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Disseminated via PRN on 29 April 2026
29 April 2026
ADM Energy PLC
("ADM" or the "Company")
Formation of Joint Venture and Investment
Joint Venture Agreement to Acquire Oil and Gas Assets
ADM Energy PLC (AIM: ADME; BER and FSE: P4JC), a natural resource investing company, announces the formation of, and an investment in, Vega Upstream JV, LLC (“Vega Upstream JV”), a joint venture company formed by Covenant Oil Group Corp. (“COG”) and the Company, primarily to identify and coordinate investment opportunities in US onshore oil and gas assets.
Vega Upstream JV has identified a portfolio of operated and non-operated producing natural gas, natural gas liquids (“NGL”) and oil wells in Oklahoma, USA, together with a fee-generating natural gas gathering system and its associated surface land and equipment ( “Midcon Assets”). Subsequently, Vega Upstream JV has executed a Stock and Membership Interest Purchase Agreement (“Purchase Agreement”) with the owner of a private U.S. company (the “Target”) to acquire all of the issued and outstanding share capital of the Target and all of the issued membership interests in its subsidiaries, and the Midcon Assets, for a base purchase price of c. US$14.9 million (the “Purchase Price”). On 28 April 2026, Vega Upstream JV paid a deposit of US$500,000 (the “Deposit”) to execute the Purchase Agreement. The Deposit will be applied to the Purchase Price at closing of the transaction, anticipated on or before 31 May 2026, with an effective date of 1 February 2026 (the “Midcon Acquisition”).
The Midcon Acquisition and associated due diligence and transaction expenses are expected to be financed via an institutional credit facility of approximately US$14.0 million (the “Debt Financing”) and an equity contribution to Vega Upstream JV of US$1.0 million (inclusive of the Deposit) of which approximately US$100,000 will be invested by ADM. These funding sources are expected to satisfy the Purchase Price together with associated transaction costs and any additional customary closing adjustments. Further announcements related to Debt Financing will be made in due course.
Vega Upstream JV has further issued to Electric Guitar PLC, a public limited company incorporated in England and Wales, quoted on the AIM Market of the London Stock Exchange (“ELEG”), an option to acquire an interest of 50% in certain of the Midcon Assets (the “ELEG Option”). The ELEG Option terminates on 31 July 2026.
Closing of the Midcon Acquisition by Vega Upstream JV is not contingent on the ELEG Option.
Highlights
Regarding the Midcon Acquisition, Executive Director, Randall J. Connally, stated:
“We believe the Midcon Acquisition will be transformative for the Company, with anticipated cash receipts resulting from the transaction potentially reaching c. US$850,000 over the next twelve months and additional upside and news flow resulting from interests being acquired in three drilled, but uncompleted wells, a large inventory of behind pipe opportunities to be exploited.
“In addition, the potential upside via the provision of services to Vega Upstream JV by Eco Oil, associated with the operation of the Midcon Assets, additional fees and benefit should ELEG exercise its option to participate; and upside that may be realised from either, or a combination, of drilling and farm-out of some of the 58 drilling locations included as part of the Midcon Asset portfolio.”
The Midcon Assets
The Midcon Assets comprise:
Working interest of an average of 49.4% in 28 operated natural gas, NGL and oil wells located in Custer County, Oklahoma, together with a defined portfolio of 58 horizontal drilling locations, of which approximately 72.0% are attributable to the operated assets. Comprising recent net production of c. 3.2 mmcfe/d (533 BOE/d) and approximately 58% of revenue from crude oil and liquids.
Working and/or overriding royalty interest of an average of 3.9% in approximately 250 non-operated natural gas, NGL and oil wells located across multiple counties in Oklahoma.
A natural gas gathering system transporting c. 4.4 mmcf/d of natural gas produced by the Midcon Assets and eight other area producers to the sales point covering approximately four-square miles. A toll of $0.74 per Mcf together with approximately 160 acres of associated surface land supporting current and future operations.
Third-party Report
Vega Upstream JV has commissioned a third-party reserve report by Haas & Cobb Petroleum Consultants with respect to the Midcon Assets. The report is anticipated to be released in advance of the closing date of the Midcon Acquisition and further announcements will be made in due course. The Company will have access to, but did not commission this report.
Deposit Funding Agreement
ADM Energy USA, Inc. (“ADM USA”) and Covenant Oil Group Corp. entered into a deposit funding agreement dated 28 April 2026 (the “Deposit Funding Agreement”), pursuant to which COG has funded the full US$500,000 Deposit. Under the terms of the Deposit Funding Agreement, ADM USA has agreed to make its required capital contribution of US$100,000 to Vega Upstream JV on or before closing of the Midcon Acquisition as contemplated in the Purchase Agreement.
Investment and Participation of the Company in Vega Upstream JV
As a result of the group’s participation of approximately US$100,000 as a capital contribution to Vega Upstream JV, its interest in Vega Upstream JV will comprise:
| Capital | Asset | Membership | Voting | |
| Member | Contribution | Interest | Interest | Interest |
| ADM | US$100,000 | 10.0% | 50.0% | 50.0% |
| Covenant Oil Group Corp. | US$900,000 | 90.0% | 50.0% | 50.0% |
| Total | US$1,000,000 | 100.0% | 100.0% | 100.0% |
The asset interest reflects the interest of each party in the underlying Midcon Assets. The membership and voting interest reflect the interest of each party in the economics and governance of Vega Upstream JV. ADM and COG will each appoint two members to a four-member Board of Directors of Vega Upstream JV of which each will appoint a Co-President. The Co-Presidents will jointly act on behalf of Vega Upstream JV which will act as operator of the Midcon Assets for regulatory purposes in the State of Oklahoma.
Vega Upstream JV will earn income as operator of the Operated Upstream Assets and the Midstream System (the “COPAS Fees”). The COPAS Fees averaged approximately US$55,000 per month and commodity marketing fees averaged US$6,800 per month in 2025 for a total of circa US$61,800 per month in 2025 (unaudited, as reported by the Target). Any profit or loss resulting from Vega Upstream JV acting as operator, after payment of operating and administrative costs, including fees due pursuant to the ASA, will be split according to the membership interest of each party in Vega Upstream JV.
ADM and COG have further agreed that the Company (or an affiliate) will provide administrative services to Vega Upstream JV through an Administrative Services Agreement (the “ASA”) and be compensated for any such services provided at a 20.0% premium to the actual cost incurred associated with the provision of services pursuant to the ASA.
In addition to the asset interest and fees to be earned pursuant to the ASA and equity interest in Vega Upstream JV, ADM will earn a US$300,000 fee to be paid out as a preference payment of US$10,000 per month for 30 months following closing of the Midcon Acquisition by Vega Upstream JV for its services in identifying, performing due diligence, negotiating and securing debt financing for the Midcon Acquisition (“Acquisition Fee”).
At the sole discretion of the Company, ADM has the right to increase its economic interest in Vega Upstream JV to 35% by making an additional capital contribution proportionate to the increase in interest. The additional capital contribution is to be funded on or before closing of the Midcon Acquisition.
Potential Revenue Upside to Eco Oil Disposal, LLC
Eco Oil Disposal, LLC (“Eco Oil”) (a 60.0% owned subsidiary of the Company) may provide, at market prices, certain services to Vega Upstream JV in operation of the Midcon Assets. The directors of the Company believe that the services that Eco Oil may provide (including trucking, dirt work and other general oilfield services) could generate up to US$90,000 per month in revenue based on the director’s analysis of actual operating costs (to 100% of the operated properties) incurred by the operator of the Midcon Assets for the year ended 31 December 2025.
Summary of Budgeted Revenue Impact to the Company
Based on current operating performance of the Midcon Assets and the potential revenue streams identified above, ADM’s 10.0% asset interest in the Midcon Assets (1) may generate positive monthly gross cashflow over the next twelve months (based on prevailing commodity prices (2) ) as follows:
| As Structured | w/ ADM Option Exercise | |||
| Source of Cashflow: | Interest | Cashflow | Interest | Cashflow |
| Midcon Assets | 10% | $26,400 | 35% | $65,300 |
| Vega Upstream JV (3) | 50% | $36,000 | 50% | $36,000 |
| Acquisition Fee Payments | 100% | $10,000 | 100% | $10,000 |
| Total (4) | --- | $72,400 | $111,300 | |
Potential Participation by Electric Guitar PLC
Vega Upstream JV has issued to Electric Guitar plc an option to participate in the Midcon Acquisition via the purchase of a 50.0% interest in the Operated Upstream and Midstream Assets (“ELEG Option”). If ELEG elects to exercise the ELEG Option, ADM and COG will be compensated, at closing of the exercise of the ELEG Option, by (i) a US$300,000 total fee payable to ADM and COG (the “ELEG Acquisition Fee”). Up to 50.0% of the total amount of the ELEG Acquisition Fee may be settled by ELEG through issuance of ordinary shares at the placing price associated with any placing completed in conjunction with its RTO transaction with the remaining 50.0% to be settled in cash; and, (ii) a warrant over 5.0% of the enlarged share capital of ELEG at an exercise price that is 150% of the placing price of ordinary shares issued by ELEG with its RTO (the “ELEG Warrants”).
ADM will receive US$100,000 and COG will receive US$200,000 of the ELEG Acquisition Fee. ADM and COG will split the ELEG Warrants evenly upon exercise and closing of the transactions contemplated by the ELEG Option.
Related Party Transaction
COG is a company owned and controlled by Claudio Coltellini who is a director of the Company. The participation by both ADM and COG in the Midcon Acquisition, including entering into the Purchase Agreement and Deposit Funding Agreement constitutes related party transactions pursuant to Rule 13 of the AIM Rules for Companies (the “Transactions”).
With the exception of Claudio Coltellini, the Directors of the Company consider, having consulted with its nominated adviser, Cairn Financial Advisers LLP, that the terms of these Transactions are fair and reasonable insofar as its shareholders are concerned.
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.
Enquiries:
| ADM Energy plc | +1 214 675 7579 |
| Randall Connally, Executive Director | |
| www.admenergyplc.com | |
| Cairn Financial Advisers LLP | +44 20 7213 0880 |
| (Nominated Adviser) | |
| Jo Turner, Liam Murray | |
About ADM Energy PLC
ADM Energy PLC (AIM: ADME; BER and FSE: P4JC) is a natural resources investing company with investments including a 100.0% ownership interest in Vega Oil and Gas, LLC; a 60% economic interest in Eco Oil; a 42% economic interest in OFX Technologies, LLC ( www.ofxtechnologies.com ); and 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.
Forward Looking Statements
Certain statements in this announcement are, or may be deemed to be, forward-looking statements. Forward looking statements are identified by their use of terms and phrases such as "believe", "could", "should", "envisage'', "estimate", "intend", "may", "plan", "potentially", "expect", "will" or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward-looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.
