AST Ascent Resources Plc

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION (EU) 596/2014 AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EU (WITHDRAWAL) ACT 2018 ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

20 December 2024

Ascent Resources plc

("Ascent" or the "Company")

Investment in US Onshore Gas, Oil & Helium Upstream Portfolio,
Intention to Distribute Further ECT proceeds entitlement & New Strategic Funding

Ascent Resources Plc (LON: AST) is pleased to announce it has acquired a 49% interest in American Helium LLC's Utah and Colorado upstream acreage which includes direct interests in a proportionate share of 119,000 acres of helium rich oil and gas licenses across the two states. The Company has acquired this position for a total consideration of US$2.0 million which is to be satisfied via payment of US$1.75 million in new Ascent shares issued at 5 pence per new share as well as US$0.25million in cash.

Furthermore, the Company is pleased to announce its intention to undertake a second distribution to qualifying stakeholders with entitlements to 41% of the net proceeds to be potentially received by the Company in its significant Energy Charter Treaty damages claim against the Republic of Slovenia. The Company is finally also pleased to announce it has raised new proceeds of US$475,949 through the issue of 7,520,000 ordinary shares at a price of 5 pence per new share, representing a 203% premium to the closing mid price of 1.65 pence as reported on the day before announcement, with warrants attached as further detailed below alongside a broker option to enable other investors to participate on the same terms.

Highlights:

o  Acquisition of a 49% direct interest in 119,000 acres of upstream licenses in Colorado and Utah with 18.2 Bcf of natural gas (with up to 1% helium), 2.79 mmbbls of oil and condensates and 2.34 mmboe of natural gas liquids of independently certified (APN Energy Consultants LLC Competent Person Report dated 1 April 2024) Proved Recoverable Reserves (1P), which include PDP, PDNP and PUD Reserves. The NPV10 of these 1P reserves is estimated in the CPR at in excess of US$80 million;

o  Intention to distribute an entitlement to qualifying stakeholders with ring-fenced access to a 41% economic interest entitlement in the net proceeds to be received by Ascent in the event of positive outcome and payment of award relating to the Company's significant Energy Charter Treaty damages claim;

o  New fundraising at a significant premium to last closing price, raising gross proceeds of US$475,949 via the issue of new equity and warrants subscribed for by existing shareholders.

Andrew Dennan, the Company's Chief Executive Officer, commented:

"We are really excited to acquire a material interest in American Helium's southern Utah and Colorado acreage, which is adjacent to the GNG plant and gas gathering system into which we invested earlier this year. Our new investment into upstream acreage secures Ascent's direct interest in material proven reserves which has significant behind pipe and step out as well as exploration upside and gives access to valuable natural gas reserves which can be produced from high helium producing zones within the acreage.

We are thankful for the support of our existing strategic investors from whom we have raised US$475,949 in new proceeds as the Company continues to focus on material opportunities that are thematically consistent in a world focused on energy security and transition.

Furthermore, we are pleased to be able to announce the Company's intention to do a further shareholder distribution which will give qualifying stakeholders the opportunity of having ring-fenced access to a significant portion of the net proceeds resulting from a successful claim, which as a result will not be exposed to further changes in the capital structure of the Company."

Acquisition of 49% interest in American Helium LLC's Upstream Acreage

Today, the Company has entered into an agreement to acquire direct interests in 49% of the oil and gas leases operated by American Helium LLC and held by their American Helium Colorado LLC and American Helium Utah LLC operating subsidiaries, which includes a portfolio of producing fields within 119,000 acres of helium rich oil and gas leases in Utah and Colorado. Ascent has acquired these interests for a total consideration of US$2 million which will be satisfied $250,000 in cash and the balance of $1,750,000 by Ascent issuing new shares at a price of 5 pence per new share. Accordingly, the Company will issue American Helium with 27,650,000 new shares in the Company (the "Vendor Shares").

The American Helium portfolio has proved (1P) net reserves (inclusive of PDP, PDNP and PUD reserves) of 18.2 Bcf of natural gas (with up to 1% helium), 2.79 mmbbls of oil and condensate and 2.34 mmbbls of natural gas liquids (APN Energy Consultants LLC Competent Person Report dated 1 April 2024 prepared using the standard petroleum engineering practices in conformity with the SPE Petroleum resources Management System guidelines). The portfolio has significant behind pipe upside as well as potential step-out and exploration upside within the acreage, including opportunities to exploit high helium-bearing zones. The acreage is in the helium rich Paradox Basin and has up to 1% helium contained within the producible natural gas streams, which is expected to be monetised through synergistic tie-back and processing at the GNG Lisbon gas processing plant. The acreage also benefits from having existing infrastructure in place and an experienced operator which is principally based out of Houston, Texas as well as in the field. The portfolio has averaged 3.2 mmscfpd of gross daily natural gas production (net to American Helium) over the last three months (September to November 2024) and generated US$331,023 of operating profit (net to American Helium) for the period of March through to September 2024.

The portfolio includes 25 high graded near term, permitted and very affordable (budgets ranging from US$10,000 up to US$80,000 per well) work-over candidates which if executed could significantly boost production. The parties will work together to evaluate further candidates for well work-over operations as well as the Operator's inventory of re-entry and new drilling prospects with a view to finalising a future work program targeting the high helium producing zones in the Leadville and McCracken formations. The Company looks forward to providing shareholders with updates on this new investment throughout 2025.

In connection with the Company's acquisition of interests in the American Helium operated acreage, the Company has also today agreed to issue 22 million vendor warrants to Mr Humberto Sirvent, the CEO of American Helium and has today also agreed to issue 5 million vendor warrants to American Helium's Chairman of the Advisory board, Mr. Michael Pompeo who served in the first administration of President Trump  as director of the Central Intelligence Agency (CIA), from 2017 to 2018 and as the 70^th United States Secretary of State from 2018 to 2021. The vendor warrants are exercisable at any time within the next three years by paying a cash exercise price of 5 pence per new vendor warrant share.

Intention to Distribute ECT Claim Proceeds Entitlement

Further to the Company having now acquired a material interest in a US onshore portfolio, and further to the distribution completed by the Company earlier this year, the Company is pleased to announce its intention to conduct a further entitlement issue to qualifying stakeholders with rights to receive ringfenced access to the net proceeds received by the Company in the event of a positive Energy Charter Treaty claim outcome and payment of award by the Republic of Slovenia. The Company currently retains 100% ownership and control of its significant ECT claim and further to the distribution earlier this year retains a 51% economic interest in the net proceeds to be received in the event of a positive claim outcome. The Company now announces that it intends to conduct a second distribution with entitlements to up to 41% economic interest in the net proceeds to be received in the event of a positive claim outcome. The Company expects to mail a circular to shareholders in due course and expects the record date to be in January 2025, further updates will be provided in due course.

New Funding & Broker Option

In support of the Company's move to acquire direct interests in the American Helium upstream licenses the Company is pleased to announce that it has today secured new funding of US$475,949 via the issue of new equity at a price of 5 pence per new equity share, representing a 203% premium to yesterday's closing mid price of 1.65 pence per share. The Company has therefore agreed to issue 7,520,000 new shares to the subscribers (the "Subscriber Shares"). The new equity has new warrants attached to it equal to three (3) warrants for every two (2) new equity shares subscribed for which are exercisable at a price of 2.3 pence at any time of the holders choosing within three years by either paying the cash exercise price or via cashless exercise which would result in a reduced number of new warrant shares being issued upon exercise.  

MBD Partners SA have participated in the Company's fundraising by investing US$250,000. This participation is a related party transactions under the AIM Rules for Companies. The directors consider, having consulted with Zeus Capital the Company's nominated adviser, the terms of these transactions to be fair and reasonable insofar as its shareholders are concerned. The Company also announces that it has issued a consultant 1,000,000 shares issued at the subscription price of 5 pence per new share in lieu of cash for services rendered between June and November of this year.

In order to provide qualifying Ascent shareholders ("Existing Shareholders") and other qualified investors with an opportunity to participate on the same basis as the Subscribers to the Company's fundraising (with the same Placing Price and identical Warrant entitlement), the Company has granted Novum Securities Limited a Broker Option over an additional 3,950,000 new Ordinary Shares (the "Broker Option Shares") (£197,500 or US$250,000 at the Placing Price). The Broker Option Shares and attached Warrants will be issued under the Company's existing share authorities.

Existing Shareholders who hold shares in the Company and are on the register of members as at the close of business on 19 December 2024, will be prioritised for participation in the Broker Option (other than at the discretion of Novum and all orders from such Existing Shareholders will be accepted and processed by Novum on a strictly "First Come, First Served" basis. The Broker Option has not been underwritten. 

The Broker Option may be exercisable by Novum at any time from today, 20 December 2024  to 16.00 p.m. UK time on 30 December 2024, at its absolute discretion, following consultation with the Company. There is no obligation on Novum to exercise the Broker Option or to seek to procure subscribers for the Broker Option Shares. Novum may also, subject to prior consent of the Company, allocate new Ordinary Shares after the time of any initial allocation to any person submitting a bid after that time.

Novum may choose not to accept bids and/or to accept bids, either in whole or in part, on the basis of allocations determined at their discretion (after consultation with the Company) and may scale down any bids for this purpose on such basis as Novum may determine. 

The Broker Option Shares are not being made available to the public and none of the Broker Option Shares are being offered or sold in any jurisdiction where it would be unlawful to do so. No Prospectus will be issued in connection with the Broker Option.

The Company will announce the results of the Broker Option and the resultant shares in issue following its close. It is expected that the Vendor Shares, Subscriber Shares as well as any Broker Option Shares shall be admitted to trading on AIM on or around 7 January 2025.

Enquiries:

Qualified Persons Statement

Leonardo Salvadori, a qualified Geologist with over 35 years of relevant experience in the oil and gas industry and a member of SPE (Society of Petroleum Engineers) has reviewed this announcement for the purposes of the current Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in June 2009 and in accordance with the Petroleum Resources Management System (PRMS) issued in June 2018 by the Society of Petroleum Engineers, the World Petroleum Council, the American Association of Petroleum Geologists, the Society of Petroleum Evaluation Engineers, the Society of Exploration Geophysicists (SEG), the Society of Petrophysicists and Well Log Analysts (SPWLA) and the European Association of Geoscientists & Engineers (EAGE).

Glossary

Bcf: Billion standard cubic feet

mmbbls: million barrels

mmboe: million barrels of oil equivalent

mmscfd: million standard cubic feet per day

bopd: barrels of oil per day

boepd: barrels of oil equivalent per day

PDP: Proved Developed Producing Reserves

PDNP: Proved Developed Non Producing Reserves

PUD: Proved Undeveloped Reserves

Reserves: Reserves are those quantities of petroleum that are anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. Reserves must further satisfy four criteria, based on the development project(s) applied: discovered, recoverable, commercial and remaining (as of the evaluation date).

P1 Reserves: Include PDP, PDNP and PUD Reserves

IMPORTANT INFORMATION

This announcement includes "forward-looking statements" which include all statements other than statements of historical fact, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations, or any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or similar expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this document. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law or the AIM Rules.

Nothing contained herein shall be deemed to be a forecast, projection or estimate of the future financial performance of the Company or any other person.

This announcement is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into Canada, Japan or the Republic of South Africa or any jurisdiction into which the publication or distribution would be unlawful. This announcement is for information purposes only and does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire shares in the capital of the Company in Canada, Japan, New Zealand, the Republic of South Africa or any jurisdiction in which such offer or solicitation would be unlawful or require preparation of any prospectus or other offer documentation or would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America.  This announcement is not an offer of securities for sale into the United States.  The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration.  No public offering of securities is being made in the United States.