Ascent Resources Plc (LON:AST) Chief Executive Officer Colin Hutchinson caught up with DirectorsTalk for an exclusive interview to discuss their latest operational update, the progress of PG-11A, where they are with the IPPC permit and 2017 being a transformational year for the company
Q1: You’ve put out an operational update this morning and things seem to be coming on quite well. Can you talk us through what’s been happening with your plans around gas production?
A1: Yes, the update this morning, delighted to be able to announce that within a matter of weeks we’re going to be able to bring gas to market, initially from PG-10. It’s fantastic news, the company’s been involved here for such a long time and it’s been a long struggle to get the first gas so being able to say that’s a matter of weeks away is extremely pleasing. We’re initially going to sell to a local corporate customer which is something that we’ve done so we can get the well into production quickly and get some revenue. I have been intending to lease some equipment to allow us to produce INA quickly but that equipment, there’s a minimum term, that of 6 months, and it’s quite expensive to rent and also it’s happens to be following the PG-10 flow test results, we’ve been able to come up with a different way to dehydrate the gas, to put it into the INA pipeline which is much quicker and much cheaper so I didn’t really need this kit for 6 months because I’m going to be producing to INA with her own equipment before then. So, we’re going to produce gas to this local consumer for a while whilst we do the work that’s required to send the gas to INA and that’s going to work out much cheaper as well which is the other good point on the revised INA plant so there’s a lot of good news in the announcement today.
Q2: Now, you have another well, PG-11A, how’s that going?
A2: PG-11A, we are in the process of planning the work, we’ve agreed the contract with the rig which is owned by one of our partners, Petrol Geoterm, and we’re in the process of sorting pipes and all the equipment and services that we need and we’ll tick off that work in April. It’s expected to take around 4 weeks although it’s always hard to tell with these things and that will enable us then to have PG-11 ready and ready for production hopefully in May or June.
Q3: Finally then, the IPPC permit remains under review with the Slovenian courts, are you still optimistic that Ascent Resources will be granted that permit and what will that allow you to do?
A3: I’m still optimistic on the permit, I’ve no reason to believe that the Environment Minister would overrule the decision of the environment agency or would go against the decisions that have been made over the last few years with every stage, bar the Administrative Court, we received a favourable opinion so I’m really hopeful that’ll continue. Timing wise, it’s impossible to predict, I get asked this question on a fairly regular basis, when are we going to get the permit and I’m always asking people here in Slovenia, when’s the permit going to arrive and no one can really tell you, there’s no fixed deadline or timeline. Given the length of time that it’s been since we got the last favourable decision, which was in November, I’d be hopeful of getting a decision back from the Minister shortly but it’s impossible to say. At the minute, we’re focussed on getting the initial production started and sending gas to INA and getting the first two wells done, the IPPC permit then is important for the second stage of the project where we bring more wells into production, boost the production rate significantly and start to treat our gas locally and put it into the grid here for the benefit of us, our partners and the Slovenia economy as a whole.
Q4: So, all in all, 2017 looks to be a transformational year for Ascent Resources?
A4: It’s certainly shaping up that way, it’s been a good year so far, we obviously had the flow test of PG-10 which was a fantastic result in February and in March, we were able to announce that gas is coming and we’re targeting the end of March for first gas but it looks like it’s going to slip into April. Ascent has been in Slovenia for 10 years so it’s actually 10 years in the making so we can let it go another 2 weeks but yes, it’s been a transformational year so far. PG-10’s flow test was a great result, we’re going to be selling gas very shortly, we’re then going be recompleting PG-11 then we’re going to be sending gas to INA then hopefully the permit comes somewhere along the way and we start to build our own treatment plant. So, yes, it’s shaping up to be good so far.