PRESS RELEASE : ADM completes EER Transaction

 
 DGAP-News: ADM Energy PLC / Key word(s): Miscellaneous 
ADM completes EER Transaction 
 
2020-12-10 / 12:10 
The issuer is solely responsible for the content of this announcement. 
 
*THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE 
INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE 
REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, 
THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.* 
 
10 December 2020 
 
*ADM Energy PLC * 
("ADM" or the "Company") 
 
*ADM completes EER Transaction following receipt of Ministerial Consent* 
 
_ADM finalises deal to consolidate its interest in OML 113 and nearly double 
its net revenue, reserves and production_ 
 
ADM Energy PLC (AIM: ADME; BER and FSE: P4JC), a natural resources investing 
company, is pleased to announce that it has received ministerial consent 
from the Nigerian Minister of Petroleum Resources ("DPR") to complete the 
transfer of a participating interest of 2.25% in OML 113 (the "Block") from 
EER (Colobos) Nigeria Limited ("EER") to the Company. 
 
*Highlights* 
 
  · ADM acquires 25% of the interests, rights and obligations held by EER in 
  OML 113 
 
  · Participating interest in OML 113 will increase to approximately *4.9%* 
  from 2.7% 
 
  · Corresponding profit and cost bearing interests will increase from 5.0% 
  to *9.2%* and from 6.7% to *12.3%* respectively 
 
  · Net 2P reserves increase to *16.4 MMboe* from 8.9 MMboe (as announced on 
  2 May 2019) 
 
  · Net daily production is expected to rise to approximately *196 bopd* 
  from 106 bopd, based on current production 
 
*Peter Francis, Non-Executive Chairman of ADM Energy plc, said: *_"The 
completion of this deal consolidates our position in the Aje Field, a proven 
and versatile oil producing asset offshore Nigeria. We nearly double our 
share of revenue, reserves and net production, and with the joint venture 
partners targeting three new wells in 2021, net daily production to ADM is 
projected to rise to as much as 1,000 barrels per day._ 
 
"This transaction aligns with our growth strategy and is typical of the type 
of deal we want to achieve to build value for ADM. We have gained a strong 
foothold in an oil field that we understand intimately. We have de-risked 
the asset through our technical expertise and working alongside high-quality 
partners. Having completed the transaction at a premium to our share price, 
we now stand to benefit by developing the field and unlocking the upside for 
shareholders. Building on this platform, we are focused on advancing the 
multiple other deals we are working on and growing our exposure to value 
accretive, high-quality assets. 
 
"In addition, Hessia Group Limited, an existing investor in ADM and the 
beneficial holder of the Consideration Shares as part of the completion of 
this agreement, becomes the Company's largest shareholder and remains a long 
term and supportive holder of ADM shares." 
 
*Yinka Ogundare, CEO of EER, said: *_"We are very pleased to deepen our ties 
with ADM by concluding this transaction. Their expertise and access to 
funding will help the partners to move forward with plans to increase oil 
production at the Aje Field and monetise the rich gas and liquids 
reserves."_ 
 
*Background* 
OML 113 covers an area of 835km² in the western Nigeria offshore Dahomey 
basin, some 24km south of the coast and 64km from Lagos, in water depths 
ranging from 100 to 1,000 metres. The West African Gas Pipeline intersects 
the northwest part of the licence. There are currently five partners in the 
licence: Yinka Folawiyo Petroleum Company Limited, New Age Exploration 
Nigeria Limited, Pan Petroleum Aje Limited (whose interest was recently 
acquired by PetroNor ASA), EER and ADM. 
 
In February 2020, ADM entered into a sale and purchase agreement with EER to 
acquire, subject to certain conditions, a participating interest of 2.25% 
from EER in the Block ("the Agreement"). Following the receipt of DPR 
ministerial consent, these conditions have now been met and the title can be 
transferred to the Company subject to admission of the consideration shares 
noted below. 
 
*Details of Payment* 
The total consideration for the Agreement is US$3,000,000, originally 
intended to be satisfied by the issue of US$2,000,000 of new ordinary shares 
at 7 pence per share and US$1,000,000 in cash at the time of completion. 
 
In May 2020, the Company announced that it had paid a deposit of US$250,000, 
comprising US$125,000 in cash and US$125,000 in equity through the issue of 
4,242,696 new ordinary shares of 1 pence each at 2.4 pence per share at an 
exchange rate of US$1.23:GBP1. In August 2020, ADM and EER agreed that of the 
remainder of the cash component of US$750,000, US$250,000 would be settled 
in shares, at a price of 5.5 pence per share at the prevailing exchange rate 
at the time of completion, and US$500,000 would be settled in cash. 
 
The Company has paid US$100,000 of this remaining US$500,000 cash balance 
and reached a further agreement with EER to accept a convertible loan note 
(the "CLN") for the outstanding US$400,000, with an interest charge at 10 
per cent. per annum and the term of the loan being 18 months from 
completion. The CLN grants EER or its nominees the right but not the 
obligation to convert the loan of US$400,000 into new ordinary shares of 1 
pence each at 7 pence per share. All closing conditions, save for admission 
of the consideration shares, have now been met and the transaction will 
complete on admission. 
 
As a result of the above, the total number of shares to be issued in respect 
of consideration for the Agreement ("Consideration Shares") is as follows: 
 
_Consideration Shares_ 
 
  · US$2,000,000 of new ordinary shares at 7 pence per share (at an exchange 
  rate of 1.3386), being 21,344,262 new ordinary shares 
 
  · US$250,000 of new ordinary shares at 5.5 pence per share (at an exchange 
  rate of 1.3386), being 3,395,678 new ordinary shares 
 
_Convertible Loan Note_ 
 
  · US$400,000 convertible to new ordinary shares at 7 pence per share 
 
The issue of the 24,739,940 Consideration Shares represents 20.15 per cent. 
of the enlarged issued share capital of the Company. As a result of the 
issue of the Consideration Shares, Hessia Group Limited, the beneficial 
holder of these Consideration Shares, will hold 28,982,636 ordinary shares 
representing an interest of 23.61 per cent. of the enlarged issued share 
capital of the Company. 
 
*Issue of New Ordinary Shares, Admission to Trading and Total Voting Rights* 
Following satisfaction of all other conditions other than admission, 
application has been made for 24,739,940 new ordinary shares to be admitted 
to trading on AIM ("Admission"). It is expected that admission of the shares 
will become effective and dealings will commence at 8.00 a.m. on or around 
15 December 2020. 
 
Following Admission, the Company's enlarged issued share capital will 
comprise 122,769,073 ordinary shares of 1 pence each with voting rights in 
the Company. This figure may be used by shareholders in the Company as the 
denominator for the calculations by which they will determine if they are 
required to notify their interest in, or a change in the interest in, the 
share capital of the Company under the FCA's Disclosure and Transparency 
Rules. 
 
*Related Party Transaction* 
Osamede Okhomina, the CEO of the Company, was a non-executive director of 
EER (Colobus) Nigeria Limited until 14 May 2020. Accordingly, the amendment 
of the payment terms of the Agreement in respect of the proposed acquisition 
of the interest from EER constitutes a related party transaction pursuant to 
Rule 13 of the AIM Rules for Companies. Accordingly, with the exception of 
Osamede Okhomina, its directors consider, having consulted with the 
Company's nominated adviser, that the terms of the transaction are fair and 
reasonable insofar as the Company's shareholders are concerned. 
 
*Enquiries:* 
 
*ADM Energy plc*                        [phone] 
Osamede Okhomina, CEO 
www.admenergyplc.com 
 
*Cairn Financial Advisers LLP*          [phone] 
(Nominated Adviser) 
Jo Turner, James Caithie 
 
*Arden Partners plc*                    [phone] 
(Lead Broker) 
Paul Shackleton, Dan Gee-Summons 
 
*Hybridan LLP*                          [phone] 
(Joint Broker) 
Claire Louise Noyce 
 
*Oddo Seydler Bank AG*                  [phone] 
(Designated Sponsor) 
Michael B. Thiriot 
 
*Luther Pendragon*                      [phone] 
(Financial PR) 
Harry Chathli, Alexis Gore, Joe Quinlan 
 
*About ADM Energy PLC* 
 
ADM Energy PLC (AIM: ADME; BER and FSE: P4JC) is a natural resources 
investing company with an existing asset base in Nigeria. ADM Energy holds a 
9.2% profit interest in the Aje Field, part of OML 113, which covers an area 
of 835km² offshore Nigeria. Aje has multiple oil, gas, and gas condensate 
reservoirs in the Turonian, Cenomanian and Albian sandstones with five wells 
drilled to date. 
 
ADM Energy is seeking to build on its existing asset base in Nigeria and 
target other investment opportunities across the West African region in the 
oil and gas sector with attractive risk reward profiles such as proven 
nature of reserves, level of historic investment, established infrastructure 
and route to early cash flow. 
 
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Exchange. RNS is approved by the Financial Conduct Authority to act as a 
Primary Information Provider in the United Kingdom. Terms and conditions 
relating to the use and distribution of this information may apply. For 
further information, please contact [e-mail] or visit www.rns.com [1]. 
 
2020-12-10 Dissemination of a Corporate News, transmitted by DGAP - a 
service of EQS Group AG. 
The issuer is solely responsible for the content of this announcement. 
 
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December 10, 2020 06:10 ET (11:10 GMT)