Cuba Operator Application and New Funding

6 August 2020

Ascent Resources plc

("Ascent" or the "Company")

Cuba Operator Application
New Funding, Repayment of Debt &
Appointment of Joint Broker

Ascent Resources Plc (LON: AST) the onshore Caribbean, Hispanic American and European energy and natural resources company, is pleased to announce submission of its application to become an operator in Cuba alongside a total funding package of £700,000  (debt plus equity, with the equity being at a nil discount).

The application has been transmitted to Union Cuba-Petroleo ("CUPET"), which is Cuba's national oil company and also the counterparty to the memorandums of understanding which provide Ascent with exclusivity to negotiate the production sharing contracts to onshore producing block 9B and onshore  blocks 9A, 12 and 15.

It is expected that the documents will follow the official process established under Cuban Law which, if successful, ultimately results in the Oficina Nacional de Recursos Minerales ("ORNM") establishing Ascent as an independent international oil and gas operator in Cuba. The Company looks forward to updating investors on progress of this application alongside production sharing contract negotiations and the in-house build of subsurface models which will enable the previously announced production led strategy to be advanced.

New Funding

To enable the Company's continued progress across both Cuba and Slovenia as well as the execution of its Special Situations Strategy, as announced on 28 May with the publication of a new Corporate Presentation, the Company announces it has implemented a funding package, consisting of both equity and debt.

This equity fundraising has raised gross proceeds of £300,000 from the issue of 15,000,000 ordinary shares of 0.5 pence at 2 pence per share ("Fundraising Shares"), being a nil discount to the closing bid price of the Company's ordinary shares of 2 pence per ordinary share on 5 August, being the latest practicable date prior to the publication of this announcement. The Company has also issued the equity investors with one warrant for every two shares exerciseable at 4 pence per new warrant share at any time over the next two years.

The Company has also agreed to issue a further 1,500,000 ordinary shares of 0.5 pence at the placing price of 2 pence per share ("Supplier Shares") in respect of an invoice received from a supplier who has agreed to receive the payment of their £30,000 invoice in shares, which they have agreed to hold and not sell for a minimum period of at least 3 months.

The issue of the Fundraising Shares and the Supplier Shares is being carried out within the Company's existing share authority to issue ordinary shares for cash. Application will be made to the London Stock Exchange for the Fundraising Shares to be admitted to trading on AIM and it is expected that the Fundraising Shares will be admitted to trading on AIM at 8.00 a.m. on or around 27 August 2020.

In accordance with the provision of the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, the Company confirms that, following the issue of the Fundraising Shares, its issued ordinary share capital will comprise 75,609,652 ordinary shares. All of the ordinary shares have equal voting rights and none of the ordinary shares are held in Treasury. The total number of voting rights in the Company will therefore be 75,609,652. The above figure may be used by shareholders as the denominator for the calculations to determine if they are required to notify their interests in, or change to their interest in, the Company.

The debt element of the fundriaising is a definitive loan agreement with Align Research Limited (the "Lender") to provide, in aggregate, £400,000 through an unsecured loan facility ("Loan Facility"), for working capital purposes in support of the execution of the Special Situations strategy. The Loan Facility, which is aimed at minimising dilution at current prices, provide for the loan ("Loan") to be drawn down,  in three tranches being £100,000 on 15 August 2020, £100,000 on 3 September 2020 and £200,000 on 4 October 2020. The Loan plus a fixed coupon of 8% is repayable in full on maturity (except where the Lenders request part or all of the Loan and any coupon to be utilised in paying for the warrants), which is the 31 March 2021 (the "Repayment Date").

As part of the Loan Facility, the Company will issue a total of 16,000,000 warrants to the Lender (the "Warrants").  The Warrants are only excercisable at or above 4 pence per share (a 100% premium to the current bid price), at which point the holders can subscribe for ordinary shares in the Company at 2.5p per share, or at the future placing price of any subsequent fundraise during the first 12 months of the Warrants being issued if lower than 2.5 pence. The Warrants have a life of two years from the signing of the Loan agreement.

Early partial repayment of RiverFort Global Opportunities PCC Limited

In addition and as part of the ongoing clean up of the Company's balance sheet and historic obligations, the Company has agreed to repay a total of £135,000 of the outstanding RiverFort loan of £375,020, which has now resulted in the balance outstanding being reduced to £240,020 which is due to mature on the 11 February 2022.

Appointment of Joint Broker

The Company is pleased to announce Novum Securities Limited have assumed the role of Joint Broker alongside Nominated Advisor and Joint Broker, WH Ireland.

Andrew Dennan, the Company's Chief Executive Officer, commented:

"I am delighted with our progress as we advance our strategy to secure a potentially high impact hydrocarbon and mining portfolio across Hispanic Amercia.  This initially includes a blend of existing production and exploration blocks in Cuba spanning over 7.000 km2 with multiple historic oil shows and discoveries.   

The funds secured today enable us to accelerate our journey into the Cuban upstream E&P space whilst also progressing on pre-identified Special Situations opportunities, all with a careful eye to minimising equity dilution at current levels."

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