Ascent Resources plc (AIM: AST), the European oil and gas exploration and production company, provides the following update on progress towards its goal of delivering gas in 2016 through its alternative route to market and the Integrated Pollution Prevention & Control (“IPPC”) Permit application for the installation of a gas treatment facility in Slovenia.
Route to first gas
The Company’s preferred route to market for some time has been one independent of the IPPC application process as this is cheaper and quicker than the IPPC route.
In the past few days one of the two legal agreements required to progress this route has been agreed by the project team and is now with the various boards of the entities concerned for formal approval. The second agreement is at an advanced stage and the expectation of the project group is that it will be approved before the end of June.
Signing the agreements on schedule means that the Company will be positioned to achieve its goal of commercial gas production in 2016. Accordingly, the Company has begun to issue purchase orders for some of the longer lead items required to commence production and looks forward to providing shareholders with a more detailed explanation of the route once contracts have been signed.
IPPC Permit
On 5 May 2016, the Administrative Court returned the IPPC application to the Slovenian Environment Agency (“ARSO”) on the basis that the application should have followed regulations brought into force after our application had been submitted. This was despite these new regulations specifically stating that applications already submitted should continue to follow the prior process. The Court did not find any fault with the content of the application.
Since the decision of the Administrative Court, the Company has held a series of meetings with its partners, lawyers, consultants and government officials. Having taken advice from retained and independent legal experts, the Board remains satisfied that the application submitted on behalf of the joint venture (“JV”) was fully compliant with Slovenian law. The Company will make every reasonable effort to ensure that this unexpected, and in the Board’s and its advisers opinion, clearly wrong decision, is corrected.
The current position is that we have been informed that ARSO will request that the JV partners carry out a preliminary screening procedure under the new process. This procedure would then be reviewed by ARSO to determine whether a full environmental impact assessment is required.
Ascent does not intend to perform a repetitive preliminary screening or an environmental impact assessment as the original application to the ARSO and the Environment Minister had been approved. To repeat these reviews and assessments would not add to the ARSO’s understanding of the nature of the project and is therefore unnecessary and time consuming bureaucracy.
The Company has received advice that an appeal to a higher court in Slovenia is possible and we hope that an alternate court may come to a conclusion more consistent with Slovenian law. The Company also understands that it has grounds for an action for damages against the Slovenian government and the Company intends to pursue every available avenue for redress.
Nevertheless, the Company still views the installation of a gas processing plant in Slovenia as a long term route to market and hopes that this can be achieved without undue delay.
For more information, please visit:
http://www.ascentresources.co.ukFor additional information on this project, please visit our Projects OGP database
