Ascent Announces Introduction of Cornerstone Investor and Signature of Collaboration Agreement

Source: 10/3/2023, Location: Europe

Ascent Resources Plc the onshore Hispanic American and European focussed energy and natural resources company, announces the signature of a Strategic Collaboration Agreement with investment company MBD Partners SA ("MBD") alongside agreeing a material strategic equity investment at a significant premium and the right to propose the appointment of a new nominated Non-Executive Director.

Strategic Collaboration

The Company continues to pursue a growth strategy away from Slovenia and evaluate a number of opportunities consistent with the Company's strategy to grow in onshore oil and gas, oil services, mining and ESG Metals. MBD is an investment company wholly owned and controlled by Mr Ibrahim Diab, a highly experienced natural resource investor with an existing portfolio of natural resource investments, as well as inventory of new business development opportunities thematically consistent with Ascent's strategy. Ascent and MBD have therefore signed a Strategic Collaboration Agreement pursuant to which they jointly review and evaluate business development opportunities with a view to positioning the Company to secure cash flows and material upside in the natural resources space.

Strategic Investment

In support of the collaboration, MBD has agreed to subscribe directly for £1,500,000 in new equity via a direct subscription (the "Subscription") at 3.5 pence per new share (the "Issue Price"), being an approximate 35% premium to the closing bid price of 2.6 pence on 2 October 2023. The Company has agreed to issue MBD with 42,857,143 new ordinary shares of 0.5p each ("Subscription Shares") at the Issue Price within two days of receipt of the cleared subscription proceeds of £1.5 million which are expected to be received no later than 13 October 2023. The Company has sufficient authorities to issue the shares out of its existing authorities.

The Subscription Shares shall have warrants attached to them on the below basis, subject to shareholder approval at a General Meeting to be held shortly;

- In the event the Company's wholly owned subsidiary Ascent Slovenia Limited ("ASL") wins its arbitration claim against its Slovenian JV Partner in relation to the parties different interpretations of the application of the baseline production profile, then MBD shall be granted new five year warrants equivalent to 150% of their subscription amount at 5 pence per new warrant share, and exercisable, in full or in part, by paying the cash value of the exercise price to the Company.

- And in the event ASL loses the JV Partner arbitration claim then MBD shall instead be granted new five year warrants equivalent to 200% of the Subscription amount exercisable at 3.5 pence per new warrant share, and half of these warrants shall have a cashless exercise, in full or in part, feature included, while the other half shall only be exercisable, in full or in part, by paying the cash exercise price.

Following completion of the subscription MBD Partners SA, and by virtue of his 100% control of MBD also Mr Ibrahim Diab, will have an interest in 20.54% of the Company's enlarged share capital and accordingly will be classified as a related party. Application will be made to the London Stock Exchange for the Subscription Shares to be admitted to trading on AIM ("Admission") following receipt of the Subscription proceeds. Further announcements will confirm Admission and changes to the Total Voting Rights.

The Company has signed an industry standard Relationship Agreement with MBD. Subject to the completion of the proposed Subscription and Strategic Investment, MBD shall have the right to nominate a new non-executive director to the Board of the Company.

In preparation for execution of the combined business development opportunities identified in the Strategic Collaboration Agreement, the Company also expects to review its Board composition.

James Parsons, the Company's Chairman, commented:

"This is a highly advantaged subscription despite difficult markets, which serves both to fund the business at a premium whilst also de-risking our near term inflection point with the expected Slovenian arbitration result. We are delighted to welcome MBD as a cornerstone shareholder and look forward to refining and delivering our strategy together. We believe this partnership will create both momentum and value for our shareholders and look forward to updating the market on our progress in due course."

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