Ascent Resources plc has expanded its US footprint with additional producing and prospective oil and gas interests in Colorado and Utah, for a total £3.25 million.
RESOURCES
The acquisitions, subject to shareholder approval to issue shares, follow the December 2024 acquisition of a 49% interest in helium-rich oil and gas licences in the Paradox Basin across both states.
Ascent aims to buy a 49% direct non-operated interest in leases in Colorado, owned and operated by Locin Oil Corporation, and an initial 10% direct non-operated interest in leases in Utah, owned and operated by ARB Energy LLC.
Locin’s portfolio covers more than 100,000 acres of oil, gas and helium-rich leases in west Colorado.
Ascent said that the leases have proved developed and proved developed non-producing resources of 8.06 billion cubic feet, net to the partners.
Of a total of 333 well bores, 115 wells are producing with average daily production of two million standard cubic feet throughout 2024, while a further three mmscfd is currently shut-in production.
Locin has also identified “up to 1.2% helium in the producing gas streams”.
Ascent will pay Locin $2.5m with the issue of 89,552,239 new shares for $600,000 and a three-year $1.9m convertible loan note at one pence per new conversion share.
The CLN also prevents Locin from holding more than 29.9% of Ascent’s enlarged share capital.
Ascent’s 10% acquisition in north Utah covers 80,000 acres also of oil, gas and helium rich leases.
ARB’s portfolio has proved developed and producing reserves, net to the partners, of 8.7 bcf of natural gas.
The leases have 147 well bores, of which 110 are producing at an average daily production rate of circa 2.3mmscfd throughout 2024.
ARB estimates the leases also have 44bcf proved undeveloped reserves, 23bcf probable reserves and 109bcf prospective resources of natural gas with potentially 1.3 bcf of helium.
The company will pay ARB $750,000 with 111,940,299 new shares and will also have a 50% economic interest in incremental production from existing well bores where it invests in work programmes.
Ascent has the option to acquire a further 23% direct interest for $1.5m in cash on or before 15 October 2025, and the right to an additional 50% direct interest in leases targeted for a future new well.
The company will issue ARB chief executive Humberto Sirvent, with 18,656,000 warrants in Ascent, exercisable at one pence per share over three years, subject to shareholder approval.
FUNDRAISE
Ascent added it had introduced cost saving measures and new fundraising for the company’s production led strategy in the USA.
Directors and executives will reduce the cash component of their salaries by 30% over the next six months, and general and administrative cash costs by 20% per annum.
The company raised £1.35m ($1.8m) through the issue of 270m new shares each at a 41% discounted price of 0.5 pence from company subscriptions and new institutional and strategic investors. Every two new shares have one warrant attached.
A total of £224,000 will be used to redeem in part some of the April 2024 Riverfort senior secured loan.
Riverfort will also receive 10,300,465 new Ascent shares at a 44% premium price to convert $100,000 of the loan principal.
The remaining Riverfort senior secured loan stands at $1.05 million which is extended to 22 April 2027.
Ascent further issued 2.5m shares as part of the final termination payment of a former director and 4,160,000 shares, valued at £20,800, to settle supplier invoices.
TVRs
Following admission of the shares for new funding, RiverFort conversion, termination payment and supplier invoices, the company will have 595,612,788 ordinary shares in issue, with voting rights and none held in treasury.
Ascent will put forward resolutions to increase its authority to allot new shares and warrants at its next general meeting.