Adm Energy Regulatory News (ADME)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

23 March 2021

ADM Energy PLC

("ADM" or the "Company")

Investment in Development of Barracuda Oil Field, Nigeria and Fundraise

Further to the announcement on 18 February 2021, ADM Energy PLC (AIM: ADME; BER and FSE: P4JC), a natural resources investing company, is pleased to announce that it has conditionally agreed to invest in the development of the Barracuda oil field (the "Field") in OML 141, an existing discovery and near-term production asset in swamp/shallow waters offshore Nigeria. The investment will be made by way of an acquisition of a 51% interest in K.O.N.H. UK Limited ("KONH") (the "Investment"), which holds an indirect interest in a Risk Sharing Agreement ("RSA") for the Field.

Consideration for the Investment may total up to US$1.3m, of which US$0.25m is to be settled in cash on completion and the balance is to be settled in equity, at the higher of 7p and the then prevailing share price, on completion and on satisfaction of certain project milestones.

The Company intends to raise approximately US$0.5m in cash by way of a subscription, for new ordinary shares to, inter alia, provide funding for the Investment (the "Fundraise"). The subscription will be effected by way of an accelerated bookbuild (the "Bookbuild"), at a price of 4.25 pence per new ordinary share (the "Subscription Price").

As part of the Fundraise, the Company intends to enter into subscription agreements with investors and certain of its directors and PDMRs pursuant to which they will subscribe for new ordinary shares (the "Subscription Shares") at the Subscription Price (the "Subscription"). The Fundraise is conditional on admission of the new ordinary shares pursuant to the Fundraise to trading on AIM.

The Bookbuild will open with immediate effect following release of this announcement. A further announcement confirming the closing of the Bookbuild and the number of new ordinary shares to be issued pursuant to the Fundraising is expected to be made in due course.

Investment Highlights

· ADM will acquire a 51% interest in KONH following the completion of the Investment, expected in Q2 2021

· KONH 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 141

· The RSA represents a type of service contract commonly used in the Nigerian oil and gas industry by which NHNL will be compensated in cash out of profits (calculated based on agreed-upon measures and outcomes) generated from development of the Field

· ADM will provide technical and financial support to the investors in NHNL (the "RSA Consortium") in return for favourable accelerated economics:

o The RSA Consortium intends to provide or procure funding for all upcoming capital expenditure ("Capex") subject to the joint operators' approval to develop the Field, in return for 235% of approved Capex to be recovered plus a 15% Net Profit Interest ("NPI") from the field

o Post return of invested capital to the RSA Consortium, the RSA Consortium remains entitled to the NPI throughout the life of the Field

o The RSA also grants the RSA Consortium an option to acquire a participating interest in the OML 141 Licence

· New work programme to be produced by the RSA Consortium and joint operators

· As part of the existing agreed scope of work, the RSA Consortium has undertaken to commission a CPR. The new CPR report is expected to be completed within the next few months. NHNL has advised the Company that a previous CPR prepared by Ryder Scott (2016) has indicated P50 resources of 1.3 billion barrels of oil in place from two sand reservoir intervals (subject to the production of a new CPR)

· These reservoirs are similar to the high-quality reservoir in the Nembe Creek field which is located near the Barracuda field and has estimates of over 1 billion barrels of oil in place

· The Barracuda field has four existing wells drilled and it is intended that a fifth well will be drilled in Q4 2021 - the intention is that ADM's financing partner Dubai Bridge Investments LLC ("DBI") may fund certain development costs of the Investment (terms and conditions are still to be finalised)

· ADM's internal estimate suggests that first oil of 4,000 barrels of oil per day ("bopd") may be possible in H2 2021 - ADM will test this estimate as part of its technical appraisal work which it intends to conduct in due course

· ADM considers that there may be an opportunity to further increase Field productivity from further drilling. Following the receipt of the CPR and further technical appraisal work, it may be possible to:

o Increase production to ca.23,000 bopd by drilling six wells by 2026

o Develop a 12km pipeline to Brass Export Terminal, reducing operating expenditure ("Opex") to US$12/bbl (from US$20/bbl)

· The completion of the CPR alongside further technical appraisal work will assist ADM to appraise whether the Company may, in future, wish to seek an equity participation in the Field

Investment Consideration

· Consideration for the Investment may total up to US$1.3m payable in cash and equity, of which up to US$0.4m is contingent on demonstrating commercial flow rates from the first new well, and payable as follows:

o US$0.25m in cash at completion

o In three share instalments, distributable as follows:

§ US$0.55m in ordinary shares of ADM issued at the higher of 7p and the then prevailing share price at completion

§ US$0.1m in ordinary shares of ADM issued at the higher of 7p and the five-day average of the then prevailing share price upon signing of drilling contract for the Barracuda-5 well

§ US$0.4m in ordinary shares of ADM issued at the higher of 7p and the five-day average of the then prevailing share price on completion of a successful flow test in respect of the Barracuda-5 well

Osamede Okhomina, CEO of ADM Energy plc, said: "This is a compelling investment opportunity that provides ADM with the potential to access near-term production upside at minimal risk. The Barracuda Field in OML 141 fits our strategy to target near-term production assets in proven oil and gas jurisdictions and will establish ADM Energy as a multi-asset player in Nigeria. We will bring technical and financial support to the consortium to develop the asset and take it into production in the second half of this year. We have structured the deal to receive an accelerated cash entitlement once the field is in production, with the intention that the cost of the first well will be supported by our financing partner, Dubai Bridge Investments."

HE Zubair Al Zubair, Chairman of Dubai Bridge Investments, said: "We partnered with ADM at the end of last year because their strategy aligned with our own of seeking out investment opportunities in the energy sector in Africa. The Barracuda Field, an attractive near-term production asset with significant potential upside, is the type of excellent opportunity we envisioned when we first decided to collaborate with ADM. Our planned financial backing combined with ADM's extensive contacts and breadth of experience of the region and the oil and gas industry forms a formidable partnership and we look forward to building a long-term relationship."

Background on Barracuda Field

The Barracuda field sits in OML 141, an oil mining licence area covering 1,295 km2 in the swamp/shallow waters of the Niger Delta in Nigeria. Four existing wells drilled in 1967 (three wells by Tenneco) and 2007 (one well by CNOOC) penetrated oil-bearing high-quality C3 and D-1B sands typical of the stacked delta top and prodelta reservoirs in faulted listric settings common in this area. The plan is for a fifth well to be drilled (Barracuda-5) in order to carry out a flow test in Q4 2021 which, if successful, will be brought onstream. Subject to the assessment of pre-drilling studies, and agreement from ADM and DBI, it is the intention for the fifth well to be funded through a loan from existing funding partner DBI. Based on existing Barracuda data and field analogues, ADM estimates that it may be possible, which will be subject to production of the new CPR, to recover up to 73 million barrels from the D-1B reservoir alone with several other potential reservoir leads to be further appraised after initial production. In addition, ADM considers that there is a potential opportunity to further increase field productivity through the drilling of five additional wells over the coming years. Any development of the field will be subject to the receipt of the CPR, further and ongoing technical appraisal work, and funding.

Additional Information on the Fundraising and Bookbuild

The final number of new Ordinary Shares to be issued pursuant to the Fundraising (the "Fundraising Shares") will be determined following the close of the Bookbuild. The Fundraising Shares, when issued, will be fully paid and will rank pari passu in all respects with the existing ordinary shares.

Details of the result of the Fundraise will be announced as soon as practicable after the close of the Bookbuild. The Company will not issue more Fundraising Shares than it has the required authorities to issue, and accordingly there will be no shareholder circular or General Meeting required. Further updates will be provided as and when appropriate.

Enquiries:

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.

Forward-Looking Statements

Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Company's current expectations, estimates, and projections about its industry; its beliefs; and assumptions. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the Company's control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The Company cautions shareholders and prospective shareholder holders not to place undue reliance on these forward-looking statements, which reflect the view of the Company only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Company will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances, or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.