TIDMADME
RNS Number : 9145N
ADM Energy PLC
28 September 2023
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 September 2023
ADM Energy plc
("ADM" or the "Company")
Half-yearly Results
ADM Energy plc (AIM: ADME; BER and FSE: P4JC), a natural
resources investing company, announces its half-yearly results for
the six months ended 30 June 2023
Investment Highlights:
Blade Oil V, LLC ("Blade V")
-- Acquired Blade V for $1.6 million, containing five oil
leases, including one in the Midway-Sunset Oilfield, a major US
field
-- Primary focus of portfolio is a 70% working interest in a
three-well drilling programme targeting shallow oil production on
the Altoona Lease
-- Concurrent with the acquisition, ADM issued secured
convertible loan notes ("SCLN") worth up to $1.5 million through
subscription agreements
Aje Field, OML 113
-- ADM continues to work with the Aje Partners to progress
development plans for the Aje Field, including replacement of the
Floating Production Storage and Offloading ("FPSO")
Corporate
-- In April 2023, Appointed Stefan Olivier as CEO, previously
co-founder of MX Oil plc (now ADM Energy plc), and Claudio
Coltellini as Non-executive Director
Stefan Olivier, CEO of ADM Energy, said: "I am pleased with the
progress made since joining as CEO of ADM earlier this year. The
acquisition of Blade V, with a portfolio of highly promising North
American oil and gas assets, can be a cornerstone project for the
Company for years to come. During the period, we have also
significantly reduced costs and restructure the short term debt on
our balance sheet, putting ADM on a more solid footing to build on.
Blade V ties in with our strategy to identify near-term cash
generating opportunities in established oil and gas regions to
strengthen our investment portfolio.
"We are excited to forge ahead with plans to drill three wells
at the Altoona Lease which sits within a major US field, the
Midway-Sunset Oilfield. We continue to work with our partners at
Aje to advance development plans as we believe it can be a core
value enhancing asset within our portfolio. The Board and I see a
great opportunity to enhance ADM's value and look forward to
updating the market as we progress."
Enquiries:
ADM Energy plc +44 20 7459 4718
Stefan Olivier, 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
Operating Review
ADM's strategy focuses on identifying investment opportunities
that are near-term producing assets in proven oil and gas
jurisdictions to enhance our investment portfolio.
Acquisition of Blade V
In May 2023, ADM acquired Blade V from OFX Holdings LLC
(Formerly TN Black Gold, LLC ("OFX") for a total maximum
consideration of US$1,614,000. Blade V owns a portfolio of
interests in oil and gas projects, the primary focus of which is a
70% working interest in a three-well drilling programme targeting
shallow oil production on the Altoona Lease in the Midway-Sunset
Oilfield, Kern County, California. The first drill programme is
expected to commence in Q4 2023 and the board is optimistic that
funding for the project will be requested soon under the previously
announced CLN.
The Midway Sunset Oil Field, the largest in California and third
largest in the U.S., has a history of over 3 billion barrels of oil
production since 1889. Surrounded by Chevron Corporation on three
sides, ADM's Altoona Lease is a direct beneficiary of the
infrastructure and pipelines built to service Chevron's production
in the area. The Altoona Lease is a unique opportunity for ADM to
benefit from substantial investment and de-risking of the target
opportunities by a major company.
Aje
Aje remains a core part of our investment portfolio and the next
steps will be for the JV Partners to agree on the long-term field
development plans for the Aje Field. Discussions with JV partners
are ongoing to replace the current FPSO and unlock the field's vast
wet gas potential estimated at 1.2 trillion cubic feet. Production
remains temporarily paused while the partners agree the development
plans and the Company will update the market in due course.
Barracuda
As previously stated, due to the strategic focus of the Company
on the recent acquisition and potential of Blade V, alongside the
protracted legal proceedings at Barracuda, the Company made the
decision to write off the investment in Barracuda for prudence.
New leadership and board changes
Stefan Olivier was appointed as CEO in April 2023. Stefan has
extensive experience in the oil and gas sector, including as the
co-founder of MX Oil plc, now ADM Energy. Stefan has been on the
Boards of several other public and private companies and brings
years of experience of working in natural resources. He will drive
forward our strategy of building a multi-asset portfolio, as
evidenced in his short time here by the acquisition of Blade V.
In addition, the Board further strengthened to Board with the
appointment of Claudio Coltellini as a Non-executive Director. With
approximately 15 years of investment experience in the U.S. oil and
gas sector, Claudio currently holds the position of CEO in multiple
private U.S. oil and gas companies, each with a focus on
investments in Texas, California, Kansas, and Louisiana. His
extensive expertise positions him perfectly to contribute valuable
insights and guidance as we harness the potential of the Company's
Blade V acquisition.
Financial Review
During the period, the Company significantly reduced
administrative expenses to GBP292,000 year-on-year (H1 2022:
GBP897,000 loss).
Loss for the period decreased 55% to GBP460,000 (H1 2022:
GBP834,000 loss)
On 25 May 2023, the Company announced, alongside the acquisition
of Blade V, that it has entered into subscription agreements to
issue secured convertible loan notes ("SCLNs") with an aggregate
face value of up to US$1.5 million, of which US$900,000 has been
subscribed for and US$600,000 remaining available for subscription.
The SCLN has a three-year term, an interest rate payable-in-kind
(which maybe settle with cash or non-cash payments) of 8.0% per
annum and the principal together with any interest due may be
converted at any time at a share price of 1.2p per share.
In addition to the subscriptions, the Company agreed with
certain directors and creditors to convert outstanding contractual
liabilities of GBP683,117 into 56,926,417 new ordinary shares in
the Company at the price of 1.2p per new ordinary share.
The Company also continues to work with its creditors and larger
shareholders to restructure and refinance its short term
liabilities with structure, medium term debt whilst the Company
looks to develop cash generating assets. Accordingly, the Company
has entered into a loan facility for GBP 125,000 from Catalyse
Capital Ltd on a six month basis, maturing on 1 March 2024, with an
interest rate of 15.0% for the term. The proceeds of the loan will
be used for working capital and business development purposes.
Outlook
The Blade V acquisition has provided ADM with highly prospective
assets including, with Altoona, assets in the third largest
oilfield in the United States. These assets offer an exciting
opportunity to add value, as well as diversifying the ADM
portfolio. We are quickly moving forward with the development of
these assets, having now secured the funding to initiate
development activities at the Altoona Lease. In addition, we have
worked to prudently reduce our costs throughout this period, which
provides us with a stronger footing through the second half of the
financial year.
Our newly strengthened Board and experienced technical team
provide us with the ability to fully exploit the significant
opportunity the acquisition of Blade V represents. Following
geopolitical uncertainty and price volatility that has
characterised the last year, we are now seeing a strengthened
commodity price environment which we expect to continue over the
medium term and are confident that we will be able to utilise our
experience and exciting asset portfolio to grow and bring value to
the Company.
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2023
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
30 June 30 June 31 December
2023 2022 2022
Notes GBP'000 GBP'000 GBP'000
Continuing operations
Revenue - 600 662
Operating costs(1) (78 ) (530) (369)
Administrative expenses (292) (897) (1,723)
Impairment of investment (576)
Consultancy fee income -
Operating loss (370) (827) (2,006)
Movement in fair value of investments - - -
Finance costs (90) (7) (116)
Loss on ordinary activities
before taxation (460) (834) (2,122)
Taxation - - -
Loss for the period (460) (834) (2,122)
--------------------------------------- ----------------- ------------ ------------ -------------
Other Comprehensive income:
Exchange translation movement 3 (484) 1,370 1,339
--------------------------------------- ----------------- ------------ ------------ -------------
Total comprehensive loss for
the period (944) 536 (783)
--------------------------------------- ----------------- ------------ ------------ -------------
Basic and diluted loss per
share 2
From continuing and total operations (0.1)p (0.3)p (0.8)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 2023
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 2022 10,267 38,014 (709) 960 (37,546) 10,986
Loss for the year - - - - (834) (834)
Exchange translation
movement - - 1,370 - - 1,370
--------------------- ---------- ------------- ------------ -------------- -------- -------
Total comprehensive
expense for the
year - - 1,370 - (834) 536
Issue of new shares 510 51 - - - 561
Share issue costs - (28) - - - (28)
Issue of convertible
loans 10,267 38,014 (709) 960 (37,546) 10,986
Warrants issued
in settlement of
fees - - - - (834) (834)
At 31 December
2022 11,194 38,090 630 943 (39,649) 11,208
Loss for the period - - - - (460) (460)
--------------------- ---------- ------------- ------------ -------------- -------- -------
Exchange translation
movement - - (484) - - (484)
--------------------- ---------- ------------- ------------ -------------- -------- -------
Total comprehensive
gain for the period - - (484) - (460) (944)
--------------------- ---------- ------------- ------------ -------------- -------- -------
Issue of new shares 726 146 - - - 871
Share issue costs - - - - -
At 30 June 2023 11,920 38,236 146 943 (40,109) 11,135
--------------------- ---------- ------------- ------------ -------------- -------- -------
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Unaudited Unaudited Audited
30 June 30 June 31 December
Notes 2023 2022 2022
GBP'000 GBP'000 GBP'000
--------------------------------------- ------- -------------- -------------- -------------
NON-CURRENT ASSETS
Intangible assets 17,593 17,970 17,899
Fixed asset investments - 576 -
17,593 18,546 17,899
----------------------------------------------- -------------- -------------- -------------
CURRENT ASSETS
Investments held for trading 28 28 28
Inventory 35 36 36
Trade and other receivables 39 201 22
Cash and cash equivalents 86 127 25
------------------------------------------------ -------------- -------------- -------------
188 392 111
----------------------------------------------- -------------- -------------- -------------
CURRENT LIABILITIES
Trade and other payables 1,322 1,920 2,240
Borrowings 67 289 -
1,389 2,209 2,240
----------------------------------------------- -------------- -------------- -------------
NET CURRENT LIABILITIES (1,201) (1,817) (2,129)
NON-CURRENT LIABILITIES
Convertible loans - - -
Other borrowings 1,072 247 287
Other payables 2,626 2,951 2,718
Decommissioning provision 1,559 1,476 1,557
------------------------------------------------ -------------- -------------- -------------
5,257 4,674 4,562
----------------------------------------------- -------------- -------------- -------------
NET ASSETS 11,135 12,055 11,208
------------------------------------------------ -------------- -------------- -------------
EQUITY
Ordinary share capital 11,920 10,777 11,194
Share premium 38,236 38,037 38,090
Other reserves 971 960 962
Currency translation reserve 135 661 630
------------------------------------------------ -------------- -------------- -------------
Retained deficit (40,126) (38,380) (39,668)
------------------------------------------------ -------------- -------------- -------------
Equity attributable to owners of
the Company and total equity 11,135 12,055 11,208
------------------------------------------------ -------------- -------------- -------------
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2023
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
-------------------------------------------- ---------- ---------- -------------
OPERATING ACTIVITIES
Loss for the period (460) (834) (2,122)
Adjustments for:
Fair value adjustment to investments - - -
Warrants issued in settlement of - -
fees -
Finance costs 90 7 116
Share based payment expense 9 - -
Impairment of intangible assets - - 576
Depreciation and amortisation - - 65
Decommissioning charge 73 65 138
Operating cashflow before working
capital changes (288) (762) (1,227)
(Increase) in inventories 1 - -
(Increase)/decrease in receivables (17) (71) 108
Increase/(decrease) in trade and
other payables (720) 241 138
--------------------------------------------- ---------- ---------- -------------
Net cash outflow from operating activities (1024) (592) (961)
--------------------------------------------- ---------- ---------- -------------
INVESTMENT ACTIVITIES
Proceeds on disposal of investments - - -
Acquisition of subsidiary - - -
Net cash outflow from investment
activities - - -
-------------------------------------------- ---------- ---------- -------------
FINANCING ACTIVITIES
Issue of ordinary share capital 682 561 1,061
Share issue costs - (28) (56)
Proceeds from short term loans 595 170 210
Repayment of borrowings (193) (100) (328)
Net cash inflow from financing activities 1,084 603 887
--------------------------------------------- ---------- ---------- -------------
Net increase/(decrease) in cash
and cash equivalents from continuing
and total operations 60 11 (94)
Exchange translation difference 1 6 9
Cash and cash equivalents at beginning
of period 25 110 110
C ash and cash equivalents at end
of period 86 127 25
--------------------------------------------- ---------- ---------- -------------
NOTES TO THE HALF-YEARLY REPORT
1. The financial information set out in this half-yearly 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 half-yearly 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
half-yearly 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 2023, the Group recorded a loss for the period of
GBP0.46m and had net current liabilities of GBP1.20m, after
allowing for cash balances of GBP86k. In May 2023 the Company
announced, alongside the acquisition of Blade V, that it has
entered into subscription agreements to issue secured convertible
loan notes ("SCLN") with an aggregate face value of up to US$1.5
million, of which US$900,000 has been subscribed for and US$600,000
remaining available for subscription. The SCLN has a three-year
term, an interest rate payable-in-kind (which maybe settle with
cash or non-cash payments) of 8.0% per annum and the principal
together with any interest due may be converted at any time at a
share price of 1.2p per share. In addition to the subscriptions,
the Company agreed with certain directors and creditors to convert
outstanding contractual liabilities of GBP683,117 into 56,926,417
new ordinary shares in the Company at the price of 1.2p per new
ordinary share, helping the company reduce the liabilities on the
balance sheet. Also with the change of management the focus of the
company is now on finding near term producing assets so the company
can start earning revenue. In May 2023 the company announced the
investment in Blade V which holds an interest across 5 different
wells in USA, all with near term revenue potential.
As part of this deal, the company also has circa $251k available
under its debt facility with OFX.
The Directors have prepared cashflow forecasts for the period to
June 2024 to assess whether the use of the going concern basis for
the preparation of the financial statements is appropriate. In the
short term, between the loan facility, potential revenue and CLN
proceeds the Group does not expect to need short term funding to
meet its liabilities as they fall due however the group does expect
in the period that more funding might be needed. The Directors have
a reasonable expectation based on past performance and current
discussions of support from stakeholders that additional finance
would be available should it be needed. Accordingly, the directors
consider it reasonable to prepare the financial statements on the
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 2022 2022
(unaudited) (unaudited) (audited)
------------------------------------------- ------------------ ----------------------- --------------------
Weighted average number of
shares in the period 333,468,072 249,563,736 252,369,021
------------------------------------------- ------------------ ----------------------- --------------------
Loss from continuing and total
operations (GBP460,000) (GBP834,000) (GBP2,122,000)
Basic and diluted loss per
share:
From continuing and total operations (0.1)p (0.3)p (0.8)p
3. Exchange translation movement
For the 6 months to 30 June 2023, the Group has reported
GBP-0.48m as Other comprehensive income, an exchange translation
movement. This loss 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
2023 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 half-yearly 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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