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10 December 2020

ADM Energy PLC
("ADM" or the "Company")

ADM completes EER Transaction following receipt of Ministerial Consent

ADM finalises deal to consolidate its interest in OML 113 and nearly double its net revenue, reserves and production

ADM Energy PLC (AIM: ADME; BER and FSE: P4JC), a natural resources investing company, is pleased to announce that it has received ministerial consent from the Nigerian Minister of Petroleum Resources ("DPR") to complete the transfer of a participating interest of 2.25% in OML 113 (the "Block") from EER (Colobos) Nigeria Limited ("EER") to the Company.

Highlights

• ADM acquires 25% of the interests, rights and obligations held by EER in OML 113
• Participating interest in OML 113 will increase to approximately 4.9% from 2.7%
• Corresponding profit and cost bearing interests will increase from 5.0% to 9.2% and from 6.7% to 12.3% respectively
• Net 2P reserves increase to 16.4 MMboe from 8.9 MMboe (as announced on 2 May 2019)
• Net daily production is expected to rise to approximately 196 bopd from 106 bopd, based on current production

Peter Francis, Non-Executive Chairman of ADM Energy plc, said: "The completion of this deal consolidates our position in the Aje Field, a proven and versatile oil producing asset offshore Nigeria. We nearly double our share of revenue, reserves and net production, and with the joint venture partners targeting three new wells in 2021, net daily production to ADM is projected to rise to as much as 1,000 barrels per day.

"This transaction aligns with our growth strategy and is typical of the type of deal we want to achieve to build value for ADM. We have gained a strong foothold in an oil field that we understand intimately. We have de-risked the asset through our technical expertise and working alongside high-quality partners. Having completed the transaction at a premium to our share price, we now stand to benefit by developing the field and unlocking the upside for shareholders. Building on this platform, we are focused on advancing the multiple other deals we are working on and growing our exposure to value accretive, high-quality assets.

"In addition, Hessia Group Limited, an existing investor in ADM and the beneficial holder of the Consideration Shares as part of the completion of this agreement, becomes the Company's largest shareholder and remains a long term and supportive holder of ADM shares."

Yinka Ogundare, CEO of EER, said: "We are very pleased to deepen our ties with ADM by concluding this transaction. Their expertise and access to funding will help the partners to move forward with plans to increase oil production at the Aje Field and monetise the rich gas and liquids reserves."


Background
OML 113 covers an area of 835km² in the western Nigeria offshore Dahomey basin, some 24km south of the coast and 64km from Lagos, in water depths ranging from 100 to 1,000 metres. The West African Gas Pipeline intersects the northwest part of the licence. There are currently five partners in the licence: Yinka Folawiyo Petroleum Company Limited, New Age Exploration Nigeria Limited, Pan Petroleum Aje Limited (whose interest was recently acquired by PetroNor ASA), EER and ADM.

In February 2020, ADM entered into a sale and purchase agreement with EER to acquire, subject to certain conditions, a participating interest of 2.25% from EER in the Block ("the Agreement"). Following the receipt of DPR ministerial consent, these conditions have now been met and the title can be transferred to the Company subject to admission of the consideration shares noted below.

Details of Payment
The total consideration for the Agreement is US$3,000,000, originally intended to be satisfied by the issue of US$2,000,000 of new ordinary shares at 7 pence per share and US$1,000,000 in cash at the time of completion.

In May 2020, the Company announced that it had paid a deposit of US$250,000, comprising US$125,000 in cash and US$125,000 in equity through the issue of 4,242,696 new ordinary shares of 1 pence each at 2.4 pence per share at an exchange rate of US$1.23:£1. In August 2020, ADM and EER agreed that of the remainder of the cash component of US$750,000, US$250,000 would be settled in shares, at a price of 5.5 pence per share at the prevailing exchange rate at the time of completion, and US$500,000 would be settled in cash.

The Company has paid US$100,000 of this remaining US$500,000 cash balance and reached a further agreement with EER to accept a convertible loan note (the "CLN") for the outstanding US$400,000, with an interest charge at 10 per cent. per annum and the term of the loan being 18 months from completion. The CLN grants EER or its nominees the right but not the obligation to convert the loan of US$400,000 into new ordinary shares of 1 pence each at 7 pence per share. All closing conditions, save for admission of the consideration shares, have now been met and the transaction will complete on admission.

As a result of the above, the total number of shares to be issued in respect of consideration for the Agreement ("Consideration Shares") is as follows:

Consideration Shares

• US$2,000,000 of new ordinary shares at 7 pence per share (at an exchange rate of 1.3386), being 21,344,262 new ordinary shares
• US$250,000 of new ordinary shares at 5.5 pence per share (at an exchange rate of 1.3386), being 3,395,678 new ordinary shares

Convertible Loan Note

• US$400,000 convertible to new ordinary shares at 7 pence per share

The issue of the 24,739,940 Consideration Shares represents 20.15 per cent. of the enlarged issued share capital of the Company. As a result of the issue of the Consideration Shares, Hessia Group Limited, the beneficial holder of these Consideration Shares, will hold 28,982,636 ordinary shares representing an interest of 23.61 per cent. of the enlarged issued share capital of the Company.

Issue of New Ordinary Shares, Admission to Trading and Total Voting Rights
Following satisfaction of all other conditions other than admission, application has been made for 24,739,940 new ordinary shares to be admitted to trading on AIM ("Admission"). It is expected that admission of the shares will become effective and dealings will commence at 8.00 a.m. on or around 15 December 2020.

Following Admission, the Company's enlarged issued share capital will comprise 122,769,073 ordinary shares of 1 pence each with voting rights in the Company. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in the interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Related Party Transaction
Osamede Okhomina, the CEO of the Company, was a non-executive director of EER (Colobus) Nigeria Limited until 14 May 2020. Accordingly, the amendment of the payment terms of the Agreement in respect of the proposed acquisition of the interest from EER constitutes a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. Accordingly, with the exception of Osamede Okhomina, its directors consider, having consulted with the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.


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About ADM Energy PLC

ADM Energy PLC (AIM: ADME; BER and FSE: P4JC) is a natural resources investing company with an existing asset base in Nigeria. ADM Energy holds a 9.2% profit interest in the 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.

ADM Energy is seeking to build on its existing asset base in Nigeria and target other investment opportunities across the West African region in the oil and gas sector with attractive risk reward profiles such as proven nature of reserves, level of historic investment, established infrastructure and route to early cash flow.

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