Completion of Barracuda Field Transaction

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.

28 April 2021

ADM Energy PLC 

("ADM" or the "Company") 

Completion of Barracuda Field Transaction

ADM finalises deal to invest in the development of the Barracuda oil field

First oil of 4,000 bopd targeted in H2 2021 with favourable accelerated economics

Further to the announcement on 23 March 2021, ADM Energy PLC (AIM: ADME; BER and FSE: P4JC), a natural resources investing company, is pleased to announce it has completed its acquisition of a controlling interest in a Risk Sharing Agreement for the development of the large-scale Barracuda Field in OML 141 (the "Field"), an existing discovery and near-term production asset in swamp/shallow waters offshore Nigeria.

Highlights

·    ADM acquires a 51% interest in K.O.N.H. UK Limited ("KONH") (the "Investment"), which holds a 70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141

·    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

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

·    New CPR on the Field expected to be completed in the coming months

·    ADM's internal estimate suggests that first oil of 4,000 barrels of oil per day ("bopd") may be possible in H2 2021

·    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 to US$12/bbl (from US$20/bbl)

Details of Payment

Following completion of the Investment, ADM has paid US$0.25 million (approximately £180,000) in cash and US$0.55 million (approximately £395,000) in ordinary shares at the price of 7p.  As a result, ADM has issued 5,657,912 in ordinary shares of 1 pence each at 7 pence per share ("New Ordinary Shares"). The New Ordinary Shares are being issued to Calabar Capital Limited which, on admission of the New Ordinary Shares to trading on AIM, will hold 5,657,912 ordinary shares, representing 3.59 per cent. of the issued share capital of the Company. Calabar Capital Limited has entered into a lock-in agreement with the Company not to dispose of any shares issued to it in consideration for the investment for 12 months after the issue of any such consideration shares, save for in certain limited circumstances or upon the prior written consent of the Company.

The overall consideration for the Investment may total up to US$1.3 million payable in cash and equity.  The remainder of the consideration is contingent on demonstrating commercial flow rates from the first new well, and payable as follows:

·    US$0.1 million 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$0.4 million 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: "We are delighted to complete our investment and acquire a controlling interest in a Risk Sharing Agreement for the development of the Barracuda Field. The expectation is for Barracuda Field to come on stream later this year following the drilling of a new well, which, if successful, should give ADM a considerable increase in production volumes and cashflows. With the potential for several new wells in the coming years, we believe this investment and the Barracuda Field represents a compelling opportunity to add significant value to ADM."

Admission to AIM and Total Voting Rights

Application will be made to the London Stock Exchange for the New Ordinary Shares, which will rank pari passu with the Company's existing Ordinary Shares, to be admitted to trading on AIM. Dealings in the New Ordinary Shares are expected to commence at 8.00 a.m. on or around 4 May 2021.

Following the issue of the New Ordinary Shares, the Company will have 157,580,862 ordinary shares of 1p each in issue. There are no ordinary shares are held in treasury. The figure of 157,580,862 may be used by the Company's shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

Capitalised terms in this announcement shall have the meanings given to such terms in the Announcement at 07.00 a.m. on 23 March 2021.

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 OML 141, which covers 1,295 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. 

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.