viewADM Energy PLC

ADM Energy operations at OML 113 largely uninterrupted by pandemic


  • Investment company with stake in OML 113 / Aje field
  • Minimal coronavirus disruption
  • Tie-up with commodity trader Trafigura
  • Acquisition ‘doubles’ production and reserves
ADM Energy acquisitive growth strategy boosted by OML 113 deal

Quick facts: ADM Energy PLC

Price: 4 GBX

Market: AIM
Market Cap: £2.97 m

OML 113 is well known to us and it is a fantastic asset that covers the spectrum of field types from current oil production to several appraisal plays.

Osamede Okhomina, ADM Energy chief executive


What it owns

Newly refocussed, restaffed and re-energised – ADM Energy Plc (LON:ADM has emerged out of the remains of the MX Oil vehicle and its attentions are initially pointed on the OML 113 asset, which includes the Aje field.

Aje has multiple oil, gas and gas condensate reservoirs.

ADM seeks to build on this initial asset base through other investment opportunities across the West African region in the oil and gas sector.

A transaction with Nigerian firm EER sees the company increase its stake in OML 113, adding a 2.25% interest for US$3mln (of which US$2mln will be paid in shares).

Once complete, ADM’s participating stake in OML 113 will increase to 4.9% - with its revenue and cost bearing interests moving to 9.2% and 12.3%, respectively.

ADM’s net proved and probable reserves will increase to 16.4mln barrels from 8.9mln barrels. Net production will accordingly increase to 273 barrels of oil per day from 148 bopd.

OML 113 is described as being “well known” to the company, and, it comprises current oil production plus several exploration and appraisal plays.


How it is doing

Operations at OML 113 have remained largely uninterrupted during the coronavirus pandemic with stable production levels.

Earlier this year, ADM struck a deal with commodities trader Trafigura to find potential deals in the African energy sector.

If the planned “strategic alliance” is formed, AIM-listed ADM will be in charge of “originating, analysing, developing, structuring and negotiating” potential projects with other parties and then will present them to Trafigura for further evaluation.

For any projects that Trafigura gives the green light to, the Dutch commodities trader will then provide ADM with pre-financing of up to US$100mln to acquire or develop the assets.

Specific agreements will be negotiated for any agreed projects, with both companies working to arrange any necessary debt and equity funding, while Trafigura will have exclusive rights to market whatever crude oil is produced.


What the boss says: Osamede Okhomina, chief executive


"Keeping to our stated plan, we have completed the second stage of this agreement with EER, taking us another step closer to concluding the transaction and increasing our position in OML 113, which is a high-quality asset."

"Despite the wider, global macroeconomic issues, we believe the longer-term outlook remains very positive within our market. We are focused on continuing to execute our strategy and are well placed to do so having recently strengthened our financial position." 




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