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I wonder if "Trafigura" will be our funding source
Expect another board member to be announced,
"Under the terms of the relationship agreement, the Relevant Shareholders will have the right to nominate a director to be appointed to the Board of ADM from completion, subject to normal regulatory approval, and such right shall continue until such time as the Relevant Shareholders cease to hold 20% or more of the entire issued share capital of the Company. "
if they manage to get a placing away for that
$1m with a similar level of fees at a price level
of around 4.0p to the placees, that would be
a dilution of another 22 million shares or so.
[me, not convinced there will be sufficient appetite
at 4p, but let’s see, maybe someone will pay up?]
although a raise of that quantity would only
bring in enough to cover the $1m payment,
but with nothing included for those ongoing
‘admin’/ BoD costs, any new aje well costs etc.
(perhaps by announcing a ‘7p’ notional value for
the 22m shares EER are getting they are hoping
that might make placees think it’s worth paying up?)
ah, thanks dan, good point re additional shares likely being issued
in order to cover arrangement / admin / introduction/ commission
fees. sadly they don’t spell out such costs, but agree likely 10-15%.
slowlyslowly it doesn’t really matter to EER what notional price is
being assigned to the ADME shares they are being given as part of
the deal. —> basically they are giving up that percentage of aje, in
exchange for $1m cash, passing on debt of $1.5m “plus applicable
interest”, and receiving 2 million shares in ADME. —-> but the total
value of that deal to EER doesn’t change whether they assign a notional
value of 2p, 7p, 70p or 700p to those 2m ADME shares (as they are simply
worth whatever EER can sell ‘em for, subject to lock-in conditions etc.)
Mine was just a rough calculation but I assume there are the usual fees to be added, typically 10% extra is raised for fees but depending how raised it can be more or less
In regards to EER, they are in liquidation so not going to hold shares, if it is for 20m to 25m shares these will be sold pretty quick, it’s why my thoughts it’s a raise from current investors
? isn’t it more like 22,000,000 new shares,
if using circa 1.3 exchange rate $/£, at
7p per share to raise that $2,000,000?
also note, the potential extra debt being
taken on is $1.5m, “plus applicable interest.”
they’ve not spelt out the accrued amount.
[admenergyadmin, please feel free to clarify.]
dan, why do you think anyone is going to subscribe
for shares to raise that $1m at a premium? i can see
why adme would hope for that, but unless they come
with loads of sweetener warrants etc, why pay up?
Isn't it EER taking the 25m extra shares (I've not checked your calculation for the 25m, but assume it's correct). The RNS doesn't say that the 25% will be paid for by $3m in cash, $2m of which is to be raised by placing new shares. It says that the payment for the 25% will be $2m worth of shares (priced at 7p), and $1m in cash. So EER get shares in ADME in return for relinquishing 25% of their share of Aje, and are happy that they're getting a good deal if those shares are priced at 7p.
And as for the other 75%, does the RNS actually say that EER are selling the other 75%? If not, we may assume that they're reducing their share by 25%, and keeping the other 75%.
25m new shares approx
$1m cash on top of that
$1.5m potential extra debt on top of that
Potentially a world class asset but going to be a while until phase 2 and with the additional debt there won’t be any cash to ADME for a while
Interesting to see who is going to subscribe for shared at a premium, where the other $1m comes from
I wonder what the sale price of the other 75% goes for
Certainly an interesting development but not unexpected, it does highlight the mess that eer was in under OO though
aligned even
Smallerfry - i agree with your statement, but i think it is more about getting the project and partners aigned, it looks like the figure of £1.5million is going to be paid from future revenue.
No, it's different, although not entirely sure how. It's all smoke and mirrors, note that the $3m investment comes with a £1.5m liability to pay...…….
23 October 2019
ADM Energy holds a 5% equity investment in the Aje field in OML 113, which covers an area of 835 sq km offshore Nigeria. Aje has multiple oil, gas and gas condensate reservoirs in the Turonian, Cenomanian and Albian sandstones with five wells drilled to date. It currently has two producing wells, Aje-4 in the Cenomanian and Aje-5 in the Turonian.
Is equity investment the same as participating interest
Has OO got his figures wrong, I thought we already held 5% and were producing av280bopd, he says we had halve of that but with this purchase we will have the percentage and production we always had
One deal a month in 2020 will keep me happy . Lol
Oh wow
Good news all round.
Osa's quoted as saying ' first investment'
ADM to Acquire a Further Interest in OML 113 from EER
ADM Energy PLC (AIM:ADME), an oil and gas investing company quoted on AIM, is pleased to advise that it has entered into a sale and purchase agreement ("Agreement") with EER (Colobus) Nigeria Limited ("EER") to acquire, subject to satisfaction of certain conditions, a participating interest of 2.25% from EER in oil mining lease no. 113, which includes the Aje field ("Block"), in which it already has an interest of 2.7%. Consideration for the acquisition is $3,000,000, to be satisfied by the issue of $2,000,000 of new ordinary shares at 7 pence per share ("Consideration Shares") and $1,000,000 in cash at the time of completion.