Ascent Resources : Interim Report Six months ended 30 June 2021

Interim Financial Statements

Six months ended 30 June 2021

Company Number 05239285

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Ascent Resources plc

Interim Financial Statements for the six months ended 30 June 2021

Chairman and CEO's statement

Despite the continuing global pandemic, Ascent has advanced across multiple fronts following the restructuring of its Board, strategy, and portfolio last year. The business's new strategic platform is now taking shape, with the opportunities that brings.

First, the Company has made a significant step forward in securing funding for its international arbitration proceedings against the Republic of Slovenia with the signature of non-binding heads of terms with Enyo Law LLP. These heads define the terms under which the specialist arbitration and litigation legal firm shall represent the Company on a fully contingent basis through a damages-based agreement for the pursuit of the claim in arbitration in relation to breaches of relevant investment treaties arising out of and in connection with the Notice of Dispute sent on 23 July 2020. The Company is currently negotiating final binding documentation for this funding.

Secondly, the Company broadened its strategy to include the ESG Metals asset class and is now in the process of originating and negotiating its maiden transaction. The Directors believe this is a new exciting and burgeoning target sector to grow the Company.

Slovenia

As announced in March, the Company is advancing towards initiating international arbitration proceedings against the Republic of Slovenia under the Energy Charter Treaty and UK-Slovenia Bilateral Investment Treaty. In June, the Company announced that it had signed a non-binding, heads of terms with Enyo Law LLP, a specialist arbitration and litigation legal firm (the "Firm"). This agreement intends to engage the Firm to pursue the Company's claims on a success-only fee arrangement. Upon completion of definitive documentation, the Firm will only be paid out of the proceeds of the arbitration in the event of a successful damages award or execution of a binding settlement agreement if achieved sooner. This non-equity dilutive, non-recourse and full funding proposal is the preferred solution from the Company's perspective, notwithstanding that the Company has other alternative offers also under discussion.

Operations at the Petišovci project continue to produce gas, albeit at lower levels as a result of the field performance decline and current inability to re-stimulate the producing PG-10 and PG-11A wells. Total production for the six months to 30 June 2021 was 751.14 thousand cubic metres of gas and 33,512 litres of condensate. Gas sales continue with production being sold to local industrial buyers. The region is currently experiencing very high gas prices with the average Day Ahead Market gas price being Eur 51.0 / MWh as at 1 September, 2021. The JV expects to continue producing, thereby taking advantage of strong current prices.

ESG Metals Strategy

As announced in February, the Company has broadened its natural resources mandate to include a focus on ESG Metals, which it sees as a new and burgeoning target sector to grow the Company. ESG Metals includes secondary mining and re-treatment and recovery opportunities which the Company sees as being consistent with Environmental, Social and Governance ("ESG") principles. Typically, these involve the reclassification, through highly efficient recovery techniques, of stockpiled surface mining waste (previously viewed as a liability for mining companies) as a valuable asset for reprocessing and commercial sale to industry, governments and metals traders.

The Company sees waste management, remediation and restoration of land impacted by historic and ongoing mining activities as a critical element in the global ESG agenda and integral to the transition to a low carbon economy. The Company is looking at a number of potential projects in Hispanic and Latin Americas, the Caribbean, and South Africa, as well as Europe. In particular, the Company believes there are good opportunities in gold, silver, platinum, base metals and ferrochrome, where the economics are especially attractive and the opportunity set has the ability of delivering lowest cost quartile sustainable metal production from legacy mining tailings, with low geological risk. Such opportunities have the potential to provide strong cash returns without exploration risk and only require modest upfront capital outlay.

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Ascent Resources plc

Interim Financial Statements for the six months ended 30 June 2021

Cuba Market Entry

The Company continues to retain optionality to enter the Cuban Oil and Gas industry, once COVID 19 restrictions are lifted and possibly after the outcome of recent civil unrest is clarified. As announced in August last year, the Company transmitted the draft documentation in relation to its operating credentials to Union Cuba-Petroleo ("CUPET"), Cuba's national oil company, and the Oficina Nacional de Recursos Minerales ("ORNM") and since then has received positive initial feedback towards accreditation as an onshore operator subject to funding.

Corporate

During the period in review the Company raised £1 million at an issue price of 10.1 pence per share by way of an oversubscribed subscription and placing of new shares to institutional investors and existing shareholders to fund the Company's general working capital and ESG Metals business development activity.

Outlook

The team continue to work diligently across our key corporate priorities which include funding the Slovenia ECT claim and delivering a maiden ESG metals transaction. We look forward to delivering success for our shareholders at Ascent Resources plc and to re-engaging face to face with them now that COVID restrictions in Europe have eased.

James Parsons	Andrew Dennan
Executive Chairman	Chief Executive Officer
8 September 2021	8 September 2021

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Ascent Resources plc

Interim Financial Statements for the six months ended 30 June 2021

CEO's report

Financial performance

Revenue for the first six month of 2021 was £nil, as per the prior period. Closing cash at 30 June 2021 was £766,000 compared to £304,000 in the prior period.

During the period the Company raised £1m before costs in an equity placing in February 2021. There was a cash outflow from operations of £824,000 and an inflow of £1,475,000 from financing, resulting in net cash flow of £651,000.

Operational performance

					May
Production KPI's	Jan 2021	Feb 2021	Mar 2021	Apr 2021	2021	Jun 2021
Total gas (k scm)	131.82	136.17	155.10	143.08	99.17	85.80
Total gas (MMcf)	4.66	4.81	5.48	5.05	3.50	3.03
Average daily gas (k scm)	4.25	4.86	5.00	4.77	3.20	2.86
Average daily gas (Mcf)	150.17	171.74	176.69	168.43	112.97	101.00
			17,496.0
Total condensate (liters)	2,808.00	2,354.00	0	5,346.00	3,834.00	1,674.00
CGR (liters per 1000 scm gas)	21.30	17.29	112.80	37.36	38.66	19.51
BOE - gas	802.39	828.87	944.09	870.93	603.65	522.26
BOE - condensate	17.63	14.78	109.87	33.57	24.08	10.51
Total BOE	820.02	843.65	1053.97	904.50	627.73	532.78

Total production for the six months to 30 June 2021 was 751.14 thousand cubic metres of gas and 33,512 litres of condensate.

Gas sales to INA remain suspended as wellhead pressure is below the export pipeline pressure. The sales contract remains valid and should the Company increase production gas sales may be able to be resumed. The Company produced gas in the year to date which was sold locally to an industrial buyer through a low-pressure pipeline, however the revenue from this is less than the fixed costs of the field and pursuant to a deal agreed in Q4 2019 the Company is not currently receiving any revenue from this declining production, with the proceeds being retained by the operating service provider to pay towards their fixed costs.

Consolidated Income Statement

for the Period ended 30 June 2021
	Period ended	Period ended
	30 June	30 June
	2021	2020
Notes	£ '000s	£ '000s
Revenue	-	-
Cost of sales	(25)	(59)
Depreciation of oil & gas assets	(194)	(230)
Gross profit	(219)	(289)
Administrative expenses	(826)	(945)
Loss from operating activities	(1,045)	(1,234)
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Ascent Resources plc

Interim Financial Statements for the six months ended 30 June 2021

Finance income		-	-
Finance cost		(10)	(9)
Net finance costs		(10)	(9)
Loss before taxation	2	(1,055)	(1,243)
Income tax expense		-	-
Loss for the period after tax		(1,055)	(1,243)
Loss for the period attributable to equity shareholders		(1,055)	(1,243)
Earnings per share
Basic & fully diluted loss per share (£)	4	(0.01)	(0.03)

Consolidated Statement of Comprehensive Income

for the Period ended 30 June 2021

	Period ended	Period ended
	30 June	30 June
	2021	2020
	£ '000s	£ '000s
Loss for the period	(1,055)	(1,243)
Other comprehensive income
Foreign currency translation differences for foreign operations	(776)	1,835
Total comprehensive gain / (loss) for the period	(1,831)	592

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