ASCENT RESOURCES PLC

Capital/Financing Update • Feb 5, 2014

National Storage Mechanism | Additional information

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RNS Number : 2966Z

Ascent Resources PLC

05 February 2014

Ascent Resources plc

("Ascent" or "the Company")

Convertible Loan Note Issue

The Board of Ascent is pleased to announce that is has entered into an agreement with Henderson Global Investors Limited and Henderson Alternative Investment Advisor Limited (together, "Henderson") for the subscription by funds managed by Henderson of convertible loan notes of up to £5 million in principal amount ("Convertible Loan Notes" or "Loan Notes").

Use of Proceeds

The first £2 million of the Henderson Loan Notes will be drawn down in the next few days and will be used to fund existing project commitments in Slovenia.  The balance of the Loan Notes will be available for draw down, if required, to allow the Company to continue to make further progress towards securing the necessary permits required for gas processing facilities and pipelines in Petišovci in advance of full project finance for the construction phase of the development. If fully drawn down, the £5 million should, with suitable project funding, finance the project through to a stage where it becomes self funding.

Methanol plant

A positive development in Slovenia has been the commencement of investment by Nafta Lendava and a third party in a methanol plant adjacent to the Petišovci gas field. The methanol plant, with a daily requirement for 450,000 Sm3 of natural gas has not been operational for three years.  Ascent expects that once the methanol plant is operational, following a period of refurbishment and testing, there will be an opportunity to supply gas to the plant.  Gas sold to the plant would not need to be treated at the gas processing facility planned for the Petišovci field.  In this event, income could be generated from Q3 2014 without relying on the completion of permitting and construction work which is focused on the establishment of a new processing plant and connection to the international gas pipeline network.

Details of the Convertible Loan Notes

The Convertible Loan Notes will be issued in units of £1 and interest will be at a fixed rate of 9% per annum, which will be rolled up quarterly in arrears and included as principal to be repaid or converted. It is not currently intended that the Loan Notes be listed on any stock exchange or other market although Henderson may elect to seek a listing of the Convertible Loan Notes at its discretion. The Convertible Loan Notes will be unsecured will be convertible at any time into ordinary shares of 0.1 pence each in the share capital of the Company ("Ordinary Shares") at the holder's option, at a conversion price of 1 pence per Ordinary Share ("the Conversion Price"). The Conversion Price is subject to change as described below.

The Company's obligation to convert the Loan Notes is conditional upon the Company having the appropriate shareholder authority to permit conversion, which is intended to be sought at the time of the Company's AGM in Q2 2014.

It is the intention that the issue of the Loan Notes will be by way of subscription for an initial tranche of £2,000,000 (the "Initial Tranche") followed by subscription for six additional tranches of £500,000 each (the "Additional Tranches").  Following subscription for the Initial Tranche by Henderson, the Company intends to market the Additional Tranches to independent third party investors acceptable to the Company and Henderson. Each third party investor must commit to acquire at least £1 million in principal value of the Loan Notes convertible at a Conversion Price in the range of 0.75 pence to 1.0 pence. Any such Conversion Price agreed with third party investors shall apply to all Loan Notes issued. In the event that Henderson subscribe for two or more of the Additional Tranches the Conversion price for all Loan Notes issued will be 0.5p.

Outstanding payments

As at the date of this announcement the first instalment of £500,000 of the £1 million subscription due from Global Power Sources s.r.l. ("GPS") pursuant to the terms of a subscription agreement with GPS, announced on 18 December 2013 has not been received by the Company. Further announcements concerning this debt will be made in due course.

Related Party Transaction

Henderson is a substantial shareholder in Ascent, holding approximately 12.6% of the voting rights of the Company and as such is considered to be a related party of the Company as defined by the AIM Rules. The issue of the Convertible Loan Notes is therefore a related party transaction pursuant to AIM Rule 13. The directors of the Company, having consulted with the Company's nominated adviser, finnCap Limited, consider that the terms of the Convertible Loan are fair and reasonable insofar as the Company's shareholders are concerned.

Enquiries:

Ascent Resources plc.

Clive Carver / Len Reece

Tel: +44 (0)20 7251 4905

finnCap (Nominated Adviser and Broker)

Matthew Robinson / Charlotte Stranner  

Tel: +44 (0) 20 7220 0500

This information is provided by RNS

The company news service from the London Stock Exchange

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