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Ascent Resources – positive permit assurances… but what’s happened with previous verbal assurances of support?

By Steve Moore | Thursday 9 August 2018


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


After an “Operational Update” from Ascent Resources (AST), despite stating “pleased with the progress of the strategic review”, had seen the shares crashing at the start of this week, they are currently soaring on the back of a “Permitting update”

The earlier update, despite including the noted “pleased with the progress”, also included that “the strategic review has been undertaken against the backdrop of further permitting delays in Slovenia, which has deterred a number of otherwise interested parties”. It added, “the board has grown increasingly frustrated by the continued requests from the Slovenian Environment Agency ("ARSO") for amendments and further information on areas which the company believed had long been agreed. The lack of concrete action from Slovenian politicians, despite their verbal assurances of support, is also disappointing”.

The company now updates including that “the announcement of 6 August seems to have provoked action in Slovenia, which, in the company's opinion, should result in the permits being awarded in the next two months”, with CEO Colin Hutchinson adding that “following the assurances that have been made over the past few days we have fresh optimism that the long-awaited permits should be delivered in short order”.

Potentially good news then – though I note the previously stated lack of concrete action despite verbal assurances. Additionally, the prior update also included detail of savings just which “could, in aggregate, allow the company to continue to trade to the end of the current year” and that “even when permits are finally delivered, the company will require funding for the capital programme to re-stimulate the wells before production revenues are increased”.

In this context, the current share price rise to well above the levels of before the 6th August update seems to overplay things – though that it has also been necessary for Ascent to state “while the company understands shareholders' frustrations, it does not believe that shareholders contacting ARSO directly can have any positive impact on the process and has apologised to ARSO, in particular for those emails which have been threatening and abusive”, shows the mentality of some involved in this stock. With the weak financial position and the operational position only at this stage potentially better – and, even then, only after further funding, I avoid.


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