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and thatâs the way that MXO, and now ADME, have always worked âŚthey
spin stuff about exciting projects, opportunities, and potential, but then
when those projects donât work out, they say as little as possible about
them but instead try to move the conversation onto another shiny, shiny
set of dangling keys, & hope pis will justforget all the previous failures.
theyâve been doing that for years. barracuda and the
marginal oil field bid are just the most recent examples.
Hi Peter
The NHNL PDF certainly states that it was down to lock of financial ability on ADME - a fact that could easily be attributed to DBI considering this was the primary source of funds for this project, if we lost the contract due to not been able to fulfil a contractual payment from a 3rd party (assume CALABAR CAPITAL), we should have really had something concrete that we didn't buy into KONH until that had been fulfilled so we couldn't end up in a position like this, or was it a fact that ADME had to buy KONH first, that then had to complete on the NHNL contract but then DBI never had the funds and our exclusivity agreement was there revoked?
There are lots of uncertain issues, why are ADME working with Emerald Energy on Barracuda - as far as i can see, they held the license but it was revoked in 2019 - but NHNL PDF states that the license is held with Emerald Energy and NHNL are the exclusive service provider for Barracuda, which cause more confusion as to do NHNL have any legal right to the contract if there agreement is with Emerald Energy who had the license revoked - Emerald Energy website looks like it hasn't been updated 2 years
So a real big question - who actually owns the license to Barracuda (officially as per any Nigerian Government documentation)
I haven't located anything that the license has been passed to any third party, or Emerald went to court and got it back
So many question, no answers, a lot of speculation, just move onto AJE - its prospects look very promising
interesting speculation, and itâs a pleasure to see two pis (dan & peter)
having civilised adult conversation about the possibilities without the
kind of name-calling, attacks, etc. that one sees so often on so many AIM
chat boards. on that basis alone, i do hope that they get lucky with ADME
price action. ⌠re peterâs para #4, i suspect ( - but have no way of finding
out for sure, of course - ) that one key bit that went wrong was about DBI.
i think ADME were hoping that DBI would come up with the funding
needed for NHNL to cooperate with KONH securing that commercial
interest, but then it turned out that DBI simply werenât able to pony
up with the required funds. that interpretation would be consistent
with a scenario where ADME failed dismally in their due diligence
about who DBI actually was, & what financial firepower it really had.
(? but did osa ever genuinely believe that DBI could fund ADMEâs
activities, or was that story only ever something cooked up to get
placings away? - rather suspect we will never get to know for sure.)
Dan,
This is just my speculation but I think that what must have happened is that:
1. KONH did have an arrangement with NHNL to buy a stake in them - this is effectively acknowledged in the letter that Tom Winnifrith published where NHNL were demanding a payment of $1.75 million from ADME for âproject fundingâ.
2. Based on the arrangement that Zenith Energy have subsequently announced whereby they are paying $20 million (presumably the entire cost of the well) for a 42% stake in NHNL then one would expect that the deal made between KONH and NHNL would be fairly similar â ie you get us $20 million funding to drill the well and we give you a large percentage of the company.
On this basis you would expect the $1.75 million to simply be the first instalment of at least 10 or 11 more. After all it is only 9 months since ADME first mentioned the deal and Zenith Energy announcing that they have an option deal. As far as I can tell, nothing has changed in this time period and so there is no reason that the price would change much either.
3. We know for a fact that KONH and ADME have not paid any money to NHNL partly because NHNLâs document has told us that, but mostly because ADME would have had to announce if they did pay anything â and they havenât had the money to anyway.
4. So in my opinion KONH had an option to buy a stake in NHNL but never cam up with the money and so never got their stake. I assume that they were hoping that ADME would be able to raise the money to fund the drill and then they would get their share out of this â but obviously it didnât work. So in essence ADME bought 51% of a company that was worth nothing.
5. The big question is how much ADME knew about this (ie how much due diligence they did). IMO, we are never going to know as, whatever the truth, they now have to say that they believed that KONH owned NHNL. This may make them look incompetent at their due diligence but it is better than the alternative which is that they are shown to have misled the market.
As I say, this is all just my own supposition and of course it is possible that NHNL are lying through their teeth and have a watertight agreement with KONH that they are trying to get out of. However, looking at the evidence that we have it front of us I find this unlikely. I think that ADME has 100% lost Barracuda but time will show if I am right.
I don't follow twitter so i never seen that but thats actually from their own account so thats hard for me to argue against
If that puts my theory in doubt, then i have no idea how ADME can have ownership cause we clearly don't have any legal ownership at todays date - so have we been duped, is it a mistake that purchase never concluded on NHNL (which is kind of the claim) but ADME / KONH / CALLABAR still ditd the purchase in the UK - but then on what basis would you do that if you didn't have legal claim to Barracuda - this is a long drawn out mess - for what was supposed to be the best deal in the world - what is really needed is a Q&A with OSA to clear at least the points he can without disclosing legal info that could be used against us
So much wring with Barracuda field and this whole contract
Dan,
You made a very convincing argument that the claim in the March 23rd RNS that the statement that: ââKONH holds, through its subsidiary Noble Hill - Network Limited ("NHNL"), a 70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141â was just a one-off mistake and it was corrected by omission in subsequent announcements.
However, I have just been looking at the companyâs Twitter and as recently as November 30th they confirmed this position by tweeting that:
â#ADME notes the recent announcement made by Zenith Energy Limited in respect of its option agreement for OML 141 risk service contract
$ADME confirms that there has been no subsequent change to KONH's position as majority shareholder in NHNLâ
https://twitter.com/ADMEPLC/status/1465604645733212160
It is clear that the company believe that their stake in KONH gives them control over NHNL yet at the same time NHNL have proved beyond doubt that KONH has no ownership of NHNL. It is looking to me more and more like ADME did not do proper DD and bought a stake in a company (KONH) that had no assetsâŚ
its my assumption as its the only was i can see how the deal worked
Calabar Capital took the Contract from a related party
ADME bought into it via the new SPV for cash and shares
assume all DD was done by ADME to confirm the contract was legit, legally binding and had no stupid conditions to it
but obviously, NHNL have some legal reason to say the contract was never executed, but that wouldn't technically stop the transaction between ADME / KONH / CC taking place
Dan, what evidence do you have that Calabar Capital had a contract for the RSA? Is this purely a supposition based on the fact that Calabar Capital ended up with all of the ADM shares or is there anything more concrete than that?
It sems unlikely to me that CC have any ownership of the RSA, not least because they were incorporated only a day before KONH on 18th Feb 2021 and whereas the nature of business of KONH is described as â09100 - Support activities for petroleum and natural gas extractionâ CC is described as â70229 - Management consultancy activities other than financial managementâ.
It looks to me as if CC was set up purely as an entity to take the money that was gained from selling 51% of KONH to AMD.
Whatever way you break it up, Calabar Capital does not hold any stake in NHNL any more than KONH does. But you are absolutely right, MADE need to clear up the absolute pigs ear that they have made of the entire ONL141 transaction. They only ever release any information when they are forced to and they increasingly come across like a collection of individuals who have a lot to hide.
Now NHNL have published papers showing that ADMEâs claim that KONH owns NHNL is nonsense (and has flat out said that it has no business dealings with KONH or ADME) then the onus is on ADME to explain why it believes that it still has any claim to the RSA of OML141.
my understanding , is the Calabar Capital had a contract for the RSA
Calabar Capital Directors do have a number of companies they are part of in this sector which could have had in interest in the project
I have stated that Calabar Capital were the ones who would of got our $250,000 cash and shares previously
This had Daniel Maling in charge at the time
I also said that if it is a con, it would likely be by them, but given the status, i believe maybe they are been conned further up the chain of the contract or that a possible scenario is that the contract was lost further up (and not disclosed to ADME until a further point in time in which the legal process started) again we should have been notified earlier
Only the first RNS stated that it was a subsidiary - never again , and the wording has also been amended to never include that definition - they should really clear up this exact transaction as it is not clear
The biggest issue is still the fact the ADME board have hid these facts from shareholders from a number of months
lets hope KONH shows their 70% ownership of NHNL this weekend, do they have a website?
How do you know KONH have no assets ?
Dan, the RNS did state that NHNL was a subsidiary and it has never been corrected.
Even if you look further down your post it says: âPost period, we acquired a controlling interest in a Risk Sharing Agreement (RSA) for the development of the large-scale Barracuda Field.â This absolutely backs up what they said before. The have a controlling interest in in the RSA because they control KONH who in turn control NHNL.
Except they donât because it was all untrueâŚ
Think about it for a moment. If what you are saying is correct then:
1) If KONH was only created as an SPV for the transaction then why did ADME pay $800,000 for shares in it?
2) If KONH was only created as an SPV for the transaction then we know that the maximum amount of money that could ever have been paid to NHNL is $250,000 as the other $550,000 was issued in shares to Calabar Capital Limited. I would also be very surprised if the $250k didnât also end up in the same place but supposing it hasnât then the $250k could have gone to NHNL. However, what would this buy them? Absolutely nothing.
We know that NHNL were demanding a payment of $1.75million from KONH in July 2021. We also know that they have asked for a $20 million payment for a 42% stake in the company from Zenith. Even if the $250k was paid to NHNL (and I am 99.9% certain it wasnât) then it would not have bought them anything.
So now, by your own rationale, we have a company that when it set up âcould therefore have owned nothingâ and was then provided with nothing to close the deal. It still doesnât work.
So whatever way you break this up then KONH and ADM have not acquired anything. Either KONH were meant to own NHNL and they didnât or they were meant to buy it and they didnât.
Whatever way it ends up AMD own nothing because KONH have paid for nothing. They have simple received some money from ADME and moves this into a completely different corporate entityâŚ
K.O.N.H were only created to form part of this transaction as a vehicle nad could therefore owned nothing
The March RNS did state that but it has been changed in future
28th april
¡ ADM acquires a 51% interest in K.O.N.H. UK Limited ("KONH") (the "Investment"), which holds a 70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141
The Company has also agreed an investment in the development of the Barracuda Field, an existing discovery and near-term production asset in OML 141, which covers 1,295 km2 in the swamp/shallow waters of the Niger Delta. Four existing wells have been drilled to date and a fifth is intended to be drilled in Q4 2021.
Post period, we acquired a controlling interest in a Risk Sharing Agreement (RSA) for the development of the large-scale Barracuda Field. Located in OML 141, the Barracuda Field is an existing discovery and near-term production asset, which covers 103 km2 in the swamp/shallow waters of the Niger Delta.
All further correspondence has always said that there is no ownership from what i can see
The ADM Energy website also doesn't claim any ownership
On 31.08.2021, I posted here that a company named Karra Oil Noble Hill Ltd [co no 015555V] had been incorporated on 11.12.2017 in the Isle of Man jurisdiction, where it was listed as 'Struck Off' and dissolved on 03.08.2021. I also added details of K.O.N.H. (UK) Ltd [co no 13213236] registered at Companies House UK to emphasise that two companies shared the initials KONH, with the obvious implication that this might not be a coincidence. I also disclosed that I was not a shareholder in ADME so had no incentive to enlarge on the suspicions this raised.
Since no one else appears to have followed this line of enquiry the following information may assist in prompting investigation by anyone who wishes to follow this further.
Regarding Karra Oil Noble Hill Ltd. Ask yourself why in Dec 2017 a private company with the name âNoble Hillâ was incorporated in the Isle of Man jurisdiction [a tax haven noted for corporate secrecy] and the name âKarraâ was added as a prefix. The 13 filings during its 3 plus years of existence reveal 'intended and actual resignation of Registered Agent', 'intended and actual Striking Off', 'Suspension' and little else.
Possible clue: Mr Perayya Sastry Karra was appointed as a director of K.O.N.H (UK) Ltd on April 13, 2021 the same day that ADM Energy was filed at Companies House as a âRelevant Legal Entityâ with âSignificant Controlâ of K.O.N.H. (UK) Ltd; . That is the day that ADME acquired 51% of K.O.N.H. (UK) Ltd presumably in the belief it was thereby acquiring as stated in its RNS of 23.03.2021,âa 70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML-141.â
This is only the beginning of a trail which winds through a complex web of individual and company interests which I do not intend to enlarge on further. In providing this information I also emphasise that I do not intentionally impugn the integrity of any entity named, either directly or by inference.
AGEOS.
Dan it is true that ADM never bought a direct interest in NHNL but they did buy 51% of KONH and then described in their March 23rd RNS that: ââKONH holds, through its subsidiary Noble Hill - Network Limited ("NHNL"), a 70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141â
Given that the definition of the word "subsidiary" in business is "a corporation or company owned by another corporation that controls at least a majority of the shares. " then by acquiring 51% of KONH (and amusingly making it a subsidiary itself) ADME were purchasing the majority of NHNL, just in an indirect manner.
So this is the issue. In announcing that NNHL was a subsidiary of KONH they used a word with a very specific meaning and NHNL have just provided the documentation to show that the statement was not true.
I cannot understand how anybody can see this any differently. It is the crux of the whole matter and will be very easy to prove if any money changed hands or not. However, it is already clear that KONH and ADM did not pay NHNL any cash as neither of them had any and no payment was ever announced.
The whole thing stinks.
It still comes to the fact that ADME bought into an Indirect Interest
remember that means we don't hold any actual ownership - this was clarified on 8th June by ADME
The investment in the Field was made by way of an acquisition of a 51 per cent. interest in K.O.N.H. UK Limited ("KONH"), which holds a 70 per cent. interest in a Risk Sharing Agreement ("RSA"). In the announcement, the Company advised that the RSA grants investors in the RSA an option to acquire a participating interest in the OML 141 licence, however, there are no option rights attached to the RSA and, accordingly, to the benefit of ADM.
We have never been purchasing any part of NHNL, just a contract -
This looks like more battle lines been drawn
Adm lawyers are satisfied with the merits of the deal so they have done their due diligence. This is a case for a judge to sort out not AIM regulators.
Spot-on Peterashbeck. The only two scenarios as I see it, and likely the former as you pointed out. But also as you say...failing to do DD is bad enough...then withholding that information only compounds the failure....
Well this fits into the concerns that I had about the claim in ADMEâs claim in their March 23rd RNS that ââKONH holds, through its subsidiary Noble Hill - Network Limited ("NHNL"), a 70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141â
As I have mentioned on numerous occasions, the old NHNL website always claimed that they were a 100% Nigerian owned company. In addition to this, Nigerian law would not have allowed NHNL to be majority owned by a non-Nigerian company so this inconsistency was always a huge red-flag that something was not quite correct with this whole deal.
NHNL have now gone public with the fact that they never sold any of their shares to KONH and have published the confirmation from the company secretary that there are only two shareholders in NHNL and that neither of them are KONH. This confirmation leaves ADME in a very awkward situation as it basically appears that they spent $250,000 in cash and $550,000 in shares to acquire 51% of a company that was completely valueless. This can only have happened for one of two reasons:
1) They were duped by KONH when they invested in the company and genuinely believed that KONH did own NHNL. But this begs the question of can they not have done proper due diligence when they were handing over that kind of money? Though, as tresha99 has pointed out the BoD do seem to have form for a history of poor DD.
2) That ADME acquired 51% of KONH knowing that they did not own NHNL and were therefore party to defrauding shareholders.
I find it almost impossible to believe that number 2 can be true. Awful and incompetent as our BoD can be they are not out-and-out criminals. But in the case that option 1 is true then they have handed $800,000 to a company that was completely valueless. You couldnât make it up â it is like they got an email from a Nigerian âPrinceâ in a 419 scam and fell for it. Surely they must have asked to see copies of contracts etc.
However, regardless of the fact that ADME may have been duped by KONH back in March they have (according to the NHNL website) known that KONH had no ownership of NHNL and yet they have continued to hide this from shareholders. They have not mentioned it in the annual report and they did not mention it when they were raising money. In fact, it seems that any information literally has to be forced out of the company by AIM regulation.
Well the writing is on the wall now. If everything that has been said on the NHNL website is true then the company must surely be heading for suspension.
stunning that this share is not suspended.
the potential for a false market here is huge
while this entire mess remains unresolved.
Well this is a turn-up! I can't imagine the ADM Board outright claiming ownership without having been duped in some way....I'm much more inclined to believe they failed in basic DD as they have previous in that respect....
The following statement relating to Nigeria OML-141 NW was added to the NHNL website yesterday, 02.12.2021.
Noble Hill-Network Ltd
Further information on disclaimer 02.12.2021
On 23 November 2021, Noble Hill-Network Ltd (NHNL) through their outside Legal Council notified the AIM Regulatory Authorities that the NHNL Board of Directors on 5 August 2021 unanimously REJECTED the PROPOSED transaction with K.O.N.H. (UK) for a participation interest in NW OML 141 RSC through the purchase of NHNL Shares. NHNL notified the AIM Regulators and sent a copy of the 17 August and 27 August Cease and Desist Orders demanding that they stop all statements and Claims of Ownership of NHNL and thereby any interest in the NW OML 141 RSC which is held solely by NHNL.
On 29 November 2021 in ADME RSN 90471, it states that K.O.N.H. (UK) âhas a 70% controlling interest in a risk sharing agreement in the Barracuda field in OML 141â. Noble Hill Network Ltd (NHNL) through their outside Legal Council notified the AIM Regulatory Authorities on 1 December 2021 that the ADME statement was false and NHNL supplied documentation from the independent Company Secretary stipulating the actual Share Ownership of NHNL as Registered with the Nigerian Corporate Affairs Commission and as documented by Share Certificates and recorded by the Company Secretary. This documentation confirmed that NHNL is owned SOLELY by two Nigerian Owned Companies and K.O.N.H. (UK) has NO Shareholding and/or ownership in NHNL.
The continuation of this notice, with supporting documentation can be examined on the NHNL website at www.noblehillnetwork.com
This simply confirms much of what I have posted both here and on the ZEN share-chat board during the past two months and should convince the 'ADME eternal optimists' that Barracuda 'ownership' was and remains a delusion. Your BOD have some questions to answer.
AGEOS.