TIDMADME
RNS Number : 1850B
ADM Energy PLC
29 September 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.
29 September 2022
ADM Energy plc
("ADM" or the "Company")
Interim Results
ADM Energy plc (AIM: ADME; BER and FSE: P4JC), a natural
resources investing company, announces its interim results for the
six months ended 30 June 2022.
Investment Highlights:
Aje Field, OML 113
-- The JV Partners are making progress in their development
plans for OML 113 and have been advancing plans to replace the
current Floating Production Storage and Offloading ("FPSO") to
increase gas handling capacity in order to support development
plans to monetise the Field's significant wet gas potential
(estimated at potentially 1.2 trillion cubic feet ("Tcf") of wet
gas resources after redevelopment of the field). *as per AGR Tracs
2019 Competent Persons Report ("CPR")
-- Post-period events:
o In July 2022, ADM noted the conclusion of PetroNor E&P
Limited's ("PetroNor") acquisition of Panoro Energy ASA's
("Panoro") interest in OML 113, providing a strong endorsement of
the quality and considerable potential of the Aje field
o In August 2022, completed the 17(th) Lifting at the Aje Field
totalling 94,187 barrels with a net share of 8,683 barrels to ADM,
which equates to ADM's profit interest of approximately 9.2%
Barracuda Field OML 141
-- Announced the result of the CPR on the Barracuda Field with a
2U (P50) case, the NPV10 is +$99mm with an IRR of 45%, assuming at
least 70mmbbls STOIIP is discovered
-- Post-period, in July 2022, the Court extended the injunction
secured by ADM to November 2022. The Company entered into
settlement talks with Noble Hill-Network Limited ("NHNL")
Corporate:
-- In January 2022, the Company completed an equity fundraising
of approximately GBP561,000 with Optima Resources Holding
Limited
Osamede Okhomina, CEO of ADM Energy, said: "We made good
progress in the first half of 2022. The conclusion of PetroNor's
acquisition of Panoro's stake in the asset demonstrated confidence
in the potential of Aje. The completion of the transaction is
expected to accelerate the JV Partners' Final Investment Decision
on the long-term field development plans to take Aje to the next
stage. The development of the Aje Field will give the partners the
opportunity to monetise the wet gas resources, estimated at
potentially 1.2 trillion cubic feet at Aje. At Barracuda, we
announced the result of our CPR with a 2U (P50) case, the NPV10 is
+$99mm with an IRR of 45%, assuming at least 70 mmbbls STOIIP is
discovered, and further analysis must be carried out in order to
make an investment decision.
"We will continue to target projects of undervalued 2P reserves
with highly attractive risk-reward profiles, as we drive forward
our strategy of building a multi-asset portfolio, having had
encouraging discussions with potential partners regarding various
opportunities. We are also looking in areas of renewable energy
where there are opportunities to add value to our portfolio. We
hope to capitalise on the upcoming prospects that can take ADM
Energy to the next phase of its development and growth."
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
Gracechurch Group +44 20 4582 3500
(Financial PR)
Harry Chathli, Alexis Gore, Henry Gamble
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.
Operating Review
OML 113 - Aje Field
In January 2022, Panoro and PetroNor announced that the
transaction for Panoro to sell 10% of its ownership to PetroNor had
received all government approvals and that the transaction would
formally close within 90 days.
Following this, the conclusion of the transaction came post
period, in July 2022, when it was announced that Panoro had
completed the sale of 100% of its ownership in OML 113 to PetroNor.
PetroNor's decision to take a significant stake in the Aje field
underscores Aje's substantial, long-term, high-quality value
proposition.
The completion of the transaction and the addition of a new,
experienced partner in PetroNor is expected to accelerate the JV
Partners' ability to advance the project to Final Investment
Decision on the long-term field development plans for the Aje
Field. The Field Development Plan, which includes the potential
drilling of three new wells, could significantly increase
production of oil and gas liquids at a time nations around the
world are seeking new sources of oil and gas. Chief Engineer on the
Aje Development, Dr Babatunde Pearse, who has an IOC background and
extensive industry experience will lead the planning, development
and oversee Front End Engineering Design ("FEED") studies to
support the Final Investment Decision.
The JV Partners are now progressing with plans to replace the
current FPSO, following their assessment that it is not a viable
option to facilitate the growth and development plans at OML 113.
As previously announced, the JV partners have committed to a
temporary suspension of production and demobilisation of the field
in order to ensure sufficient capacity and production capability
moving forward. The JV Partners are in discussions with a number of
potential suppliers and working towards securing a suitable FPSO
that will match plans to significantly increase oil production and
monetise over 1.2 Tcf of wet gas resources in the redevelopment of
the Aje field regarding which, the Company will update the market
in due course.
Post period, in August 2022, the Company announced the 17th
lifting at the Aje field for a total of 94,187 barrels. In this
third Lifting since ADM consolidated its interest in the Aje Field,
the Company received a net share of 8,683 barrels, which equated to
ADM's profit interest of approximately 9.2%. The proceeds of the
Lifting contributed towards continued work on the development plans
for the Aje field with the JV Partners.
OML 141 - Barracuda Field
In March 2022, ADM announced the result of a competent person's
report on the Barracuda Field in OML141, offshore Nigeria. The
results of the CPR covering the Barracuda Field in OML141 show
that, 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 70mmbbls STOIIP is discovered.
Barracuda took a major step forward with the completed CPR which
showed it has the potential to be prospective for development. In
2022, the Company will continue work and analysis to help better
understand the asset's potential prior to making a further
investment decision.
Interim Injunction
Following the ongoing legal proceedings in respect to the
Company's interest in Barracuda, the Company and K.O.N.H (UK) Ltd
("KONH") obtained an interim injunction at the Federal High Court
of Nigeria, Lagos ("Court"), restraining NHNL from selling,
disposing, divesting or tampering with the 70% shareholding
interest of KONH in NHNL to third-party investors or in any other
manner whatsoever. Subsequently, NHNL applied to the court to set
aside the interim injunction. The court pronounced NHNL's
application as lacking in merit and the application was
dismissed.
Post period, the Court has adjourned this matter until 16
November 2022. The Company and NHNL informed the Court they are in
settlement discussions with a view to resolving the dispute. If an
agreement cannot be reached that will satisfy the Company's
demands, ADM will await the Court's final determination of the
suit. The interim injunction remains in place.
Financial Review
In t he six months to 30 June 2022, the revenue (GBP600,000) and
accrued operating costs (GBP530,000) reflected the 17th lifting at
the Aje Field equating to a net share of 8,683 barrels for ADM's
9.2% profit interest.
During the period, administrative expenses of GBP897,000 were
down year-on-year (H1 2021: GBP1,173,000) due to cost saving
measures and a decrease in transaction and due diligence
activities.
On 21 January 2022, the Company announced that it had raised a
total of GBP561,000 through a subscription for 51,000,000 shares at
1.1p per share from Optima Resources Holding Ltd. 15.3 million
warrants to subscribe for shares at 4.5p per share were issued in
connection with the share issue. The warrants have an exercise
period of two years.
In the six months to 30 June 2022, ADM's net assets increased by
nearly 10% to GBP12m due to the substantial movement in the USD/GBP
exchange rate in the period, which has had a positive GBP1.4m
impact on the Company's net asset position.
Outlook
The Company made good progress in the first half in 2022,
building a solid foundation for growth. In Aje, ADM has an interest
in a high-quality asset with scope for significant increase in
production. Furthermore, PetroNor taking a considerable stake
emphasises the opportunity in Aje and finalises the addition of
another highly experienced partner to the OML 113 which will
provide ideal support to take Aje to the next stage of
development.
The completion of the Barracuda CPR was a major step forward.
The Company will continue to undergo further analysis to help
recognise the assets full potential before making an informed
investment decision.
In addition, the Company remains in the market to add additional
high-quality assets to its investment portfolio with its expertise,
deep network and access to capital. The Board believes ADM is well
equipped to take advantage of a market whereby upstream majors are
in the process of extensive divestment programmes and, in line with
the Company's growth strategy, ADM will continue to target
undervalued projects in West Africa with attractive risk-reward
profiles and substantial upside for shareholders. In addition, and
as part of its investment strategy, ADM remains open to potential
renewable energy investments, primarily in Europe, if there is an
opportunity to bring additional value to shareholders.
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2022
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
30 June 30 June 31 December
2022 2021 2021
Notes GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 600 785 1,751
Operating costs(1) (530 ) (1,124 ) (1,895)
Administrative expenses (897) (1,173) (2,340)
Impairment of investment -
Consultancy fee income -
Operating loss (827) (1,512) (2,484)
Movement in fair value of investments - - -
Finance costs (7) (25) (56)
Loss on ordinary activities
before taxation (834) (1,537) (2,540)
Taxation - - -
Loss for the period (834) (1,537) (2,540)
--------------------------------------- ----------------- ------------ -------------- -------------
Other Comprehensive income:
Exchange translation movement 3 1,370 (62) 141
--------------------------------------- ----------------- ------------ -------------- -------------
Total comprehensive gain for
the period 536 (1,599) (2,399)
--------------------------------------- ----------------- ------------ -------------- -------------
Basic and diluted loss per
share 2
From continuing and total operations (0.3)p (1.1)p (1.6)p
--------------------------------------- ----------------- ------------ -------------- -------------
(1) ADM Energy's share of operating costs at asset level
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2022
Exchange
Share translation Retained Total
capital Share premium reserve Other reserves deficit equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ---------- ------------- ------------ -------------- -------- -------
At 1 January 2021 9,450 36,591 (850) 817 (35,006) 11,002
Loss for the year - - - - (2,540) (2,540)
Exchange translation
movement - - 141 - - 141
--------------------- ---------- ------------- ------------ -------------- -------- -------
Total comprehensive
expense for the
year - - 141 - (2,540) (2,399)
Issue of new shares 817 1,517 - - - 2,334
Share issue costs - (94) - 27 - (67)
Issue of convertible
loans - - - 2 - 2
Warrants issued
in settlement of
fees - - - 114 - 114
At 31 December
2021 10,267 38,014 (709) 960 (37,546) 10,986
Loss for the period - - - - (834) (834)
--------------------- ---------- ------------- ------------ -------------- -------- -------
Exchange translation
movement - - 1,370 - - 1,370
--------------------- ---------- ------------- ------------ -------------- -------- -------
Total comprehensive
gain for the period - - 1,370 - (834) 536
--------------------- ---------- ------------- ------------ -------------- -------- -------
Issue of new shares 510 51 - - - 561
Share issue costs - (28) - - - (28)
At 30 June 2022 10,777 38,037 661 960 (38,380) 12,055
--------------------- ---------- ------------- ------------ -------------- -------- -------
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
Unaudited Unaudited Audited
30 June 30 June 31 December
Notes 2022 2021 2021
GBP'000 GBP'000 GBP'000
--------------------------------------- ------- -------------- -------------- --------------
NON-CURRENT ASSETS
Intangible assets 17,970 16,430 16,149
Fixed asset investments 576 - 576
18,546 16,430 16,007
----------------------------------------------- -------------- -------------- --------------
CURRENT ASSETS
Investments held for trading 28 28 28
Inventory 36 104 33
Trade and other receivables 201 137 130
Cash and cash equivalents 127 137 110
------------------------------------------------ -------------- -------------- --------------
392 406 301
----------------------------------------------- -------------- -------------- --------------
CURRENT LIABILITIES
Trade and other payables 1,920 4,123 1,534
Borrowings 289 195 212
2,209 4,318 1,746
----------------------------------------------- -------------- -------------- --------------
NET CURRENT LIABILITIES (1,817) (3,912) (1,445)
NON-CURRENT LIABILITIES
Convertible loans - 398 -
Other borrowings 247 - 247
Other payables 2,951 - 2,783
Decommissioning provision 1,476 1,073 1,264
------------------------------------------------ -------------- -------------- --------------
4,674 1,471 4,294
----------------------------------------------- -------------- -------------- --------------
NET ASSETS 12,055 11,047 10,986
------------------------------------------------ -------------- -------------- --------------
EQUITY
Ordinary share capital 10,777 9,798 10,267
Share premium 38,037 37,822 38,014
Other reserves 960 882 960
Currency translation reserve 661 (912) (709)
------------------------------------------------ -------------- -------------- --------------
Retained deficit (38,380) (36,543) (37,546)
------------------------------------------------ -------------- -------------- --------------
Equity attributable to owners of
the Company and total equity 12,055 11,047 10,986
------------------------------------------------ -------------- -------------- --------------
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2022
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
-------------------------------------------- ---------- ---------- -------------
OPERATING ACTIVITIES
Loss for the period (834) (1,537) (2,540)
Adjustments for:
Fair value adjustment to investments - - -
Warrants issued in settlement of
fees - 56 114
Finance costs 7 25 56
Impairment of intangible assets - - -
Depreciation and amortisation - 48 47
Decommissioning charge 65 51 215
Operating cashflow before working
capital changes (762) (1,357) (2,108)
(Increase) in inventories - (72) -
(Increase)/decrease in receivables (71) (28) (21)
Increase/(decrease) in trade and
other payables 241 324 570
--------------------------------------------- ---------- ---------- -------------
Net cash outflow from operating activities (592) (1,133) (1,559)
--------------------------------------------- ---------- ---------- -------------
INVESTMENT ACTIVITIES
Proceeds on disposal of investments - 850 850
Acquisition of subsidiary - (180) (180)
Net cash outflow from investment
activities - 670 670
--------------------------------------------- ---------- ---------- -------------
FINANCING ACTIVITIES
Issue of ordinary share capital 561 932 1,406
Share issue costs (28) (43) (607)
Proceeds from short term loans 170 - -
Repayment of borrowings (100) (352) (338)
Net cash inflow from financing activities 603 537 1,001
--------------------------------------------- ---------- ---------- -------------
Net increase/(decrease) in cash
and cash equivalents from continuing
and total operations 11 74 112
Exchange translation difference 6 33 (32)
Cash and cash equivalents at beginning
of period 110 30 30
C ash and cash equivalents at end
of period 127 137 110
--------------------------------------------- ---------- ---------- -------------
NOTES TO THE HALF-YEARLY REPORT
1. The financial information set out in this interim report does
not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. The group's statutory financial statements for
the period ended 31 December 2021, prepared under International
Financial Reporting Standards (IFRS), have been filed with the
Registrar of Companies. The auditor's report on those financial
statements was unqualified and did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
The interim financial information has been prepared in
accordance with the recognition and measurement principles of
International Financial Reporting Standards (IFRS) and on the same
basis and using the same accounting policies as used in the
financial statements for the year ended 31 December 2021. The
interim financial statements have not been audited or reviewed in
accordance with the International Standard on Review Engagement
2410 issued by the Auditing Practices Board.
Going concern
At 30 June 2022, the Group recorded a loss for the period of
GBP834,000 and had net current liabilities of GBP1,817,000, after
allowing for cash balances of GBP127,000.
The Directors have prepared cashflow forecasts for twelve months
following the date of approval of this interim statement to assess
whether the use of the going concern basis of their preparation is
appropriate. However, in the short term the Group will require
further additional funding in order to meet its liabilities as they
fall due. The Directors have taken into consideration the level and
timing of the Group's working capital requirements and have also
considered the likelihood of successfully securing funding to meet
these needs. In particular, consideration has been given to ongoing
discussions around further third-party investment and the extent to
which these discussions are advanced both in respect of short and
longer term funding. The Directors acknowledge that while they have
an expectation that funding will be secured based on this
assessment, at the date of approval of these financial statements,
no such funding has been unconditionally committed. Therefore,
while the Directors have a reasonable expectation that the Group
has the ability to raise the additional finance required in order
to continue in operational existence for the foreseeable future,
the uncertainty surrounding the ability and likely timing of
securing such finance indicates that a material uncertainty exists
that may cast significant doubt on the Group's ability to continue
as a going concern. Were no such funding to be secured, the Group
would have no realistic alternative but to halt operations and
prepare its financial statements on a non-going concern basis.
2. Earnings per share
The basic loss per share is calculated by dividing the loss
attributable to equity shareholders by the weighted average number
of shares in issue.
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2022 2021 2021
(unaudited) (unaudited) (audited)
------------------------------------------- ------------------ ----------------------- --------------------
Weighted average number of
shares in the period 249,563,736 140,486,609 155,014,671
------------------------------------------- ------------------ ----------------------- --------------------
Loss from continuing and total
operations (GBP834,000) (GBP1,537,000) (GBP2,540,000)
Basic and diluted loss per
share:
From continuing and total operations (0.3)p (1.1)p (1.6)p
3. Exchange translation movement
For the 6 months to 30 June 2022, the Group has reported GBP1.4m
as Other comprehensive income, an exchange translation movement.
This gain has been triggered by the impact of movement in the
currency exchange rates between US dollars and GBP. The Group is
exposed to currency risk to the extent that there is a mismatch
between the currency which assets are held and the Group functional
currency. The functional currency of the Group company is GBP. The
currency in which most assets and liabilities are denominated is US
dollars. Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at the date
of transactions. Foreign currency monetary assets and liabilities
are translated into the functional currency at the rates of
exchange prevailing at the balance sheet date. Foreign exchange
gains and losses resulting from the settlement of foreign currency
transactions and from the translation exchange rates at 30th June
2022 of monetary assets and liabilities denominated in foreign
currencies, are taken to the income statement
4. No interim dividend will be paid.
5. Copies of the interim report can be obtained from: The
Company Secretary, ADM Energy plc, 60,Gracechurch Street, London,
EC3V 0HR and are available to view and download from the Company's
website: www.admenergyplc.com.
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END
IR EAENNAFDAEFA
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