NIGERIA – ADM Energy PLC, a natural resource investing company, has agreed to invest in the development of the Barracuda oil field in OML 141, an existing discovery and near-term production asset in swamp/shallow waters offshore Nigeria.
The investment will be made by way of an acquisition of a 51% interest in K.O.N.H. UK Limited, which holds an indirect interest in a Risk Sharing Agreement for the Field.
“This is a compelling investment opportunity that provides ADM with the potential to access near-term production upside at minimal risk,” Osamede Okhomina, CEO of ADM Energy plc, said.
“The Barracuda Field in OML 141 fits our strategy to target near-term production assets in proven oil and gas jurisdictions and will establish ADM Energy as a multi-asset player in Nigeria. We will bring technical and financial support to the consortium to develop the asset and take it into production in the second half of this year.
“We have structured the deal to receive an accelerated cash entitlement once the field is in production, with the intention that the cost of the first well will be supported by our financing partner, Dubai Bridge Investments.”
Consideration for the Investment may total up to US$1.3 million of which US$0.25 million is to be settled in cash on completion and the balance is to be settled in equity, at the higher of 7p and the then prevailing share price, on completion and on satisfaction of certain project milestones.
ADM will provide technical and financial support in return for favourable accelerated economics.
“We partnered with ADM at the end of last year because their strategy aligned with our own of seeking out investment opportunities in the energy sector in Africa,” HE Zubair Al Zubair, Chairman of Dubai Bridge Investments, said.
“The Barracuda Field, an attractive near-term production asset with significant potential upside, is the type of excellent opportunity we envisioned when we first decided to collaborate with ADM.
“Our planned financial backing combined with ADM’s extensive contacts and breadth of experience of the region and the oil and gas industry forms a formidable partnership and we look forward to building a long-term relationship.”
The Company intends to raise approximately US$0.5 million in cash by way of a subscription, for new ordinary shares to, inter alia, provide funding for the Investment. The subscription will be effected by way of an accelerated bookbuild, at a price of 4.25 pence per new ordinary share.
As part of the Fundraise, the Company intends to enter into subscription agreements with investors and certain of its directors and PDMRs.
