RNS Number : 9675D
ADM Energy PLC
27 June 2023
 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN. 

 

27 June 2023

 

ADM Energy PLC  

("ADM", the "Group" or the "Company")  

 

Final Results, Publication of Annual Report and Notice of AGM

 

ADM Energy PLC (AIM: ADME; BER and FSE: P4JC), a natural resources investing company, announces its audited full year results for the 12 months ended 31 December 2022.

 

Aje Field, OML 113

 

·    In July 2022, PetroNor E&P Limited's ("PetroNor") completed its acquisition of Panoro Energy ASA's ("Panoro") interest in OML 113

·    In August 2022, completed the 17th Lifting at the Aje Field totalling 94,187 barrels with a net share of 8,683 barrels to ADM, which equates to ADM's profit interest of approximately 9.2%

·   JV Partners are progressing development plans for the Aje Field, including replacement of the Floating Production Storage and Offloading ("FPSO"), and as a result there is currently a pause in production

 

Post period, Investment in Onshore US Oil Leases and Work Programme

 

·    Invested in five oil leases through an acquisition of Blade Oil V, LLC for US$1,614,000 (the "acquisition"). The focus of the acquisition is one lease in the Midway-Sunset Oilfield, one of the largest fields in the US

·  Primary focus of US portfolio is a 70.0% working interest participation in an initial three well drilling programme to target shallow oil production on the Altoona Lease

·    Concurrent with the acquisition, ADM has entered into subscription agreements to issue secured convertible loan notes ("SCLN") with an aggregate face value of up to US$1.5 million

 

Corporate and Financial Highlights

 

·   Made directorate changes with appointments of Stefan Olivier as CEO, previously co-founder of MX Oil plc (now ADM Energy plc), and Claudio Coltellini as Non-executive Director

·    Revenue was £0.7m (2021: £1.8m)

·    Operating costs reduced by 81% to £0.4m (2021: £1.9m)

·    Loss before and after tax was £2.1m (2021: £2.5m)

·  In January 2022, the Company completed an equity fundraising of approximately £561,000 with Optima Resources Holding Limited

·  In October 2022, the Company completed an equity fundraising of approximately £725,000 through a subscription and loan from OFX Holdings, LLC (formerly TN Black Gold, LLC) ("OFX")

 

Stefan Olivier, CEO of ADM Energy, said: "Having recently joined ADM, I am really excited about the period that lies ahead of us. Since becoming CEO, we have been honing our strategy, which focuses on identifying investment opportunities that are near-term producing assets in proven oil and gas jurisdictions to enhance our investment portfolio. In light of this, I am very pleased that we have already made our first investment, acquiring Blade V which owns a portfolio of North American Oil and Gas assets in a highly prospective region. We are hugely excited to add these assets to our investment portfolio and the opportunity to add significant value for shareholders.

 

"Looking forward, we are aiming to progress both the development plans at Aje alongside the JV partners, as well as developing these new North American assets. Consequently, both the Board and I can see a great opportunity to bring value to ADM and its shareholders and we look forward to updating the market on our progress on these milestones in due course."

 

Annual Report and Accounts and Notice of AGM

 

The Company will shortly be publishing its Annual Report and Accounts including a Notice of AGM. These will be made available on the Company's website at www.admenergyplc.com.  The AGM is to be held at the offices of Shakespeare Martineau, 60 Gracechurch St, London EC3V 0HR at 10.00 a.m. on 25 July 2023.

 

Enquiries:

 

ADM Energy plc

+44 20 7459 4718

Stefan Olivier, CEO


www.admenergyplc.com




Cairn Financial Advisers LLP

+44 20 7213 0880

(Nominated Adviser)


Jo Turner, James Caithie




Hybridan LLP

+44 20 3764 2341

(Broker)


Claire Louise Noyce


 

ODDO BHF Corporates & Markets AG

 

+49 69 920540

(Designated Sponsor)


Michael B. Thiriot




Gracechurch Group

+44 20 4582 3500

(Financial PR)


Harry Chathli, Alexis Gore, Henry Gamble

 


 

About ADM Energy PLC

ADM Energy is a natural resources investment company with oil and gas assets in Nigeria and the US. We hold a 9.2% profit interest in the Aje Field, part of OML 113 in Nigeria. We also hold a portfolio of interests in oil and gas projects, the primary focus of which is a 70.0% working interest participation in an initial three well drilling programme to target shallow oil production on the Altoona Lease, in the Midway-Sunset Oilfield, California, the third largest oil field in the US.

 

We are seeking to build on our existing asset base and target other investment opportunities across the West African region in the oil and gas sector. These will be based on attractive risk reward profiles such as proven nature of reserves, level of historic investment, established infrastructure, route to early cash flow and exploration upside.

Operating Review

 

ADM's strategy focuses on identifying investment opportunities that are near-term producing assets in proven oil and gas jurisdictions to enhance our investment portfolio.

 

Acquisition of Blade V

 

In May 2023, ADM invested in a portfolio of interests via the acquisition of Blade V from OFX Holdings LLC (Formerly TN Black Gold, LLC ("OFX"), a total maximum consideration of US$1,614,000.

 

Blade V owns a portfolio of interests in oil and gas projects, the primary focus of which is a 70.0% working interest participation in an initial three well drilling programme to target shallow oil production on the Altoona Lease located in the Midway-Sunset Oilfield, Kern County, California.

 

The Midway Sunset Oil Field has produced in excess of 3 billion barrels of oil since production began in 1889. It is the largest known oilfield in California and the third largest in the United States. Chevron Corporation has been operating in the San Joaquin Valley for over 100 years and its interests in the area represent its core, onshore USA assets. The Altoona Lease is a highly unique opportunity for a small company to benefit from substantial investment and de-risking of the target opportunities by a major company. Surrounded by Chevron on three sides, the project is a direct beneficiary of the infrastructure and pipelines built to service Chevron's production in the area.

 

In addition, the interests held by Blade V comprise:

 

·    100.0% working interest in the Schweitzer Lease in Graham County, Kansas where a work-over programme to restore production from two wells is currently in process.

·    50.0% fully funded working interest in a three well workover programme in Texas targeting initiation of production from three wells.

·    50.0% working interest in the Pearson, Oberlin and Moon Leases, a three well workover programme. 

·    Total gross and net leasehold acreage associated with the acquisition is 423 acres and 295.5 acres, respectively. 

·    ADM will be a non-operating financial investor in the interests.

 

Further information regarding the Blade V portfolio can be found in the acquisition announcement of 25 May 2023. Details of ADM's interests are as follows:

 

Lease/Well

County, State

Working Interest

Net Revenue Interest

Operator (1)

Altoona

Kern, CA

70.0%

52.5%

To Be Determined1

Pearson

Grimes, TX

50.0%

37.5%

Guardian2

Oberlin

Upshur, TX

50.0%

37.5%

Guardian2

Moon

Upshur, TX

50.0%

37.5%

Guardian2

Schweitzer

Graham, KS

100.0%

75.0%

Tex Oil, LLC3

  

Notes:

1.    Altoona: a California licensed and bonded contract operator to be determined by OFX and ADM.

2.    Guardian Energy Operating Co., LLC is a registered Texas operator 75.0% owned by OFX. 

3.    Tex Oil, LLC is a registered Kansas operator. 

 

The acquisition of Blade V ties into my vision for ADM to expand our investment portfolio by bringing in quality, near term production assets with low risk and high upside that can add significant value to the Company. 

 

Aje Field

 

In July 2022, the Joint Venture development of Aje took an important step forwards when PetroNor E&P Limited ("PetroNor") announced that it had completed the purchase of 100% of Aje Interests of Panoro Energy ASA ("Panoro"). PetroNor agreed to acquire Panoro's interest in OML 113 for an upfront consideration of USD 10 million, with a contingent consideration of up to USD 16.67 million based on future gas production volumes. The completion of a purchase of interests in Aje from an established, heavyweight partner such as PetroNor demonstrates the strong value proposition posed by the asset. With the transaction completed, the next stage will be for the JV Partners to agree on the long-term field development plans for the Aje Field.

 

Discussions are continuing with the JV partners regarding plans to replace the current Floating Production Storage and Offloading ("FPSO") to increase gas handling capacity and support development plans to monetise the field's significant wet gas potential, which is estimated at potentially 1.2 trillion cubic feet of wet gas resources.

 

In August 2022, the 17th lifting at the Aje Field was carried out for a total of 94,187 barrels with a net share of 8,683 to ADM. This lifting was drawn from oil previously stored on the FPSO as there was no oil production from the Aje Field (Aje-4 and Aje-5) in 2022. As previously announced, the JV partners implemented a suspension of production at Aje to upgrade the FPSO and increase the capacity and production capability in line with the development plans.

 

Barracuda

 

ADM is currently following legal proceedings in respect of its interest in the Barracuda oil field. As announced on 13 December 2021, the Company and K.O.N.H. (UK) Ltd ("KONH") obtained an interim injunction at the Federal High Court of Nigeria, Lagos ("Court") restraining Noble Hill-Network Limited ("NHNL"), its officers, agents, privies, or person howsoever connected from selling, disposing, divesting, or tampering with the 70% shareholding interest of KONH in NHNL to third-party investors or in any other manner whatsoever. The interim injunction continues to stand.

 

During the period, the Company announced the result of the CPR on the Barracuda Field with a 2U (P50) case, the NPV10 is +$99mm with an IRR of 45%, assuming at least 70mmbbls STOIIP is discovered.

 

Following the appointment of a new CEO (and subsequent investment and focus on developing the Blade V assets) and the protracted legal proceedings and settlement discussions, the management team and Board have made the decision to write-down the investment in Barracuda for prudence.

 

New leadership and board changes

 

The Board was pleased to appoint Stefan Olivier as CEO in April 2023, replacing former CEO, Osa Okhomina. Stefan has extensive corporate broking and oil and gas experience, including as the co-founder of MX Oil plc, now ADM Energy. He played a pivotal role in securing and financing the participation of ADM in the Aje field and in securing the support of OFX prior to its initial investment in the Company.

 

Stefan has been on the Boards of several other public and private companies and brings years of experience of working in natural resources. He will drive forward our strategy of building a multi-asset portfolio, as evidenced in his short time here by the acquisition of Blade V.

 

The board was also strengthened by the addition of Claudio Coltellini as Non-executive Director. Claudio has invested in the U.S. oil and gas sector for approximately 15 years and is CEO of four private US oil and gas companies focused on investment in the states of Texas, California, Kansas and Louisiana, and well placed to share his expertise to help capitalise on the Company's acquisition of Blade V.

 

Financial Review

 

For the year ended 31 December 2022, the Group's revenue decreased by 62.2% to £0.7 million (2021 £1.8 million), reflecting the suspension of production at Aje.


Operating costs decreased by 80.5% to £0.4 million (2021 £1.9 million).


Decommissioning provision amounted to £1.6 million (2021 £1.3 million). Depreciation & amortisation expense increased by 38.3% to £0.07 million (2021: £0.05 million).


Administrative expenses decreased by 26.3% to £1.7 million (2021: £2.3 million). Finance costs increased to £0.12 million (2021 £0.06 million).

 

Loss after taxation decreased 16.5% to £2.1 million (2021: £2.5 million loss). The Directors do not propose a dividend (2021 £nil).

As of 31 December 2022, the Group had cash and cash equivalents of £0.025 million 31 December (2021 £0.3 million).

 

Funding

 

The Company raised a total of £1.29 million through two fundraises in 2022. In January 2022, the Company raised a total of £561,000 through a subscription with Optima Resources Limited, with funds used for general working capital expenditures. In October 2022, the Company then raised approximately £725,000 through a subscription and a loan from OFX Holdings, LLC (formerly TN Black Gold, LLC) ("OFX"). The subscription raised a total of £500,000, combined with a $250,000 loan facility.

 

In May 2023 the Company announced, alongside the acquisition of Blade V, that it has entered into subscription agreements to issue secured convertible loan notes ("SCLN") with an aggregate face value of up to US$1.5 million, of which US$900,000 has been subscribed for and US$600,000 remaining available for subscription. The SCLNs subscriptions have been received and no SCLNs will be issued until cash has been received. The SCLN has a three-year term, an interest rate payable-in-kind (which maybe settle with cash or non-cash payments) of 8.0% per annum and the principal together with any interest due may be converted at any time at a share price of 1.2p per share.

 

In addition to the subscriptions, the Company agreed with certain directors and creditors to convert outstanding contractual liabilities of £683,117 into 56,926,417 new ordinary shares in the Company at the price of 1.2p per new ordinary share.

 

Going Concern

 

At 31 December 2022, the Group recorded a loss for the year of £2.12m and had net current liabilities of £2.13m, after allowing for cash balances of £25k. In 2022 the company raised £1.29m through two fund raises.  In May 2023 the Company announced, alongside the acquisition of Blade V, that it has entered into subscription agreements to issue secured convertible loan notes ("SCLN") with an aggregate face value of up to US$1.5 million, of which US$900,000 has been subscribed for and US$600,000 remaining available for subscription. The SCLN has a three-year term, an interest rate payable-in-kind (which may be settled with cash or non-cash payments) of 8.0% per annum and the principal together with any interest due may be converted at any time at a share price of 1.2p per share. In addition to the subscriptions, the Company agreed with certain directors and creditors to convert outstanding contractual liabilities of £683,117 into 56,926,417 new ordinary shares in the Company at the price of 1.2p per new ordinary share, helping the company reduce the liabilities on the balance sheet.  Also with the change of management the focus of the company is now on finding near term producing assets so the company can start earning revenue.   In May 2023 the company announced the investment in Blade V which holds an interest across 5 different wells in USA, all with near term revenue potential.  As part of this deal, the company also has circa $251k available under its debt facility with OFX.  

 

The Directors have prepared cashflow forecasts for the period to June 2024 to assess whether the use of the going concern basis for the preparation of the financial statements is appropriate. In the short term, between the loan facility, potential revenue and CLN proceeds the Group does not expect to need short term funding to meet its liabilities as they fall due however the group does expect in the period that more funding might be needed.  The Directors have a reasonable expectation based on past performance and current discussions of support from stakeholders that additional finance would be available should it be needed.  Accordingly, the directors consider it reasonable to prepare the financial statements on the going concern basis.

 

Outlook

 

ADM has undergone a period of change, reflected in the recent additions to our management team and the acquisition of Blade V, that has solidified the Company's foundations.

 

Blade V provides ADM with an exciting portfolio of oil and gas assets including acreage in one of the largest oil fields in North America, a tier-one jurisdiction. The acquisition, and its significant potential upside, can be a gamechanger for ADM and we are excited by the opportunity ahead of us. The coming year will be an important period as we progress the well drilling programmes at Blade V and the JV partners progress with plans for Aje.

 

In addition to our current portfolio, we think the strength and experience of our Board and technical team places us in an ideal position to capitalise on new opportunities as they arise, particularly as recent global events this past year have underscored the vital importance of stable global oil and gas supply. The Company and the Board is confident that it can effectively leverage its knowledge and expertise across its portfolio to generate value for the Company.




 

Group Income Statement and Statement of Comprehensive Income

For the year ended 31 December 2022

 


 

2022

2021


Note

£'000

£'000

 

 

 

 


Continuing operations

 

 



 

 


Revenue

3

662

1,751


 

 


Operating costs

 

(369)

(1,895)

Administrative expenses

 

(1,723)

(2,340)

Impairment of investment

11

(576)

-


 

 


Operating loss

4

(2,006)

(2,484)


 

 


Movement in fair value of investments

 

-

-

Finance costs

5

(116)

(56)


 

 


Loss on ordinary activities before taxation

 

(2,122)

(2,540)


 

 


Taxation

7

-

-


 

 


Loss for the year

 

(2,122)

(2,540)

Other Comprehensive income:

 

 


Exchange translation movement

 

1,339

141

Total comprehensive income for the year

 

(783)

(2,399)


 

 


Basic and diluted loss per share:

8

 


From continuing and total operations

 

(0.8)p

(1.6)p


 

 


 

 

 








Group and Company Statements of Financial Position

As at 31 December 2022


 

GROUP

COMPANY


 

2022

2021

2022

2021


Notes

£'000

£'000

£'000

£'000


 

 


 


NON-CURRENT ASSETS

 

 


 


Intangible assets

9

17,899

16,149

-

-

Investment in subsidiaries

10

-

-

12,343

12,335

Fixed asset investments

11

-

576

-

576


 

17,899

16,725

12,343

12,911

CURRENT ASSETS

 

 


 


Investments held for trading

12

28

28

28

28

Inventory

13

36

33

-

-

Trade and other receivables

14

22

130

17

130

Cash and cash equivalents

15

25

110

25

109


 

111

301

70

267

CURRENT LIABILITIES

 

 


 


Trade and other payables

16

2,240

1,534

2,207

1,515

Convertible loans

17

-

212

-

212


 

2,240

1,746

2,207

1,727

NET CURRENT LIABILITIES

 

(2,129)

(1,445)

(2,137)

(1,460)


 

 


 


NON-CURRENT LIABILITIES

 

 


 


Other borrowings

17

287

247

287

247

Other payables

16

2,718

2,783

-

-

Decommissioning provision

18

1,557

1,264

-

-


 

4,562

4,294

287

247


 

 


 


NET ASSETS

 

11,208

10,986

9,919

11,204


 

 


 


EQUITY

 

 


 


Share capital 

19

11,194

10,267

11,194

10,267

Share premium

19

38,090

38,014

38,090

38,014

Other reserves

20

962

960

962

960

Currency translation reserve

 

630

(709)

-

-

Retained deficit

 

(39,668)

(37,546)

(40,327)

(38,037)

Equity attributable to owners of the Company and total equity

 

11,208

10,986

9,919

11,204


 

  

Group Statement of Changes in Equity

For the year ended 31 December 2022


Share

 capital

Share

premium

Exchange translation reserve

Other reserves

Retained deficit

Total

equity


£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2021

9,450

36,591

(850)

817

(35,006)

11,002

Loss for the year

-

-

-

-

(2,540)

(2,540)

Exchange translation movement

-

-

141

-

-

141

Total comprehensive income /(expense) for the year

-

-

141

-

(2,540)

(2,399)

Issue of new shares

817

1,517

-

-

-

2,334

Share issue costs

-

(94)

-

27

-

(67)

Issue of convertible loans

-

-

-

2

-

2

Warrants issued in settlement of fees

-

-

-

114

-

114

At 31 December 2021

10,267

38,014

(709)

960

(37,546)

10,986

Loss for the year

-

-

-

-

(2,122)

(2,122)

Exchange translation movement

-

-

1,339

-

-

1,339

Total comprehensive income / (expense) for the year

-

-

1,339

-

(2,122)

(783)

Issue of new shares

927

134

-

-

-

1,061

Share issue costs

-

(56)

-

-

-

(56)

Issue of warrants

-

(2)

-

2

-

-

Settlement of convertible loans

-

-

-

(19)

19

-



 

 

 

 

 

At 31 December 2022

11,194

38,090

630

943

(39,649)

11,208

 

Group Statement of Changes in Equity

For the year ended 31 December 2022


Share

 capital

Share

premium

Other reserves

Retained deficit

Total

equity


£'000

£'000

£'000

£'000

£'000






 

At 1 January 2021

9,450

36,591

817

(35,770)

11,088

Loss for the period and total comprehensive expense

-

-

-

(2,267)

(2,267)

Issue of new shares

817

1,517

-

-

2,334

Share issue costs

-

(94)

27

-

(67)

Issue of convertible loans

-

-

2

-

2

Warrants issued in settlement of fees

-

-

114

-

114






 

At 31 December 2021

10,267

38,014

960

(38,037)

11,204

Loss for the period and total comprehensive expense

-

-

-

(2,290)

(2,290)

Issue of new shares

927

134

-

-

1,061

Share issue costs

-

(56)

-

-

(56)

Issue of warrants

-

(2)

2

-

-

Settlement of convertible loans

-

-

(19)

19

-



 

 

 

 

At 31 December 2022

11,194

38,090

943

(40,308)

9,919

 

 

 

 

Group and Company Statements of Cash Flows

For the year ended 31 December 2022


      GROUP

      COMPANY

Note

2022

2021

2022

2021


 


 




£'000

£'000

£'000

£'000













(2,122)

(2,540)

(2,290)

(2,267)


 


 



-

114

-

114

5

116

56

116

56

11

576

-

576

-

9

65

47

-

-

18

138

215

-

-

Operating cashflow before working capital changes


(1,227)

(2,108)

(1,598)

(2,097)


-

-

-

-


108

(21)

113

(21)

Increase/(decrease) in trade and other payables


138

570

522

545

Net cash outflow from operating activities


(981)

(1,559)

(963)

(1,573)

INVESTMENT ACTIVITIES


 


 


Acquisition of subsidiary


-

(180)

-

(180)

Proceeds on disposal of investments


-

850

-

850

Loans to subsidiary operation

8

-

-

(8)

(19)

Net cash outflow from investment activities


-

670

(8)

651

FINANCING ACTIVITIES


 


 


Continuing operations:


 


 


Issue of ordinary share capital

19

1,061

1,406

1,061

1,406

Share issue costs

19

(56)

(67)

(56)

(67)

Repayment of borrowings


(328)

(338)

(328)

(338)

Proceeds from borrowings


210

-

210

-

Net cash inflow from financing activities


887

1,001

887

1,001

 


 


 



(94)

112

(84)

79


9

(32)

-

-


110

30

109

30



 


 


Cash and cash equivalents at end of period

15

25

110

25

109

 

 


Notes to the Financial Statements

For the year ended 31 December 2022

 

1

general information


The Company is a public limited company incorporated in the United Kingdom and its shares are listed on the AIM market of the London Stock Exchange. The Company also has secondary listings on the Quotation Board Segment of the Open Market of the Berlin Stock Exchange ("BER") and Xetra, the electronic trading platform of the Frankfurt Stock Exchange ("FSE").

The Company is an investing company, mainly investing in natural resources and oil and gas projects. The registered office and principal place of business of the Company is as detailed in the Company Information section of the report and accounts on page 2.

The information included in this announcement has been extracted from the Company's report and accounts and, therefore, references and page numbers may be incorrect.  Shareholders should read the Company's report and accounts in full which will shortly be found on its website.

 

2

PRINCIPAL ACCOUNTING POLICIES


The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied throughout all periods presented in the financial statements.

As in prior periods, the Group and Parent Company financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and interpretations issued by the International Accounting Standards Board (IASB) UK-adopted International Financial Reporting Standards (adopted IFRSs).  The financial statements have been prepared using the measurement bases specified by IFRS for each type of asset, liability, income and expense. The measurement bases are more fully described in the accounting policies below.

The current period covered by these financial statements is the year to 31 December 2022.  The comparative figures relate to the year ended 31 December 2021.  The financial statements are presented in pounds sterling (£) which is the functional currency of the Group.

An overview of standards, amendments and interpretations to IFRSs issued but not yet effective, and which have not been adopted early by the Group are presented below under 'Statement of Compliance'.

STATEMENT OF COMPLIANCE

New standards, amendments and interpretations adopted by the Company

 

The company has applied the following standards and amendments for the first time for its annual reporting period after 1 January 2022:

·      Amendment to "IFRS 4 "Insurance Contracts - deferral of IFRS 9" supports the companies implementing the new IFRS 17 standard and it makes it simpler to report their financial performances.

·      The amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 "Interest Rate Benchmark Reform - Phase 2" integrate the amendments made in 2019. The amendments referred in phase 2, address issues that might affect financial reporting when an existing interest rate benchmark is replaced with an alternative benchmark interest rate (i.e. replacement issue) and assist companies in the application of IFRS when changes are made to contractual cash flows or hedging relationships due to the interest rate reform, and in providing useful information to users of the financial statements.

·      The Amendment to IFRS 16, "Covid-19-Related Rent Concessions beyond 30 June 2021" extends the period of application of the 2020 amendment to IFRS 16, relative to the lessees' accounting of concessions granted as a result of Covid-19, by one year.

The adoption of the standards and interpretations described above, already in effect at the date of this report, did not have a material impact on the measurement of the Group's assets, liabilities, costs and revenues.

 

 

 

3

GOING CONCERN


At 31 December 2022, the Group recorded a loss for the year of £2.13m and had net current liabilities of £2.13m, after allowing for cash balances of £25k. Production was suspended at Aje in the year as part of the development and expansion plans being undertaken at the field.

In 2022 the company raised £1.29m through two fund raises.  In May 2023 the Company announced, alongside the acquisition of Blade V, that it has entered into subscription agreements to issue secured convertible loan notes ("SCLN") with an aggregate face value of up to US$1.5 million, of which US$900,000 has been subscribed for and US$600,000 remaining available for subscription. The SCLN has a three-year term, an interest rate payable-in-kind (which maybe settle with cash or non-cash payments) of 8.0% per annum and the principal together with any interest due may be converted at any time at a share price of 1.2p per share.

 

In addition to the subscriptions, the Company agreed with certain directors and creditors to convert outstanding contractual liabilities of £683,117 into 56,926,417 new ordinary shares in the Company at the price of 1.2p per new ordinary share, helping the company reduce the liabilities on the balance sheet.  Also with the change of management the focus of the company is now on finding near term producing assets so the company can start earning revenue. In May 2023 the company announced the purchase of Blade V which holds an interest across 5 different wells in USA, all with near term revenue potential.  As part of this deal, the company also has circa $251k available under its debt facility with OFX.  

 

The Directors have prepared cashflow forecasts for the period to June 2024 to assess whether the use of the going concern basis for the preparation of the financial statements is appropriate. In the short term, between the loan facility, potential revenue and CLN proceeds the Group does not expect to need short term funding to meet its liabilities as they fall due however the group does expect in the period that more funding might be needed.  The Directors have a reasonable expectation based on past performance and current discussions of support from stakeholders that additional finance would be available should it be needed.  Accordingly, the directors consider it reasonable to prepare of the financial statements on the going concern basis.

 

 

 

4

EARNINGS AND NET ASSET VALUE PER SHARE


Earnings

The basic and diluted earnings per share is calculated by dividing the loss attributable to owners of the Group by the weighted average number of ordinary shares in issue during the year.




2022

2021




£'000

£'000


Loss attributable to owners of the Group


 



- Continuing operations


(2,122)

(2,540)


Continuing and discontinued operations


(2,122)

(2,540)




2022

2021


Weighted average number of shares for calculating basic and fully diluted earnings per share


252,369,021

155,014,671




2022

2021




pence

pence


Earnings per share:


 



Loss per share from continuing and total operations


(0.8)

(1.6)

The weighted average number of shares used for calculating the diluted loss per share for 2022 and 2021 was the same as that used for calculating the basic loss per share as the effect of exercise of the outstanding share options was anti-dilutive.

 

 

 

 

Net asset value per share ("NAV")

The basic NAV is calculated by dividing the loss total net assets attributable to the owners of the Group by the number of ordinary shares in issue at the reporting date.  The fully diluted NAV is calculated by adding the cost of exercising any extant warrants and options to the total net assets and dividing the resulting total by the sum of the number of shares in issue and the number of warrants and options extant at the reporting date.




2022

2021




£'000

£'000


Total net assets of the Group


11,208

10,986


Cost of exercise of warrants


1,159

1,318


Total net assets for calculation of fully diluted NAV


12,367

12,304




2022

2021


Number of shares in issue at the reporting date


297,147,530

204,480,863


Number of extant warrants


26,748,410

31,581,012


Total number of shares for calculation of fully diluted NAV


323,895,940

236,061,875




2022

2021


NAV - Basic (pence per share)


3.8p

5.4p


NAV - Fully diluted (pence per share)


3.8p

5.2p

 

5

AGM


The Company will shortly be publishing its Annual Report and Accounts including a Notice of AGM. These will be made available on the Company's website at www.admenergyplc.com.  The AGM is to be held at the offices of Shakespeare Martineau, 60 Gracechurch St, London EC3V 0HR at 10.00 a.m. on 25 July 2023.

 

 

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