ADM Energy has announced the completion of its acquisition of a controlling interest in a Risk Sharing Agreement for the development of the large-scale Barracuda field in OML 141, an existing discovery and near-term production asset in swamp/shallow waters offshore Nigeria. This recent deveploment is coming barely less than a week of ADM proclamation of going into non-binding agreement with some Nigerian companies in a plan to explore opportunities to develop Barracuda Field.
1) Increase production to ca.23,000 bopd by drilling six wells by 2026
2) Develop a 12km pipeline to Brass Export Terminal, reducing operating expenditure to US$12/bbl (from US$20/bbl)
Details of Payment
Following completion of the Investment, ADM has paid US$0.25 million (approx. £180,000) in cash and US$0.55 million (approx. £395,000) in ordinary shares at the price of 7p. As a result, ADM has issued 5,657,912 in ordinary shares of 1 pence each at 7 pence per share. The New Ordinary Shares are being issued to Calabar Capital which, on admission of the New Ordinary Shares to trading on AIM, will hold 5,657,912 ordinary shares, representing 3.59 per cent. of the issued share capital of the Company. Calabar Capital has entered into a lock-in agreement with the Company not to dispose of any shares issued to it in consideration for the investment for 12 months after the issue of any such consideration shares, save for in certain limited circumstances or upon the prior written consent of the Company.
The overall consideration for the Investment may total up to US$1.3 million payable in cash and equity. The remainder of the consideration is contingent on demonstrating commercial flow rates from the first new well, and payable as follows:
‘We are delighted to complete our investment and acquire a controlling interest in a Risk Sharing Agreement for the development of the Barracuda Field. The expectation is for Barracuda Field to come on stream later this year following the drilling of a new well, which, if successful, should give ADM a considerable increase in production volumes and cashflows. With the potential for several new wells in the coming years, we believe this investment and the Barracuda Field represents a compelling opportunity to add significant value to ADM,’ Osamede Okhomina, CEO of ADM Energy, said.
ADM Energy holds a 9.2% profit interest in the oil producing Aje Field, part of OML 113, which covers an area of 835km² offshore Nigeria. Aje has multiple oil, gas, and gas condensate reservoirs in the Turonian, Cenomanian and Albian sandstones with five wells drilled to date.
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