ADM Energy plc, a natural resources investing company, announces its interim results for the six months ended 30 June 2021.
OML 113 - Aje Field, Nigeria (9.2% equity investment)
· Two wells (Aje-4 and Aje-5) producing at an average of 1,360 bopd (H1 2020: 2,126 bopd), equating to a current net rate to ADM of 125 bopd (H1 2020: 106 bopd) The drop in volume reflected the decision by the JV partners to continue a more thorough and extended period of maintenance on the FPSO while oil prices were depressed.
· Total gross production volume of approximately 246,240 barrels of oil from 1 January to 30 June 2021
· 15th Lifting in April 2021 marked the first lifting since the Company finalised an agreement in December 2020 to consolidate its interest in the asset
· Acquired an indirect interest in a Risk Sharing Agreement (RSA) for the development of the Barracuda Field
· Disposed of 188,778 shares in Superdielectrics Ltd for a total consideration of £849,501, a profit of £656,003 on ADM's original investment
· Extended strategic alliance MoU with Trafigura for a further 12 months to develop African energy projects and provide conditional pre-finance of up to US$120 million
· Raised £1,220,000 in an equity fundraising in March 2021
· Post period, ADM strengthened the Board and technical team by adding high-calibre individuals with industry expertise and experience:
o Oliver Andrews, former Chief Investment Officer at the African Finance Corporation, appointed Non-executive Chairman
o Industry veteran Dr Babatunde Pearse appointed to the technical team as Chief Engineer to oversee the next phase of development at Aje
ADM continued to make progress on its strategy to build a multi-asset portfolio by targeting projects with highly attractive risk-reward profiles. In particular, the six months to 30 June 2021 marked the first full period since the Company consolidated its position in OML 113, increasing ADM's profit interest from 5% to 9.2%, and resulted in a significantly higher rate of net production.
The Company was active in pursuing new opportunities and extended its MOU with global trading house Trafigura Pte Ltd ("Trafigura"). Post period, the ADM further strengthened its Board and technical team with the appointment of Oliver Andrews as Non-executive Chairman and Dr Babatunde Pearse as Chief Engineer.
OML 113 - Aje Field
In the six months to 30 June 2021, oil production continued from two wells at the Aje Field (Aje-4 and Aje-5) at an average of 1,360 bopd (H1 2020: 2,126 bopd). Total gross production volume amounted to approximately 246,240 barrels of oil. Following the completion of the transaction with EER (Colobos) Nigeria Limited ("EER") in December 2020, the Company benefitted from an increased 9.2% profit interest in the field. As a result, the net rate of production attributable to ADM increased to 167 bopd (H1 2020: 106 bopd).
In April 2021, the Company announced the completion of the 15th Lifting at the Aje Field for a total of 225,000 barrels (52,000 barrels were left in the tank). In this first Lifting since ADM consolidated its interest in the Aje Field, the Company received a net share of 27,675 barrels, which equated to ADM's paying interest of approximately 12.3%. The proceeds of the Lifting were applied against the project debt, significantly reducing the outstanding balance.
In May 2021, the Company completed the sale of 188,778 shares in Superdielectrics Ltd ("Superdielectrics") for a total consideration of £829,501, a profit of £656,00 on ADM's original investment. The sale followed a funding round by Superdielectrics in October 2020 that valued ADM's total holding at £877,500, representing a total book profit of £677,625 and an increase in value of approximately 340%. ADM retains a holding of 6,222 shares in Superdielectrics following the sale.
OML 141 - Barracuda Field
In March 2021, the Company acquired an indirect interest in a Risk Sharing Agreement ("RSA") for the development of the Barracuda Field. Located in OML 141, the Barracuda Field is an existing discovery and near-term production asset, which covers 103 km2 in the swamp/shallow waters of the Niger Delta. The Company has commissioned a Competent Person's Report ("CPR") on the Barracuda Field. ADM has received a draft of a preliminary report however it is not yet finalised pending further technical appraisal. Once finalised, ADM will be in a better position to conclude the full CPR report as well as its strategy for the Barracuda field.
Extension of Trafigura MOU
Access to capital is a key competitive advantage for ADM and supports the Company's strategy to acquire undervalued assets and unlock value. In January 2021, the Company announced a 12-month extension to its indicative MOU with Trafigura, the multi-billion-dollar global trading house. The intention is to create a strategic alliance where ADM will act as the sponsor for investment opportunities, with Trafigura providing up to US$100 million in approved project finance as well as up to US$20 million of convertible loan notes. The Company has engaged Trafigura on a number of potential deals to date and this extension is a reflection of the strong relationship between both parties.
Post period, the Company appointed Oliver Andrews as the new Non-executive Chairman following the departure of Peter Francis due to personal circumstances. Mr Andrews is the former Chief Investment Officer at the Africa Finance Corporation, one of the largest investment funds in Africa. Over the last 35 years, he has overseen investments of approximately US$10bn and originated investments deals in natural resources and infrastructure across the continent, worth US$100bn.
In addition, ADM further bolstered its technical team to advance the Company's existing assets and evaluate new prospects. Having last year enlisted non-Board advisors, Darrell McKenna and Dr Satinder Purewal as Lead Technical consultants, the Company appointed Dr Babatunde Pearse, as Chief Engineer post period. Dr Pearse is an industry veteran with an extensive background with International Oil Companies ("IOC"s). He is primarily responsible for planning the next phase of the Aje development and oversees Front End Engineering Design ("FEED") studies to support the Final Investment Decision.
On 24 March 2021 the company announced an oversubscribed fundraising. The company issued 28,710,250 shares at 4.25p for a total amount of £1,220,000 before expenses.
On 8th April 2021, the company issued 443,627 shares to settle various loans. 208,333 shares were issued at 2.4 pence per share, 235,294 shares were issued at 4.25 pence per share.
On 28th April, the company announced it completed a controlling interest in a Risk Sharing Agreement for the development of the large-scale Barracuda Field in OML 141. Initial consideration was $0.25m along with 5,657,912 of ADM shares at a price of 7 pence per share.
On 4th May 2021, ADM's CEO Osa Okhomina purchased 480,446 ordinary shares at 3.45 pence per share.
On 22 June 2021, the company announced it had extended 2 loan agreements. £100k had been extended to 31 December 2021, and £100k has been extended to 30 June 2022. 4,705,882 new warrants were issued in respect of the loan extension.