ASCENT RESOURCES PLC

Share Issue/Capital Change • Dec 18, 2013

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RNS Number : 8715V

Ascent Resources PLC

18 December 2013

Ascent Resources plc

("Ascent" or the "Company")

Funding Update, Issue of Equity and Resolution of Warranty Issues

Ascent Resources plc, the AIM listed European oil and gas exploration and production company is pleased to update the market as follows:

Funding update

The Company has entered into a subscription agreement with Global Power Sources s.r.l. ("GPS"), the purchaser of Ascent's former Italian Subsidiary, Ascent Resources Italia s.r.l. ("Ascent Italia") for the issue of 83,333,334 new ordinary shares of 0.1 pence each in the capital of the Company ("Subscription Shares") at an issue price of 1.2p per Ordinary Share, raising £1 million for the Company (the "Subscription"). The Subscription Shares will be subscribed in two tranches of £500,000 each in January and February 2014.

Additionally Ascent has entered into a short-term loan facility of up to £500,000 with Darwin Strategic Limited (the "Darwin Facility"). Under the terms of the Darwin Facility, a 5% commitment fee will be payable on the full amount on first draw down. Interest will be payable at the rate of 12% per annum on any amounts drawn down.  The Darwin Facility, which is not convertible, will be repayable in full, together with accrued interest, after 6 months.

The funds resulting from the Subscription and the Darwin Facility will allow the Company to continue to make 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.

Resolution of warranty issues

As announced on 22 July 2013, the Company sold its Italian Subsidiary, Ascent Italia, to GPS. The Company has since become aware of a number of matters, which may result in warranty claims under the terms of the Sale & Purchase Agreement ("SPA").

While no formal legal steps have yet been taken by GPS in relation to these matters and no admission of liability has been made by Ascent, the Company has taken legal advice on its position and the Company and GPS have agreed that, in return for a full waiver of any and all claims or potential claims by GPS under the SPA, Ascent will issue 275 million ordinary shares of 0.1 pence each in the share capital of the Company to GPS (the "Settlement Shares") ("the Settlement"). 268 million Settlement Shares will be issued immediately, credited as fully paid, at a price of 1.2p per Ordinary Share.  A further 7 million Settlement Shares will be issued, credited as fully paid, following approval by shareholders of a resolution authorising the issuance of these shares which will be put to shareholders at the next General Meeting, or Annual General Meeting of the Company.

An Orderly Markets agreement for a period of 12 months has been entered into by the Company and GPS in connection with the Settlement Shares, under which disposals of the Settlement Shares (except in acceptance of an offer for the Company) must be effected through the Company's brokers with a view to maintaining an orderly market in the Company's shares.

Admission and Settlement

Application has been made for the admission to trading on AIM of 268 million Settlement Shares ("Admission"). Admission is expected to occur on 20 December 2013. As at Admission, Ascent will have 1,451,114,395 Ordinary Shares in issue.  A further announcement regarding the admission to trading on AIM of the first tranche of Subscription Shares, which is expected to be in January 2014, will be made in due course.

Following Admission, the GPS or its affiliates ("GPS Group") will be beneficially interested in 300,126,793 Ordinary Shares, representing 20.7 per cent. of the issued share capital, and 11.7 per cent. on a fully diluted basis.

Under the terms of the Settlement and the Subscription, so long as GPS Group holds more than 20 per cent. of the issued share capital of Ascent before the conversion of existing convertible Loan Notes, GPS has the right to nominate a director to the Board of the Company. Further details will be announced as and when a director is appointed.

Len Reece, Ascent's Chief Executive Officer, commented:

"We are pleased to have resolved the issues surrounding Ascent Italia's assets in a constructive and amicable manner and welcome GPS as a significant and supportive shareholder.  The funds provided from the Subscription and the Darwin Facility will allow permitting and other preparatory works to continue at full pace, while project finance for the construction phase is finalised."

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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