16th Dec 2015 10:21
LONDON (Alliance News) - Ascent Resources PLC Wednesday said it aims to be producing gas from the Petisovci field in Slovenia in the third quarter of 2016 after making a decision about how to bring its gas to market.
Ascent has been focused on securing an Integrated Pollution Prevention permit for the field which would allow the company to build a gas treatment works to process the gas produced before selling it to the market.
However, Ascent has faced objections and delays in securing that permit, which has pushed the company's schedule back and forced it to look at other ways of selling its production without building the gas treatment works, allowing it to move forward without the permit.
On Wednesday, Ascent said it has come to a decision and outlined plans to start production from the field in the third quarter of 2016, which will then be processed by third parties before being sold.
That would allow the company to get some production and sales through the door whilst it waits for the permit needed to build its own processing facilities. The company is hoping to sign binding deals with the third party processors in the first quarter of 2016.
"The company believes that the most viable route will be through using a combination of new and existing pipelines to contract out the processing of the gas from the Petisovci field," said Ascent.
Ascent is confident it will be awarded the permit sometime in 2016, which is currently being hampered by objections. If it can secure the permit, Ascent can build its own gas treatment works to begin treating its own production.
To put the permit into some for of perspective, Ascent applied for it back in June 2014 and was provisionally awarded the permit in June 2015. However, two organisations objected to that permit being awarded, with one of them dropping their objection since.
The other objector decided to appeal through the courts, which is currently in its "final step" in the Slovenian courts. Ascent said guidelines suggest the court will make a decision within six to nine months, but admitted "it is not possible to estimate with certainty how long the process could last".
"Based on legal advice and the consistent rulings of the various regulatory bodies concerned to date, the board of Ascent remain confident that the permit will be awarded in 2016," said Ascent.
Ascent said the appeal should not affect the short term prospects of the project and looked on the bright side by highlighting the wait for a decision would "improve the company's cash balance" because it will not need to raise the capital expenditure to build the gas treatment works until the fourth quarter of 2016 - later than originally expected.
Ascent said pushing back the fundraising for the gas treatment works was beneficial because it hopes to be generating revenue using its plan to use third party processor by the time it raises the funds needed to build its own works.
"We are pleased with the progress that is being made towards our goal of producing gas from the Petisovci field by the third quarter of 2016 and generating income. Whilst the final appeal will delay the granting of the permit and the construction of the gas treatment works we are confident that the alternative route to market represents the better option for the company, at present," said Clive Carver, chairman of Ascent.
Ascent shares were trading up 5.3% to 1.0 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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