ADM Energy PLC (LON:ADME) had told investors that operations at the OML 113 licence in Nigeria have remained uninterrupted by the coronavirus (COVID-19) pandemic and that it has been able to cut production costs significantly.
The company noted that the Aje field, part of OML 113, continues to produce from the Aje-4 and Aje-5 wells on the Turonian reservoir.
It noted that talks are continuing between the field's partners over the next phase of activity, based around further development of the Turonian gas and liquid reserves.
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Meanwhile, the company noted that the partners have been able to strike agreements with service providers to secure significant cost reductions, including a 35% reduction in operational and maintenance costs and a 40% reduction in the cost of the FPSO (floating production, storage and offloading) vessel lease.
ADM pointed out that the asset-level measures will allow it conserve to cash. It also noted that, as of June 12, it had £200,000 of cash and access to £100,000 of loan facilities which, together, are expected to be sufficient to maintain the company’s operations until the end of 2020.
“To steer ADM through the current low oil price environment, we have taken appropriate measures with a significant cost reduction plan, both at a corporate level and on the asset side, to streamline our operations while maintaining production levels,” Osamede Okhomina, ADM chief executive said in a statement.
“This flexibility ensures we remain profitable at an asset level and allows us to benefit from a positive forward curve in the oil price. As a result of these actions, ADM is now better positioned to execute its growth investment strategy, supported by a strong foundation of our quality oil-producing asset," he added.