Adm Energy Regulatory News (ADME)

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.

14 May 2020

ADM Energy PLC 

("ADM" or the "Company") 

Update on acquisition of further interest in OML 113

Payment of USD$250,000 acquisition deposit agreed

ADM Energy PLC (AIM: ADME), an oil and gas investing company quoted on AIM, is pleased to announce it has reached agreement with EER (Colobus) Nigeria Limited ("EER") for the immediate payment, in cash and shares, of the USD$250,000 deposit due as part of the sale and purchase agreement to acquire a further interest of 2.25% in oil mining lease no. 113 ("OML 113") from EER ("the Agreement") announced on 24 February 2020.

KEY POINTS:

· Payment of USD$250,000 deposit in cash and shares as part of the sale and purchase agreement

· ADM is in the process of applying for the consent of the Nigerian Minister of Petroleum Resources for the transfer of the interest from EER to ADM, which takes the Company closer to completing the Agreement

· Subject to completion of the Agreement ("Completion"), ADM's participating interest in OML 113 will increase to 4.9% with corresponding revenue and cost bearing interests increasing to 9.2% and 12.3% respectively

· Recently strengthened balance sheet and cash position following Loan Facilities Agreement, Directors' Subscriptions and Debt Conversion, as reported on 27 April 2020

· Operations at OML 113 remain largely uninterrupted, with production levels remaining stable

Osamede Okhomina, CEO of ADM, said: "Keeping to our stated plan, we have completed the second stage of this agreement with EER, taking us another step closer to concluding the transaction and increasing our position in OML 113, which is a high-quality asset.

"Despite the wider, global macroeconomic issues, we believe the longer-term outlook remains very positive within our market. We are focused on continuing to execute our strategy and are well placed to do so having recently strengthened our financial position."

Payment Terms

The deposit will be satisfied with an immediate payment of USD$125,000 in cash with the remaining USD$125,000 to be satisfied with the issue of 4,242,696 new ordinary shares of 1 pence each at 2.4 pence per share ("Deposit Shares") at an exchange rate of approximately USD$1.23:£1. ADM will shortly commence its application for the consent of the Nigerian Minister of Petroleum Resources for the transfer of the interest from EER to ADM, a condition of Completion. The deposit is refundable and, in the event of the termination of the Agreement, the cash component of the deposit will be refunded and the Deposit shares will be acquired at nominal value or returned to the Company for no consideration.

Background to the Agreement

As announced on 24 February 2020, ADM entered into an agreement with EER to acquire, subject to satisfaction of certain conditions, a participating interest of 2.25% from EER in oil mining lease OML 113, which includes the Aje field ("Block"). As part of the total consideration of USD$3,000,000 for the acquisition, to be paid at Completion in share capital and cash, ADM was required to pay a refundable deposit of USD$250,000 within 90 days of signing the Agreement. As announced on 27 April 2020, ADM agreed with EER an extension of a further 60 days to make the deposit payment, which it is now setting.

Since 2016, ADM has held a participating interest in the OML 113 of 2.7% with corresponding revenue interest and cost bearing interest of 5.0% and 6.7% respectively. Subject to Completion, ADM will acquire 25% of the interests, rights and obligations held by EER in the Block such that, on Completion, ADM's participating interest will increase to 4.9% with corresponding revenue and cost bearing interests increasing to 9.2% and 12.3% respectively.

Related Party Transaction

Osamede Okhomina, the CEO of the Company, is a non-executive director of EER. As a result, the amendment to the Agreement constitutes a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. With the exception of Osamede Okhomina, the directors of the Company 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.

Admission to AIM and Total Voting Rights

Application has been made for the Deposit Shares, which total 4,242,696, to be admitted to trading on AIM. It is expected that Admission of the Shares will become effective and that dealings will commence at 8.00 a.m. on or around 19 May 2020.

Following Admission of the shares, the Company's enlarged issued share capital will comprise 74,325,239 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.

Enquiries:

About ADM Energy PLC

ADM Energy (AIM:ADME) is a natural resources investment company with an existing asset base in Nigeria. ADM Energy holds a 5% profit interest in the Aje Field, part of OML 113, which covers an area of 858km²offshore Nigeria, and in February 2020 entered into an agreement with EER (Colobos) Nigeria Limited to acquire a further 4.2% profit interest. 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, route to early cash flow and exploration upside.