Ascent Resources Plc (LON:AST) Chief Executive Officer Colin Hutchinson caught up with DirectorsTalk for an exclusive interview to discuss the final result highlights, the IPPC permit, a second route to gas and the exciting milestones for 2016
Q1: Now good news this morning in the results, can you talk us through the highlights?
A1: Yes, I think the good news this morning is that we’re continuing to move forward with the routes we have to market. We’ve got our IPPC permit hopefully getting a decision on that in the very near future, latest we’d hope by the end of June, that’s the permit that we need to put gas into the grid in Slovenia essentially, it allows us to build a processing plant and to have our gas sold through the national grid in Slovenia. We have an alternative route to market, we’ve two but the one exciting one is shipping unprocessed gas to a neighbouring country and having it processed there and we’re making good progress with that route as well. So hopefully this quarter we’ll have some good amount of good news on both routes.
Q2: You mentioned that the IPPC permit application is nearing its end and you must be feeling quite optimistic now, have you started putting long-held plans into action?
A2: Yes we have, Ascent Resources announced a few weeks ago that we’d issued the tenders for the metering station, there’s two main pieces of infrastructure we need to build to put gas into the national grid. The first one is the processing plant which requires the IPPC permit and that’s the one that’s taken a long time, the second one is the metering station at the entry point to the national grid which is sort of a kilometre and a half from the field, we issued that tender a few weeks ago and we’re beginning to see responses coming through on that. We raised some money towards the beginning of April, those funds allow us to trade through once we have one of these clear routes through to market and it also enables us to do some of the propriety work that we need to so we’re ready to move forward once the permit arrives. This second option provides a good test phase before we move into the full IPPC gas to grid route.
Q3: Now the second route to gas looks like it’s going to bear fruit ahead of the first, can you talk us through that?
A3: The second route to market is where we have the gas processed in a facility in a neighbouring country and that is attractive for two real reasons. The first it is likely to be quicker, we don’t need to construct a big processing plant, we don’t need to construct a complex metering station, it requires a bit of an upgrade to existing infrastructure, a small metering station, and we would be ready to produce and we’re still hopeful that that, if we can get the agreements signed up soon, we can be producing gas that way by the end of this year. So it’s attractive because it’s quicker, it’s attractive obviously because it’s quicker, it brings in revenues more quickly which is very welcome, it’s also cheaper, a lot less CapEx required doing that route. So that is very interesting for the company, it would allow us to get into production very quickly, prove what the wells do, prove what the reservoirs do and then we’d still build out our own processing plant and put gas into the grid because this project should scale significantly that that’s the much more economical way to do things.
Q4: Now it sounds as if you’ve got some exciting milestones coming up, is 2016 going to be a good one for Ascent Resources?
A4: Yes, I’m very hopeful that it is going to be a good year, Ascent Resources has gone through a lot probably over the last couple of years, and shareholders have definitely gone through a lot, as we’ve navigated the IPPC process, a process that wasn’t expected to take as long as it has. We’re now at the end of that process and we’re very hopeful of getting a good result in the next few weeks hopefully, certainly by the end of June, and with the second option on the table 2016 could be very exciting and we could see gas revenue which would be a fantastic result.
