TIDMADME
RNS Number : 4737G
ADM Energy PLC
30 March 2022
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 March 2022
ADM Energy PLC
("ADM" or the "Company")
Barracuda CPR
ADM Energy PLC (AIM: ADME; BER and FSE: P4JC), a natural
resources investing company, announces the result of a competent
person's report on the Barracuda prospect in OML141, offshore
Nigeria.
As announced on 28 April 2021, the Company acquired a 51 per
cent. stake in K.O.N.H (UK) Limited ("KONH") and through that a
controlling interest in a Risk Sharing Agreement ("RSA"), for which
KONH holds a 70 per cent. interest. The Company, together with a
consortium of parties with an interest in the RSA, intends to
provide or procure funding for all capital expenditure ("Capex"),
subject to the joint operators' approval to develop any discovered
hydrocarbons, in return for 235 per cent. of approved Capex to be
recovered plus a 15 per cent. net profit interest ("NPI"). The
equity owners of OML 141 are Emerald Energy Resources Limited
("Emerald") (54 per cent.), Amni International Petroleum
Development Company Limited (44 per cent.) and Supernova Energy
B.V. (2 per cent.).
ADM commissioned Xodus Group Limited ("Xodus") to prepare a CPR
on the Barracuda area and Xodus has calculated gross, unrisked
Prospective Resources for the RSA using standard geological and
engineering approaches applied to the data made available by
ADME.
OML 141 lies predominately within the coastal swamp in the Niger
Delta in Nigeria. The Barracuda area is located in the northwest of
OML 141 in which four exploration wells have previously been
drilled. Three wells were drilled in 1967 and the most recent
exploration well, Barracuda-4 (BX-1), was drilled in 2007 by
Emerald and CNOOC Ltd. This well provides the most relevant data
for classifying the resources. Prior to the publication of this CPR
by Xodus, the Barracuda RSA was the subject of a CPR undertaken by
Ryder Scott in 2016. Xodus has reviewed the available relevant
Barracuda data and has not identified convincing evidence as to the
presence of light, producible hydrocarbons. There are, however,
numerous indications as to the presence of heavy, residual
hydrocarbons from past migration and both Ryder Scott (in 2007) and
Xodus have concluded that the Barracuda resources should be
classified as prospective.
The Company and Xodus identified four potential Agbada Sandstone
reservoirs: C, D1A and D1B plus a 'Deep Prospect'. STOIIPs for
these reservoirs were calculated probabilistically. The prospective
resource has been assessed separately for each individual reservoir
unit and collectively for the combined reservoirs. This approach
aligns with that of previous evaluations. In all cases, Xodus used
a slab model (a range of constant thicknesses over the fixed areas
of reservoir extent).
The estimate of STOIIP pertaining to the combined reservoirs,
C3, D1A, D1B and 'Deep Prospect' is shown below:
STOIIP (UNRISKED) GROSS VOLUMES
Reservoir P90 P50 P10 CoS %
(mmbbl) (mmbbl) (mmbbl)
======================= =========== =========== =========== ========
C3 106 193 343 15%
======================= =========== =========== =========== ========
D1A 15 25 43 30%
======================= =========== =========== =========== ========
D1B 70 103 149 18%
======================= =========== =========== =========== ========
Deep Prospect 20 51 131 25%
======================= =========== =========== =========== ========
Combined 275 397 574
Source : Xodus Group Limited
Xodus based its estimates of reservoir and production parameters
on data provided by ADME supplemented with data from nearby
analogue fields. Xodus used the same drilling and development
schedule as described in the economic model provided by ADME to
calculate prospective resource ranges. These represent resources
for a first phase development plan which ADME designed to exploit
any future discovery in the D1A/B reservoirs. Discovery of larger
volumes would require additional phases of development to recover
the hydrocarbons.
The economic model supplied by ADME has been reviewed against
the RSA scope and provisions to confirm that the economic model
represents the RSA accurately. Xodus has used this model with its
independent production profiles, and CAPEX and OPEX adjustments to
assess the economics of the RSA. For the 2U (P50) case the NPV10 is
+$99mm with an IRR of 45% and therefore the prospect is considered
to be robust for development, assuming at least 70mmbbl STOIIP is
discovered.
PROSPECTIVE RESOURCES (RISKED) GROSS VOLUMES OPERATOR
=============================== ================================= ==================================
1U 2U 3U
(mmbbl) (mmbbl) (mmbbl)
=============================== ========== ========== ========= ==================================
Barracuda RSA OML 141 20.7 24.0 27.8 Emerald Energy Resources Limited
Source : Xodus Group Limited
Osamede Okhomina, CEO of ADM Energy, said: "Following the
rigorous independent analysis from Xodus, the results of the CPR
covering the Barracuda prospect in OML141 show that the prospect is
considered prospective and robust for development, with a 2U (P50)
case, the NPV10 is +$99mm with an IRR of 45%.
"The report provides a solid foundation to continue to the next
stage of technical review which will include further subsurface
analysis. We will also look to procure more analogue data from
neighbouring fields to better understand the trap mechanisms. This
additional work will be required to further appraise the asset and
will bring us closer to making an investment decision."
Enquiries:
ADM Energy plc +44 20 7459 4718
Osamede Okhomina, CEO
www.admenergyplc.com
Cairn Financial Advisers LLP +44 20 7213 0880
(Nominated Adviser)
Jo Turner, James Caithie
Hybridan LLP +44 20 3764 2341
(Broker)
Claire Louise Noyce
ODDO BHF Corporates & Markets AG +49 69 920540
(Designated Sponsor)
Michael B. Thiriot
Luther Pendragon +44 20 7618 9100
(Financial PR)
Harry Chathli, Alexis Gore, Tan Siddique
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 835km(2) offshore
Nigeria. 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 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.
About Xodus
Xodus is an independent, international energy consultancy.
Established in 2005, the company has over 400 subsurface and
surface focused personnel spread across the globe. The wells and
subsurface division specialise in petroleum reservoir engineering,
geology and geophysics and petroleum economics. All of these
services are supplied under an accredited ISO9001 quality assurance
system.
As a global energy consultancy, Xodus unites unique and diverse
people to share knowledge, innovate and inspire change within the
energy industry. We provide support across the energy spectrum,
from advisory services to supply chain advice. Including all of the
engineering and environmental expertise needed in between. Our
people strive to ensure global energy supply as we all work
together to realise a net zero world.
Standard
In compiling the CPR, Xodus used the definitions and guidelines
set out in the 2018 update of the Petroleum Resources Management
System ("PRMS") prepared by the Oil and Gas Reserves Committee of
the Society of Petroleum Engineers ("SPE") and reviewed and jointly
sponsored by the World Petroleum Council ("WPC"), the American
Association of Petroleum Geologists ("AAPG") and the Society of
Petroleum Evaluation Engineers ("SPEE").
CPR and Competent Person's Review
This announcement has been reviewed by Wim Burgers, technical
consultant for the Company, a qualified production geologist with
more than 40 years' experience in the oil and gas industry, who has
also reviewed the CPR report to which it relates.
This announcement has also been reviewed by Jonathan Fuller, a
qualified petroleum engineer and employee of Xodus, the Competent
Person for the purposes of the CPR.
The information above has been extracted from the CPR and
shareholders are advised to read the CPR in full. A copy of the CPR
will shortly be available on the Company's website,
www.admenergyplc.com .
Glossary
1U, 2U and 1U, 2U and 3U represent low, best and high case estimates
3U of Prospective Resources respectively as defined in
PRMS.
P10, P50, The probability, being a 10 per cent., 50 per cent.
P90 or 90 per cent. chance, that the actual volume will
be greater than or equal to that stated.
bbls barrels
bopd barrels of oil per day
CoS (%) Exploration or geological chance of success. The probability,
typically expressed as a percentage that a given outcome
will occur.
gross 100% of the resources attributable to the licence.
MMbbls Million barrels
Prospective Prospective Resources are those quantities of petroleum
estimated, as of a given date, to be potentially recoverable
from undiscovered accumulations by application of future
development projects. Prospective Resources have both
an associated chance of discovery and a chance of development.
Prospective Resources are further subdivided in accordance
with the level of certainty associated with recoverable
estimates assuming their discovery and development and
may be sub-classified based on project maturity.
Reserves Those quantities of petroleum anticipated to be commercially
recoverable by application of development projects to
known accumulations from a given date forward under
defined conditions on production, approved for development
or justified for development. Reserves are also classified
according to the associated risks and probabilities
(1P, 2P and 3P).
Risked With the application of a geologic risk assessment
STOIIP Stock tank oil initially in place
Unrisked Without the application of a geologic risk assessment
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END
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