Summary of BRR MEDIA Interview with Coin Hutchinson, CEO Ascent Resources, 24/04/2017
Colin today confirmed the debt on the balance sheet was SIGNIFICANTLY reduced in the 2016/17 period, half the debt disappearing during 2016 with administrative costs further reduced !
He was on site just over a week ago and was delighted to see the gas being turned on and going on sale.
There is a workforce on the ground this week at PG11 who will be moving the equipment ready to re-complete sometime in May and then this will be followed by gas sales to INA.
With regards to the assets, Colin stated ' t he assets are 'hugely significant ' and the independently assessed gas in place will supply Slovenia for a considerable time."
PG10 and PG11 have been proven to flow at commercial rates and the company are looking at bringing on new wells, re-habilitating old wells and boosting production to a stable level, thereby generating s ignificant cash revenues .
The issue I see with AST at this point in time is not the permit. The company can sell their gas without that for now, albeit for a smaller revenue and the outcome will eventually be in Ascents favour. It is in the Slovenian interest to ensure this. For investors, new and old, it is now about placing a value on the company and I believe this is where Colin Hutchinson is between a rock and a hard place in that until it can be shown the gas is stable, that the flow rates can be maintained and increased where necessary, any figures at this stage could well prove to be wholly inaccurate by the end of the first month's supply and more-so by the end of the first quarter. Any announcement stating less than estimated would immediately result in the usual forum abuse and market devaluation.
Shareholders are stuck between the rock and the hard place with him on this one and whilst every investment is a gamble, it does offer an incredible opportunity to buy into what will likely be a solid long term, profit making business at an attractive price.
If people can exercise patience, I have no doubt Ascent resources will be an attractive long term play.
When Henderson's eventually offload the convertible loan notes, I am confident AST will soar past the 4p level and find its new baseline which can then rise and fall with whatever achievements and failures follow.
Of course, it's most likely that the country will wish to control their gas themselves at some stage or at least ensure it is all under one roof where it can be nationalised or utilised for government revenue so AST will be sapped up and taken out. The longer this takes, the more gas will be coming on line and the better the offer. By the end of 2017 I see a strong value here.