ADM Energy PLC (LON:ADM) completed the acquisition of a controlling interest in a Risk Sharing Agreement for the development of the large-scale Barracuda Field, in OML 141 located in swamp and shallow water offshore Nigeria.
The company now owns a 51% interest in the K.O.N.H. UK Limited vehicle which in turn owns 70% of Barracuda.
It will provide technical and financial support to the consortium and will receive favourable accelerated economic terms plus a 15% net profit interest in the field.
The consortium partners will conduct a fresh work programme and a new competent persons report is expected in the coming months. Looking ahead to the second half of 2021, the company said its own internal estimates indicate production of around 4,000 barrels per day may be possible.
Moreover, ADM noted that there may be opportunity to further increase field productivity from further drilling.
In the longer term, a development comprising six wells could yield around 23,000 bopd supported by a 12 kilometre pipeline.
To acquire the interest in Barracuda the company paid £180,000 (US$250,000) and £395,000 (US$550,000) in shares, priced at 7p each. Future contingent payments may see the total deal consideration rise up to US$1.3mln.