ADM Energy PLC (AIM:ADME, XETRA:P4JC), the natural resources investing company, saw its shares surge as much as 75% after announcing the formation of a joint venture to acquire a portfolio of producing oil and gas wells in Oklahoma for a base purchase price of approximately $14.9 million.
The joint venture, Vega Upstream JV, has been formed with Covenant Oil Group Corp and has executed a purchase agreement for the Midcon Assets, a portfolio comprising operated and non-operated producing natural gas, natural gas liquids and oil wells, together with a fee-generating natural gas gathering system.
ADM will contribute approximately $100,000 in equity to the joint venture in exchange for a 50% membership and voting interest and a 10% asset interest in the underlying Midcon Assets.
The acquisition is expected to be financed primarily through an institutional credit facility of approximately $14 million, with closing anticipated on or before 31 May 2026.
The Midcon Assets include an average 49.4% working interest in 28 operated wells and an average 3.9% working interest in approximately 250 non-operated wells across multiple Oklahoma counties, alongside a midstream gathering system transporting around 4.4 million cubic feet of natural gas per day.
Expected net revenue to the joint venture over the next twelve months from existing production is approximately $850,000.
ADM will also earn a $300,000 acquisition fee, payable at $10,000 per month over 30 months following closing.
The transaction constitutes a related party transaction under AIM rules, as Covenant Oil Group is owned and controlled by Claudio Coltellini, a director of ADM Energy.
After their initial surge, the shares settled at 0.016p for a gain of 53%.