly adopted amendments will be published in the Official Gazette of the Republic of Slovenia, which is expected imminently, and will come in to force fifteen days later. These amendments will confirm that it is now no longer possible to obtain a permit for exploration or to be granted mining rights for the exploitation of hydrocarbons produced with the use of hydraulic stimulation.

Consequently, the Company does now not expect to complete certain workstreams relating to the permits and applications to re-stimulate the PG-10 and PG-11A wells. The Company is now reviewing future field development opportunities in light of this political development and is reviewing all previously envisaged workstreams including the EIA permitting and concession extension processes.

ECT and BIT Damages Claim Against Slovenia

This development is a further breach by the Republic of Slovenia of its obligations under the Energy Charter Treaty and UK-Slovenia Bilateral Investment Treaty. As a result, the Company has been deprived of the full value of its investments in Slovenia given that it 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 are expected to lead to a significant increase in the Company's damages claim.

The Company has also been advised by its lawyers that material progress has been made in relation to completing the binding damages based agreement, and the paperwork to complete the previously announced funding is now expected in the coming weeks.

Production and Revenue Recognition Update

The JV continues to produce gas and condensate from wells in the concession area which is sold domestically to local industrial buyers. In March 2022, the PG-10 and PG-11A wells produced over 140,000 scm of gas which was sold with a monthly volume weighted average price of circa €140 / MWh resulting in over €220,000 of gross invoiceable revenue net to Ascent's interest in these two wells. The Company has invoiced its JV partner, Geoenergo, for receipt of these gas revenue proceeds. Further updates on production revenues and receipt of cash proceeds from April 2020 through to March 2022 will be announced in due course.

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