THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

25 August 2020

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

Fundraise and Issue of Equity to Raise £672,500
Update on Acquisition of Further Interest in OML 113

ADM Energy PLC (AIM: ADME; BER and FSE: P4JC), a natural resources investing company, is pleased to announce that it has raised a total of £672,500 by way of a placing and subscription for new ordinary shares in the Company with current and new investors as well as Directors, and an issue of debt (together the "Fundraise"). The funds will be used primarily to complete the cash element of the agreement with EER (Colobos) Nigeria Limited ("EER"), as announced on 24 February 2020, to acquire a further participating interest of 2.25% in OML 113 and increase the Company's stake to 5.0% with a profit interest increase from 5% to 9.2%. The Fundraise has been undertaken by Hybridan LLP, the Company's lead broker.

Highlights

• Placing and subscription to raise gross proceeds of £472,500 through the issue of 8,590,907 new ordinary shares of 1.0 pence each at a placing price of 5.5 pence per share
• Subscriptions by five Directors amounting to £50,000 on the same terms as the placing price
• Further executed Loan Facilities Agreement to raise £200,000
• Additional conversion by debt holders and service providers equating to £395,798 on the same terms as the placing and subscription

Use of Proceeds

• Funds will be used to complete the cash element of the sale and purchase agreement with EER of US$500,000 (£380,825) following renegotiation of the terms (of which US$250,000 deposit has already been paid, as announced on 14 May 2020), and general working capital

Osamede Okhomina, CEO of ADM Energy plc, said: "This funding brings us a step closer to completing our first deal under the Company's new leadership, increasing ADM's position in the highly strategic asset of OML 113. The Aje Field gives us access to reliable oil production, which is estimated to be able to triple next year with further successful drilling, and contains significant wet and dry gas reserves, which command a premium in the local markets. The deal nearly doubles our interests and with it our attributable net 2P reserves and net daily production. I am excited that we are now in a position to close the deal and use it as a springboard for further highly accretive investments in the future."

EER Update
The Company announced on 24 February 2020 that it had entered into an agreement with EER to acquire, subject to satisfaction of certain conditions, a participating interest of 2.25% from EER in oil mining lease no. 113, which includes the Aje field ("the Agreement"). The total consideration for the acquisition is US$3,000,000, to be satisfied by a payment of US$1,000,000 in cash and US$2,000,000 by way of an issue of new ordinary shares. ADM has already paid a refundable deposit of US$250,000 to EER which was announced on 14 May 2020. Following the Fundraise, ADM and EER have agreed that of the remainder of the cash component of US$750,000, US$250,000 will be settled in shares, at a price of 5.5 pence per share, and US$500,000 will be settled in cash. Furthermore, the Company has agreed that the share consideration will be settled in new ordinary shares at a price of 7 pence each. All payments due, in cash or shares, will be paid on completion of the Agreement.

ADM already holds a participating interest in OML 113 of 2.7% with corresponding profit interest and cost bearing interest of 5.0% and 6.7% respectively. Subject to Completion, ADM will acquire 25% of the interests, rights and obligations held by EER in the Block such that, on Completion, ADM's participating interest will increase to 5.0% with corresponding profit and cost bearing interests increasing to 9.2% and 12.3% respectively.

Details of the Fundraise
The Company has raised £672,500 before expenses at a price of 5.5 pence per share ("Placing Price"). The Placing Price equates to a 4 per cent. discount to the mid-market closing price of the Company's ordinary shares ("Ordinary Shares") on 24 August 2020 of 5.75p, being the last practicable date prior to the date of this announcement. The Fundraise comprises a placing of 4,045,453 new Ordinary Share ("Placing Shares"), a subscription for 4,545,454 new Ordinary Shares ("Subscription Shares") and an issue of debt of £200,000 ("Debt").

In connection with the Fundraise, the Company has issued 909,091 warrants to subscribe for Ordinary Shares at an exercise price of 5.5 pence per share as part of a consultancy agreement. In addition, the Company has issued 120,000 warrants to its lead broker Hybridan LLP ("Broker Warrants") to subscribe for Ordinary Shares at an exercise price of 5.5 pence per share.

Loan Facilities Agreement

The Company has entered into a definitive agreement with a consortium of investors (the "Lenders") to raise, in aggregate, £200,000 through unsecured loan facilities ("Loan Facilites"). The Loan, together with any interest which accrues at 10 per cent. per annum, is repayable in full on maturity on 15 August 2021 (the "Repayment Date") (except where the Lenders request part or all of the Loan and applicable costs and interest to be utilised in paying for the warrants granted to them at the time entering into the loan agreement).

Pursuant to the terms of the Loan Facilities, the Company has agreed to grant 3,636,364 warrants to subscribe for ordinary shares in the Company at an exercise price of 5.5 pence per share or the placing price of any subsequent fundraise during the term of the warrants to the Lenders, pro rata to the value of each loan (the "Warrants"). The Warrants may be exercised (subject to the requisite shareholder authorities being in place) and have a life of two years from the date of this announcement.

Directors' Subscriptions
As part of the Fundraise, ADM announces that certain Directors have agreed to subscribe for an aggregate 909,091 new Ordinary Shares at the Placing Price, comprising part of the Subscription Shares, raising approximately £50,000.

Following the Directors' subscriptions, their respective shareholdings will be as follows:

Debt Conversion
In addition, certain service providers have agreed to convert amounts due totalling £395,798 into 7,196,321 new Ordinary Shares ("Conversion Shares") at the Placing Price of 5.5 pence per share. The Conversion Shares will be subject to lock-in provisions of up to six months.

Related Party Transactions
The subscriptions by Peter Francis, Osa Okhomina, Richard Carter, Sir Henry Bellingham and Dr Stefan Liebing, and the amendment of the agreement with EER, are related party transactions pursuant to Rule 13 of the AIM Rules for Companies. With the exception of Peter Francis, Osa Okhomina, Richard Carter, Sir Henry Bellingham and Dr Stefan Liebing in respect of the subscriptions, and Osa Okhomina in respect of the amendement of the EER agreement, the directors of the Company consider, having consulted with the Company's nominated adviser, Cairn Financial Advisers LLP, that the terms of the transactions are fair and reasonable insofar as the Company's shareholders are concerned.

Admission to AIM, Total Voting Rights
Application will be made for the new ordinary shares, which total 15,787,228 and will rank pari passu with the Company's existing ordinary shares, to be admitted to trading on AIM ("Admission"). It is expected that Admission of the Shares will become effective and that dealings will commence at 8.00 a.m. on or around 2 September 2020.

Following Admission, the Company's enlarged issued share capital will comprise 92,404,133 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.

Enquiries:

Market Abuse Regulation (MAR) Disclosure

The notification below, made in accordance with the requirements of the EU Market Abuse Regulation, provides further detail.

Notification and public disclosure of transactions by persons discharging managerial responsibilities / person closely associated with them.
 

About ADM Energy PLC

ADM Energy PLC (AIM: ADME; BER and FSE: P4JC) is a natural resources investment company with an existing asset base in Nigeria. ADM Energy holds a 5% profit interest in the Aje Field, part of OML 113, which covers an area of 835km² offshore Nigeria, and in February 2020 entered into an agreement with EER (Colobos) Nigeria Limited to acquire a further 4.2% profit interest. 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, route to early cash flow and exploration upside.

Forward Looking Statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as "believe", "could", "should", "envisage'', "estimate", "intend", "may", "plan", "potentially", "expect", "will" or the negative of those, variations or comparable expressions, including references to assumptions. These forward looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.

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