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.

30 June 2021

ADM Energy PLC 

("ADM", the "Company" or the "Group") 

Trading Update, Annual Report and Accounts

ADM Energy PLC (AIM: ADME; BER and FSE: P4JC), a natural resources investing company, provides the following update on trading and in relation to the publication of its Annual Report and Accounts for the year to 31 December 2020.

Annual report and accounts

Due to the current COVID-19 situation, the Company will be unable to post its annual audited accounts to shareholders for the year to 31 December 2020 by the 30 June 2021 deadline pursuant to AIM Rule 19. Further to the guidance provided in "Inside AIM" on 27 January 2021, the Company has requested an extension of its reporting deadline, which has been granted, by up to three months such that it may publish its annual report for the year to 31 December 2020 by 30 September 2021. The Company expects to publish its annual report ahead of this date.

Trading update

The Company is today providing shareholders with an unaudited update on trading of the Group for the year ended 31 December 2020, details of which are set out as follows.

Investment Highlights

● Increased revenue interest in Aje Field asset from 5% to 9.2% by acquiring 25% of the interest, rights, and obligations held by EER

o Total gross production volume decreased to 698,649 (2019: 890,203 bbls) barrels of oil in 2020 with 36,295* net to ADM (2019: 44,405 net to ADM), reflecting a decision from the JV Partners to carry out a more thorough and extended period of maintenance on the FPSO while oil prices were depressed

o 14th lifting in October 2020 totalled 557,091 barrels (ADM net share of 33,056 barrels)

o Post period, 15th lifting in April 2021 for a total of 225,000 barrels, equating to an increased net share to ADM of 27,675 barrels post completion of the EER transaction

o Partners reduced operating costs at project level by 37.5% on average, reducing breakeven cost of production to US$28 per barrel

● In January 2021, extended MOU with Trafigura Pte Ltd ("Trafigura") - intention to create a strategic alliance for investment opportunities, with Trafigura providing conditional financing of up to US$120m

● In April 2021, acquired a controlling interest in a Risk Sharing Agreement ("RSA") for the development of the large-scale Barracuda Field. The overall consideration for the investment may total up to US$1.3m payable in cash and equity

● Strengthened the team with the following appointments:

o Lionel Therond, CFA, as CFO; and two Oil and Gas veterans, Darrell McKenna and Dr Satinder Purewal, as advisory members to the technical team

* Includes increase in revenue interest from 5% to 9.2% after 9 December 2020

Financial Summary

● Unaudited Revenue was £0.8m (2019: £2.5m), reflecting a reduction in production volumes, fewer Liftings in the period due to COVID-19 and ADM's decision to not participate in the 13th Lifting due to low oil prices at that time

● Raised additional equity of £0.5m and debt of £0.4m in two fundraisings in 2020

● Post period, raised £1,220,000 in an equity fundraising in March 2021

● In May 2021, completed the sale of 188,778 shares in Superdielectrics Ltd for a total consideration of £849,501, a profit of £656,003.55 on ADM's original investment

● Extended the terms of £200,000 Loan Facility signed in August 2020

Aje Field

ADM consolidated its interest in OML 113 during the year and nearly doubled its net revenue, reserves and production share in the asset. The Group increased its revenue interest from 5% to 9.2% by acquiring 25% of the interest, rights, and obligations held by EER (Colobos) Nigeria Limited ("EER"). This has increased ADM's share of net 2P reserves from 8.9 MMboe to 16.4 MMboe with net daily reserves, based on production at the time of the deal, rising from 148 bopd to approximately 273 bopd.

Oil Production:

* Includes increase in revenue interest from 5% to 9.2% after 9 December 2020

Due to the prevailing low oil price at the time, ADM elected to not participate in the 13th lifting in March 2020. The Company participated in the 14th lifting in October 2020, which totalled 557,091 barrels with a net share of 33,056 barrels to ADM. Post period, the 15th lifting was completed in April 2021 for a total of 225,000 barrels, equating to an increased net share to ADM of 27,675 barrels post completion of the EER transaction. The lower production volumes were due to a decision from the JV Partners to carry out a more thorough and extended period of maintenance on the FPSO while oil prices were depressed.

The partners successfully reduced operating costs at project level by 37.5% on average. As a result, the breakeven cost of production was reduced to US$28 per barrel, comfortably below the prevailing crude oil price. This ensured that Aje remained profitable at a project level, even despite lower production volumes and crude oil prices.

Barracuda Field

Post period, ADM acquired a controlling interest in a RSA for the development of the large-scale Barracuda Field. ADM will provide technical and financial support to the RSA Consortium in return for favourable accelerated economics and a 15% Net Profit Interest in the field. The Company's internal estimate suggests that first oil of 4,000 bopd could be achieved in H2 2021 by drilling an appraisal well (Barracuda-5). Xodus Group Ltd has been commissioned to produce an updated Competent Person's Report ("CPR"). Subject to the outcome of the CPR and successful results from the appraisal well, ADM believes it may be possible to increase production at the Barracuda Field to approximately 23,000 bopd through drilling six wells by 2026.

Osamede Okhomina, CEO of ADM Energy, stated: "2020 has posed unprecedented challenges due to COVID-19. We are pleased that our operations continued in a safe and effective manner, while the board managed to position the business for growth. We have completed two significant deals that form an excellent foundation for ADM's future development. We almost doubled our interest in the Aje Field, enabling ADM to benefit from any future scale up in production, and we acquired an indirect interest in a near-production asset with favourable accelerated economics in the Barracuda Field.

"ADM strengthened its technical and management teams to help progress our existing assets and assess new opportunities, with the appointments of highly experienced oil and gas specialists and bringing in Lionel as CFO. In addition, the Company has extended its agreement with Trafigura, which, for the right project, can provide ADM with access to capital and, post period, we recently raised capital which allows us to progress the Barracuda opportunity and provide working capital for the Company. This progress puts us in a stronger position to focus our efforts on bringing on new production at Aje and Barracuda, while continuing to assess opportunities to secure other value-accretive, high-quality assets at depressed valuations with considerable upside for our shareholders."

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 oil producing 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.

The Company also holds an investment in the development of the Barracuda Field, an existing discovery and near-term production asset in the NW part of OML 141, which covers 103 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.

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.