TIDMADME
RNS Number : 7026A
ADM Energy PLC
23 January 2020
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO
CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE
MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF
THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE
IN THE PUBLIC DOMAIN.
23 January 2020
ADM Energy PLC
("ADM" or the "Company")
Strategy Update
ADM Energy PLC (AIM:ADME), an oil and gas investing company
quoted on AIM, provides a strategy update for 2020 and beyond.
In the second half of the year, the Company made significant
changes to the Board and strengthened the management team to take
advantage of the assets now being made available across Nigeria and
West Africa.
Specifically, it appointed Osamede ("Osa") Okhomina, a
specialist in the Nigerian Oil & Gas sector with deep-rooted
connections in the country and across West Africa, as its Chief
Executive Officer. It also appointed Peter Francis, a veteran of
the oil industry, as Non-Executive Chairman, and financier Manuel
Lamboley as Non-Executive Director.
As a result of the Board and management changes, the Company
will be progressing in a meaningful way its plans to build a larger
investment portfolio of projects. By leveraging its extensive
network across Africa, the new management team has identified a
number of investment opportunities and contines to evaluate new
potential investments in assets at varying stages of the production
cycle including appraisal, development and producing assets. It has
also actively engaged in conversations with a number of parties
including potential funding partners, off-takers and local project
partners to further support the Company in the development of its
asset portfolio.
Investment Approach
The Company's primary approach to investments will be to
"option" appraisal assets where oil and gas has already been
discovered, conduct a detailed evaluation, and then make a debt or
equity contribution to access future upside. The benefit of this
approach is that the Company raises equity only after the asset has
been secured.
The Board believes that in the upstream sector, the
international oil companies ("IOC") have divestment programmes
planned and management estimates that up to 500,000 barrels per day
could be sold to independent operators. For these deals to be
financed, they will require local expertise, close relationships
and experience of operating in the region. As a result, ADM plans
to acquire value investments by adopting the following methods:
International Trading Partners
In the Board's opinion, the major oil traders have become the
de-facto financiers for many acquisitions, however they often
struggle to find partners with the necessary credibility. It is the
intention of ADM to use the relationships of the senior management
team to partner with these trading companies, who can provide
capital for projects identified by ADM and whose strong balance
sheets will underpin ADM's potential asset purchases.
Debt Finance
Furthermore, the Company has mature, long-standing relationships
in place with key providers of debt within Africa which are
supportive of natural resource deals. These can potentially provide
the Company with funding to be deployed alongside its equity
investment.
Equity as Currency
In addition to the IOCs, there are several local companies
looking for financing. In this instance, ADM intends to use its
local experience and trusted relationships of its leadership team
to invest in such companies willing to do part-cash and part-equity
deals.
Corporate Update
The appointment of Osa as CEO in July 2019 significantly
expanded ADM's network of industry contacts and expertise in oil
and gas across West Africa. Osa, who was educated in Nigeria and
the UK before attending Cambridge University, has 18 years'
experience in the upstream oil & gas sector, originating and
completing multiple transactions in Nigeria as well as Equatorial
Guinea, Libya and Mauritania, including joint ventures with
ExxonMobil and Chevron. As a result, he has extensive industry
contacts within Nigeria and with IOCs. He also has considerable
familiarity with how the Nigerian government works through his
personal business dealings with several federal ministries.
Additionally, the Company has augmented the Board with the
appointment of Peter Francis as Non-Executive Chairman, bringing
over 35 years of experience working with major international oil
companies including ExxonMobil.
ADM has also appointed Manuel Lamboley, a financier with over 30
years' experience in international broking and investment banking,
predominantly in the natural resources sector, to the role of
Non-Executive Director. Manuel is based in Geneva and holds
extensive contacts with commodity trading houses and European
Investors. He has been instrumental in helping to bring fresh
capital into the Company.
Since August 2019, ADM has raised approximately GBP1.32 million
in two fundraises to help strengthen its balance sheet. In doing
so, it has brought in new long-term investors which have helped to
build up the Company's supportive shareholder base.
Meanwhile, the recent appointment of Fox-Davies Capital Limited
("Fox-Davies") as the Company's Lead Broker, and Fox-Davies Capital
DIFC as financial adviser, adds signficiant specialist knowledge of
the industry and African markets that will assist ADM in executing
its investment strategy. As a broker, Fox-Davies has extensive
relationships with dedicated oil investors and investors outside
the UK. The Company believes this to be a complementary appointment
to the work and assitance provided by Pello Capital.
The Company has also appointed a financial controller to
strengthen its accounting function. These measures are part of
ADM's commitment to add both technical expertise and financial
oversight as the Company seeks to expand its investment
portfolio.
Osamede Okhomina, CEO of ADM Energy, commented: "I joined ADM
because I have long recognised the value that could be created by
structuring oil and gas opportunities through public markets. The
Company has set out a clear strategy based on the strength of our
existing asset base and our team's ability to identify additional
undervalued investments. As a country, Nigeria represents a
compelling value proposition for investors. It is a buyer's market,
with many of the oil majors embarking on significant divestment
programmes. This opens up an opportunity for companies that have
the local contacts, experience and financing options to acquire
assets at very attractive prices. Consequently, we are very much
looking forward to an exciting 2020 for ADM and hope to have an
active deal flow to accelerate our growth."
For further information, please contact:
ADM Energy plc +44 20 7786 3555
Osamede Okhomina, CEO
Cairn Financial Advisers LLP +44 20 7213 0880
(Nominated Adviser)
Jo Turner, James Caithie
Fox-Davies Capital Ltd +44 20 3884 8450
(Lead Broker)
Daniel Fox-Davies, Lionel Therond
Pello Capital Limited +44 20 3700 2500
(Joint Broker)
Dan Gee
Luther Pendragon +44 20 7618 9100
(Financial PR)
Harry Chathli, Alexis Gore, Joe Quinlan
About ADM Energy PLC
ADM Energy (AIM:ADME) is a natural resources investment company
with an existing asset base in Nigeria. ADM Energy holds a 5%
equity investment in the Aje Field, part of OML 113, which covers
an area of 835 sq km 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, route to early
cash flow and exploration upside.
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END
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