Ascent Resources plc said that, due to a legal amendment, it did not expect to complete certain work relating to hydraulic stimulation of its operating gas wells in Slovenia.
LAW AMENDMENTS
The company also expects to increase its claim for damages due to a further breach of the Energy Charter Treaty (ECT) and UK-Slovenia Bilateral Investment Treaty (BIT).
Ascent said that changes to the Slovenia Mining Act, adopted on 6 April, included a ban on holders of mining rights from conducting “exploration or exploitation of hydrocarbons with the use of any form of hydraulic stimulation”.
“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,” added the company in a statement.
“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.”
DAMAGES CLAIM
Ascent said it had been deprived of the full value of its investments in Slovenia given that it had always expected to continue “the historic practice 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.”
Ascent added that its lawyers had made “material progress” in relation to completing the binding damages based agreement, and expect to complete the paperwork in the coming weeks.
OPERATIONS
The company and its joint venture (JV) partner Geoenergo continue to produce gas and condensate to sell domestically to local industrial buyers.
In March 2022, the PG-10 and PG-11A wells produced more than 140,000 scm of gas which was sold with a monthly volume weighted average price of circa €140 / MWh, resulting in
This resulted in more than €220,000 of gross invoiceable revenue net to Ascent’s interest in these two wells.
The company is reviewing future field development opportunities and all previously envisaged workstreams including the EIA permitting and concession extension processes.