TIDMADME
RNS Number : 5983N
ADM Energy PLC
30 September 2021
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.
30 September 2021
ADM Energy PLC
("ADM", the "Group" or the "Company")
Full Year Results
Publication of Annual Report
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 2020.
Investment Highlights - OML 113
-- Delivered strategic agreement with EER (Colobos) Nigeria
Limited to increase ADM's interest in the field - revenue interest
nearly doubled from 5% to 9.2% and ADM's share of net 2P reserves
increased from 8.9 MMboe to 16.4 MMboe
-- Worked closely with operating partners to safely manage the
impact of the pandemic and navigate the temporary low oil price
environment:
o Production from both the Aje-4 and Aje-5ST2 wells continued
uninterrupted aside from planned maintenance work, with oil stored
on the FPSO while prices recovered
o Reduced operating costs at a project level by 42% on average,
including a decrease in the FPSO lease cost
o Breakeven cost of production reduced to US$28 per barrel,
comfortably below the prevailing crude oil price - ensuring Aje
remained profitable at a project level
-- Total oil production in 2020 of 698,649 bbls and barrels of
oil per day of 1,909 bopd (99.2 bopd net to ADM(*) ). The drop in
volume reflected the decision by the JV partners to carry out a
more thorough and extended period of maintenance on the FPSO while
oil prices were depressed.
-- Post period, disposed of 188,778 shares in Superdielectrics
Ltd for a total consideration of GBP849,501, a profit of GBP656,003
on ADM's original investment
(*) Includes increase in revenue interest from 5% to 9.2% after
9 December 2020
Financial and Corporate Highlights
-- Revenue was GBP0.8m (2019: GBP2.5m), reflecting the decision
not to participate in the 13(th) lifting in March 2020, a lower oil
volume lifted from the FPSO as well as a lower realised oil price
during the period
-- Operating costs reduced by 42% to GBP1.4m (2019: GBP2.4m)
-- Loss before and after tax was GBP6.9m (2019: GBP1.7m)
-- Raised GBP0.85m for general working capital purposes and
issued additional short-term debt of GBP0.3 million. Post period,
in March 2021, the Group announced an equity fundraising of
approximately GBP1,220,000.
-- Signed an MOU with Trafigura Pte Ltd, the
multi-billion-dollar global trading house, for a strategic alliance
to develop investment opportunities in the African energy
sector
-- Strengthened the Board and technical team with industry expertise and high-level contacts
o Appointed Sir Henry Bellingham, former UK Government Minister
for Africa, and Dr Stefan Liebing, Chairman of the German-African
Business Association, as Non-executive Directors
o Post period, appointed Oliver Andrews, former Chief Investment
Officer at the Africa Finance Corporation, as Non-executive
Chairman
o Added two oil and gas veterans, Darrell McKenna and Dr
Satinder Purewal, to the technical team, and post-period Dr
Babatunde Pearse appointed Chief Engineer with responsibility to
oversee next phase of the Aje development
-- Dual listed on the Berlin and Frankfurt stock exchanges to
support growth and increase visibility to investors in Germany,
Europe's largest retail investment market
Osamede Okhomina, CEO of ADM Energy, said: "Despite the
challenges faced in 2020, I am pleased to report that ADM ended the
year with a solid foundation for future growth. The dramatic drop
in oil prices presented an opportunity to acquire attractive assets
at substantially depressed valuations, such as our increased
interest in OML 113. We nearly doubled our share of 2P reserves and
production from the Aje Field in advance of development plans to
significantly increase production by drilling new wells. This
provides a route to material value generation from our existing
asset base alone.
"We remain in the market for new opportunities to accelerate our
growth. Our management and technical teams are actively assessing
investment propositions on a regular basis and progressing those
that are most compelling. It remains a buyer's market and ADM is in
a strong position to de-risk projects through our technical
expertise and access to capital. We continue to pursue high-quality
assets in West Africa with substantial upside and the potential to
further accelerate our future growth."
Enquiries:
ADM Energy plc +44 20 7459 4718
Osamede Okhomina, CEO
www.admenergyplc.com
Cairn Financial Advisers LLP +44 20 7213 0880
(Nominated Adviser)
Jo Turner, James Caithie
Arden Partners plc +44 20 7614 5900
(Lead Broker)
Paul Shackleton
Hybridan LLP +44 20 3764 2341
(Joint Broker)
Claire Louise Noyce
ODDO BHF Corporates & Markets AG +49 69 920540
(Designated Sponsor)
Michael B. Thiriot
Luther Pendragon +44 20 7618 9100
(Financial PR)
Harry Chathli, Alexis Gore
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 oil producing Aje
Field, part of OML 113, which covers an area of 835km(2) 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.
Operating Review
ADM successfully met the challenges of 2020 by ensuring that its
operations continued in a safe and effective manner, while
positioning the business for growth. The Company's aim is to be a
multi-asset company with an interest in high-quality assets, which
offer the potential for material production upside. During the
year, ADM continued to execute on this strategy by acquiring
undervalued 2P reserves without the risks associated with high-cost
exploration. This included increasing the Company's interest in the
Aje Field, a producing asset with substantial potential in the near
and medium term.
ADM's technical expertise and access to capital put it in a
strong position to significantly de-risk the development of its
assets, thereby ensuring it unlocks their underlying potential and
creates value for shareholders.
Aje Field
The Aje Field on OML 113 offshore Nigeria is an oil producing
asset which is rich in gas and condensate reserves. It is
strategically located 24km offshore Lagos where it benefits from
increasing local energy demand, particularly for gas, which is
viewed as a replacement fuel for diesel and commands a premium. The
field is also within close proximity to the West African Gas
Pipeline which presents a potential opportunity for gas
monetisation in neighbouring countries such as Benin and Togo.
Completion of EER Transaction
ADM consolidated its interest in OML 113 during the financial
year and nearly doubled its reserves, net revenue, and production
share in the asset. The Group increased its revenue interest from
5% to 9.2% by acquiring 25% of the interest, rights, and
obligations held by EER (Colobos) Nigeria Limited ("EER"). This has
increased ADM's share of net 2P reserves from 8.9 MMboe to 16.4
MMboe.
Operations
ADM worked closely with the operating partners to safely manage
the impact of the pandemic and ensure that, aside from planned
maintenance work, production continued uninterrupted at Aje.
Oil Production:
2020 2019
Gross 698,649 bbls 890,203 bbls
------------- -------------
1,909 bopd 2,967 bopd
------------- -------------
Net* 36,295 bbls 44,405 bbls
------------- -------------
99.2 bopd 148bopd
------------- -------------
* Includes increase in revenue interest from 5% to 9.2% after 9
December 2020
Two liftings took place during 2020. Due to the prevailing low
oil price at the time, ADM elected to not participate in the 13(th)
lifting in March 2020, a decision that has been vindicated by the
recovery of brent crude to US$70+ per barrel. The Company
participated in the 14(th) lifting in October 2020, which totalled
557,091 barrels with a net share of 33,056 barrels to ADM. Post
period, the 15(th) lifting was completed in April 2021 for a total
of 225,000 barrels, equating to an increased net share to ADM of
27,675 barrels post completion of the EER transaction. The drop in
volume reflected the decision by the JV partners to carry out a
more thorough and extended period of maintenance on the FPSO while
oil prices were depressed.
The economic shutdowns imposed around the world in response to
COVID-19 precipitated a sudden drop in oil demand and severely
impacted crude prices. In light of the low oil price environment,
the partners successfully reduced operating costs at project level
by 42% on average, including a decrease in the FPSO lease cost. As
a result, the breakeven cost of production was reduced to US$28 per
barrel, comfortably below the prevailing crude oil price. This
ensured that Aje remained profitable at a project level, even
despite lower production volumes and crude oil prices. It also
provided a base for operational leverage as prices increased during
the year and post period, with production stored on the FPSO, which
has a storage capacity of up to 755,808 barrels.
An impairment of GBP4.6 million was recognised (2019: nil) on
our share of the Aje asset due to a change to a 'fair value'
implied by the purchase price (excluding contingent portion) of the
recently announced PetroNor E&P Ltd/Panoro Energy ASA
("Petronor/Panoro") transaction, which as at 31 December 2020 was
considered by the Directors to represent the most relevant and
reliable available indicator of value against a backdrop of market
and operation uncertainty prevalent at the time.
The Company has also recognised a Contingent Liability as per
note 22 of the Annual Report and Accounts published today, this is
to reflect an ongoing audit at project level on OML 113. ADM
expects the audit findings in the second half of 2021 which will
give the Company clarity going forward on project level debt.
Field Development Plan
The Partners are finalising discussions to reach a Final
Investment Decision on a new development plan at Aje. This process
will be supported by the appointment of Dr Babatunde Pearse as the
Company's new Chief Engineer. An industry veteran with an IOC
background, Dr Pearse has been appointed to plan the next phase of
the Aje development and oversee Front End Engineering Design
("FEED") studies to support the Final Investment Decision.
The development plan includes the drilling of three new wells,
which could potentially significantly increase production of oil
and gas liquids from 1,909 bopd in 2020 to up to 9,000 bopd
(approximately 900 barrels per day net to ADM). It will also
monetise the Dry Gas rich Aje field, where it has been estimated
there is over 1.1 trillion cubic feet ("Tcf") of Gas initially in
Place ("GIIP"). This is able to supply the Lagos market and can be
sold to the West Africa Gas Pipeline. The Partners continue to
explore various methods of financing, one of which is the US$100
million pre-offtake conditional pre-finance for approved projects
that the Company may access with Trafigura.
The development plan has been delayed as PetroNor and Panoro
Energy ASA agreed to a further extension of the completion long
stop date from 30 June 2021, due to challenges related to COVID-19,
for the previously announced purchase of Panoro's fully-owned
subsidiaries that hold 100% of the shares in Pan Petroleum Aje
Limited.
Financing and Pipeline
During the year, we signed an MoU with Trafigura Pte Ltd, the
multi-billion-dollar global trading house. The intention is to
create a strategic alliance where ADM will act as the sponsor for
investment opportunities, with Trafigura providing up to US$100
million in approved project finance as well as up to US$20 million
of convertible loan notes. We have engaged Trafigura on a number of
potential deals to date and maintain a strong relationship,
extending the agreement for a further 12 months post period.
Barracuda Field
Post period, we acquired a controlling interest in a Risk
Sharing Agreement (RSA) for the development of the large-scale
Barracuda Field. Located in OML 141, the Barracuda Field is an
existing discovery and near-term production asset, which covers 103
km2 in the swamp/shallow waters of the Niger Delta.
The Company announced in the period that it will commission a
Competent Person's Report ("CPR") on the Barracuda Field. ADM has
received a draft of a preliminary report however it is not yet
finalised pending further technical appraisal. Once finalised, ADM
will be in a better position to conclude the full CPR report as
well as its strategy for the Barracuda field.
Nigerian Marginal Field Bid Round
In September 2020, ADM submitted a bid with the Nigerian
Department of Petroleum Resources (DPR) for a marginal field in the
2020 Marginal Field Bid Round ("Bid Round"). A total of 57 marginal
fields are available to participating companies covering onshore,
swamp and shallow offshore fields. The process of awarding certain
fields commenced earlier this year and ADM remains in discussion
with multiple prospective partners. The Company will assess all
potential fields on their individual merits, however, in light of
attractive opportunities elsewhere, the Bid Round is no longer a
strategic priority.
Corporate
During the year, the Company successfully dual listed ADM shares
on the Berlin and Frankfurt stock exchanges. The move has increased
visibility to investors in Germany, Europe's largest retail
investment market.
ADM also strengthened its Board by adding further expertise and
contacts to oversee the Company's ambitious growth strategy. Lord
Henry Bellingham, the former UK Government Minister for Africa,
joined as a Non-Executive Director along with Dr Stefan Liebing,
Chairman of the prestigious German-African Business Association.
Lionel Therond also joined as Chief Financial Officer (a non-Board
role). Sergio Lopez stepped down as Non-executive Director to
pursue other interests.
Post period, the Company appointed Oliver Andrews as the new
Non-executive Chairman following the departure of Peter Francis due
to personal circumstances. Mr Andrews is the former Chief
Investment Officer at the Africa Finance Corporation, one of the
largest investment funds in Africa. Over the last 35 years, he has
overseen investments of approximately US$10 billion and originated
investments deals in natural resources and infrastructure across
the continent, worth US$100 billion.
In addition, ADM bolstered its technical team to advance the
Company's existing assets and evaluate new prospects. It enlisted
non-Board advisers, Darrell McKenna (Surface Facilities and
Drilling Lead) and Dr Satinder Purewal (Petroleum Engineering
Lead), and, post period, Dr Babatunde Pearse as Chief Engineer. All
three are industry experts with extensive experience in the world's
most prominent IOCs and field development projects. Dr Pearse is
primarily responsible for planning the next phase of the Aje
development and oversees FEED studies to support the Final
Investment Decision.
Financial Review
The financial results of the Group were negatively impacted by
lower oil prices due to the Covid crisis and lower lifting volume
due to maintenance activities on the FPSO. ADM also recognised an
impairment on the carrying value of its Aje asset. Nevertheless,
lower operating costs somewhat mitigated the revenue impact whilst
continued assessment of M&A opportunities provides a solid
foundation to build from in the future.
Revenue and profit
For the year ended 31 December 2020, the Group's revenue
decreased by 68% to GBP0.8 million (2019: GBP2.5 million). The
lower revenue reflects a lower oil volume lifted from the FPSO as
well as a lower realised oil price during the period.
Operating costs decreased by 42% to GBP1.4 million (2019: GBP2.4
million) as costs cutting initiatives were taken by the Aje
partnership to mitigate the impact of low oil prices.
However, administrative expenses increased by 52% to GBP2.6
million (2019: GBP1.7 million) as M&A evaluation activity
increased substantially.
An impairment of GBP4.6 million was recognised (2019: nil) on
the Company's share of the Aje asset due to a change to a 'fair
value' implied by the purchase price (excluding contingent portion)
of the recently announced Petronor/Panoro transaction, which as at
31 December 2020 was considered by the Directors to represent the
most relevant and reliable available indicator of value against a
backdrop of market and operation uncertainty prevalent as at 31
December 2020.
An unrealised gain of GBP0.7 million was recognised (2019: nil)
to reflect a 339% appreciation of the Group's minority stake in
Superdielectrics implied by their October 2020 equity raise since
the purchase of the Company's stake in 2017-2018. This gain was
realised post period end.
As a result, the loss after taxation increased to GBP6.9 million
(2019: GBP1.7 million loss). The Directors do not propose a
dividend (2019: GBPnil).
Cash flows and liquidity
After adjusting for the conversion of warrants issued in
settlement of fees and working capital movements, cash outflow from
operating activities decreased to GBP0.95 million (2019: GBP1.5
million outflow).
During the period, the Group raised additional equity of GBP0.85
million for general working capital purposes, and issued additional
short-term debt of GBP0.3 million.
As of 31 December 2020, the Group had cash and cash equivalents
of GBP30,000 (31 December 2019: GBP15,000).
Post period, in March 2021, the Group announced an equity
fundraising of approximately GBP1,220,000.
Outlook
ADM's existing asset base provides exposure to large-scale 2P
reserves and a route to material production upside. The Company
remains confident of the commercial viability of further
development at Aje and will continue to engage proactively with the
other partners to progress the Field Development Plan. The FEED
studies to be overseen by Chief Engineer Dr Pearse will define the
project requirements for detailed engineering, procurement, and
construction of facilities to support the Final Investment
Decision.
These projects provide a strong base from which to grow the
business through additional acquisitions. With many IOCs embarking
on large-scale divestment programmes, it remains a buyer's market
and a market primarily funded by the International Trading
Companies, and thus with Trafigura's support ADM is in an even
stronger position. Added to this is ADM's ability to de-risk
projects through the Company's technical expertise and access to
the broader capital markets. In line with the Company's investment
strategy, ADM continues to seek high-quality assets in West Africa
at depressed valuations with substantial upside for
shareholders.
Annual Report and Accounts
The Company's Annual Report and Accounts will be posted shortly
to shareholders and will be made available on the Company's
investor relations website at www.admenergyplc.com .
Group Income Statement and Statement of Comprehensive Income
For the year ended 31 December 2020
2020 2019
GBP'000 GBP'000
Continuing operations
Revenue 799 2,519
Operating costs (1,423) (2,444)
Administrative expenses (2,616) (1,721)
Impairment of investment (4,628) -
Consultancy fee income 353 -
Operating loss (7,515) (1,646)
Movement in fair value of investments 678 -
Finance costs (67) (27)
Loss on ordinary activities before taxation (6,904) (1,673)
Taxation - -
Loss for the year (6,904) (1,673)
---------------------------------------------- -------- --------
Other Comprehensive income:
Exchange translation movement (233) (272)
---------------------------------------------- -------- --------
Total comprehensive income for the year (7,137) (1,945)
---------------------------------------------- -------- --------
Basic and diluted loss per share:
From continuing and total operations (8.7)p (3.8)p
Group and Company Statements of Financial Position
as at 31 December 2020
GROUP COMPANY
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- --------- --------- --------- ---------
NON-CURRENT ASSETS
Intangible assets 16,007 15,708 - -
Investment in subsidiaries - - 12,316 14,983
16,007 15,708 12,316 14,983
---------------------------------- --------- --------- --------- ---------
CURRENT ASSETS
Investments held for trading 878 200 878 200
Inventory 32 - - -
Trade and other receivables 109 562 109 562
Cash and cash equivalents 30 15 30 15
----------------------------------- --------- --------- --------- ---------
1,049 777 1,017 777
---------------------------------- --------- --------- --------- ---------
CURRENT LIABILITIES
Trade and other payables 4,206 1,555 1,429 1,331
Convertible loans 235 - 235 -
4,441 1,555 1,664 1,331
---------------------------------- --------- --------- --------- ---------
NET CURRENT LIABILITIES (3,392) (778) (647) (554)
NON-CURRENT LIABILITIES
Convertible loans 284 - 284 -
Other borrowings 297 - 297 -
Decommissioning provision 1,032 - - -
---------------------------------- --------- --------- --------- ---------
1,613 - 581 -
---------------------------------- --------- --------- --------- ---------
NET ASSETS 11,002 14,930 11,088 14,429
----------------------------------- --------- --------- --------- ---------
EQUITY
Share capital 9,450 8,817 9,450 8,817
Share premium 36,591 34,012 36,591 34,012
Other reserves 817 870 817 870
Currency translation reserve (850) (617) - -
Retained deficit (35,006) (28,152) (35,770) (29,270)
----------------------------------- --------- --------- --------- ---------
Equity attributable to owners
of the Company and total equity 11,002 14,930 11,088 14,429
----------------------------------- --------- --------- --------- ---------
Group Statement of Changes in Equity
For the year ended 31 December 2020
Exchange
Share Share translation Retained Total
capital premium reserve Other reserves deficit equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------- -------- ------------ -------------- -------- -------
At 1 January 2019 8,499 32,833 (345) 955 (27,034) 14,908
Loss for the year - - - - (1,673) (1,673)
Exchange translation
movement - - (272) - - (272)
-------------------------------- -------- -------- ------------ -------------- -------- -------
Total comprehensive
expense for the year - - (272) - (1,673) (1,945)
-------------------------------- -------- -------- ------------ -------------- -------- -------
Issue of new shares 318 1,322 - 449 - 2,089
Share issue costs - (143) - 21 - (122)
Share options lapsed - - - (172) 172 -
Share warrants lapsed/cancelled - - - (383) 383 -
-------------------------------- -------- -------- ------------ -------------- -------- -------
At 31 December 2019 8,817 34,012 (617) 870 (28,152) 14,930
Loss for the year - - - - (6,904) (6,904)
Exchange translation
movement - - (233) - - (233)
-------------------------------- -------- -------- ------------ -------------- -------- -------
Total comprehensive
expense for the year - - (233) - (6,904) (7,137)
-------------------------------- -------- -------- ------------ -------------- -------- -------
Issue of new shares 633 2,544 - (134) - 3,043
Share issue costs - (21) - - - (21)
Issue of convertible
loans - - - 17 - 17
Warrants issued in
settlement of fees - - - 170 - 170
Warrants exercised - 56 - (106) 50 -
At 31 December 2020 9,450 36,591 (850) 817 (35,006) 11,002
-------------------------------- -------- -------- ------------ -------------- -------- -------
Company Statement of Changes in Equity
For the year ended 31 December 2020
Share Share Retained Total
capital premium Other reserves deficit equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------- -------- -------------- -------- -------
At 1 January 2019 8,499 32,833 955 (28,208) 14,079
Loss for the period and
total comprehensive expense - - - (1,617) (1,617)
-------------------------------- -------- -------- -------------- -------- -------
Issue of new shares 318 1,322 449 - 2,089
Share issue costs - (143) 21 - (122)
Share options lapsed - - (172) 172 -
Share warrants lapsed/cancelled - - (383) 383 -
At 31 December 2019 8,817 34,012 870 (29,270) 14,429
-------------------------------- -------- -------- -------------- -------- -------
Loss for the period and
total comprehensive expense - - - (6,550) (6,550)
-------------------------------- -------- -------- -------------- -------- -------
Issue of new shares 633 2,544 (134) - 3,043
Share issue costs - (21) - - (21)
Issue of convertible loans - - 17 - 17
Warrants issued in settlement
of fees - - 170 - 170
Warrants exercised - 56 (106) 50 -
At 31 December 2020 9,450 36,591 817 (35,770) 11,088
-------------------------------- -------- -------- -------------- -------- -------
Group and Company Statements of cash flows
For the year ended 31 December 2020
GROUP COMPANY
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- -------- -------- --------
OPERATING ACTIVITIES
Loss for the period (6,904) (1,673) (6,550) (1,617)
Adjustments for:
Fair value adjustment to investments (678) - (678) -
Warrants issued in settlement
of fees 170 - 170 -
Finance costs 67 27 67 27
Impairment of intangible assets 4,628 4,996
Depreciation and amortisation 85 112 - -
Operating cashflow before working
capital changes (2,632) (1,534) (1,995) (1,590)
Increase in inventories (32) - - -
Decrease/(increase) in receivables 303 (383) 303 (383)
Increase/(decrease) in trade
and other payables 1,410 (115) 783 200
---------------------------------------- -------- -------- -------- --------
Net cash outflow from operating
activities (951) (2,032) (909) (1,773)
---------------------------------------- -------- -------- -------- --------
INVESTMENT ACTIVITIES
Development costs (181) - - -
Loans to subsidiary operation - - (181) (245)
Net cash outflow from investment
activities (181) - (181) (245)
---------------------------------------- -------- -------- -------- --------
FINANCING ACTIVITIES
Continuing operations:
Issue of ordinary share capital 848 1,939 848 1,939
Share issue costs (21) (122) (21) (122)
Proceeds from short term loans 278 - 278 -
Net cash inflow from financing
activities 1,105 1,817 1,105 1,817
---------------------------------------- -------- -------- -------- --------
Net (decrease)/increase in cash
and cash equivalents from continuing
and total operations (27) (215) 15 (201)
Exchange translation difference 42 14 - -
Cash and cash equivalents at
beginning of period 15 216 15 216
C ash and cash equivalents at
end of period 30 15 30 15
---------------------------------------- -------- -------- -------- --------
Notes to the Financial Statements
For the year ended 31 December 2020
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 is an investment company, mainly
investing in natural resources and oil and gas projects. The
registered office of the Company is as detailed in the Company
Information on page 2.
The information included in this announcement has been extracted
from the Company's report and accounts and, therefore, as
references and page numbers may be incorrect. Shareholders should
read the Company's report and accounts in full which can be found
on its website.
2. Principal Accounting Policies
The principal accounting policies adopted in the preparation of
these financial statements are set out in the full report and
accounts which is available from the Company's website,
www.admenergyplc.com. These policies have been consistently applied
throughout all periods presented in the financial statements.
As in prior periods, the Group financial statements have been
prepared in accordance with International Accounting Standards and
interpretations issued by the International Accounting Standards
Board (IASB) International Financial Reporting Standards (IFRS) as
adopted by the European Union. 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 2020. The comparative figures relate to the
year ended 31 December 2019. The financial statements are presented
in pounds sterling (GBP) 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 commencing 1
January 2020:
-- Prepayment Features with Negative Compensation - Amendments to IFRS 9;
-- Annual Improvements to IFRS Standards 2015-2017 Cycle;
-- Plan Amendments, Curtailment or Settlement - Amendments to IAS 19;
There are several standards, amendments to standards and
interpretations which have been issued by the IASB that are
effective in future accounting periods that the Group has not yet
adopted. The most significant of these are as follows, which are
all effective for the period beginning 1 January 2021:
A number of new standards and amendments to standards and
interpretations are effective for annual periods beginning after 1
January 2020 and have not been applied in preparing these financial
statements. None of these are expected to have a significant effect
on the financial statements of the Company.
The amendments listed above did not have any impact on the
amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.
New standards and interpretations not yet adopted
A number of new standards and amendments to standards and
interpretations are effective for annual periods beginning after 1
January 2020 and have not been applied in preparing these financial
statements. None of these are expected to have a significant effect
on the financial statements of the Company.
There are no other IFRSs or IFRIC interpretations that are not
yet effective that would be expected to have a material impact on
the Company.
3. Going Concern
At 31 December 2020, the Group recorded a loss for the year of
GBP6,904,000 and had net current liabilities of GBP3,392,000, after
allowing for cash balances of GBP30,000.
Since the year end, the Group has raised additional equity
funding of GBP1,220,000 and realised GBP850,000 from the sale of
investments to provide for working capital requirements, and the
Directors have prepared cashflow forecasts for the period to 30
September 2022 to assess whether the use of the going concern basis
for the preparation of the financial statements is appropriate. In
the short term, the Group will require further additional funding
in order to meet its liabilities as they fall due and continue to
operate as a going concern. The Directors have taken into
consideration the level and timing of the Group's working capital
requirements (which takes into account recent reductions in costs
and control of discretionary spending to preserve cash flow) and
has also considered the likelihood of successfully securing funding
to meet these needs. In particular, consideration has been given to
ongoing discussions around further third-party investment and the
extent to which these discussions are advanced both in respect of
short and longer term funding. The Directors acknowledge that while
they have an expectation that funding will be secured based on this
assessment, at the date of approval of these financial statements,
no such funding has been unconditionally committed. Therefore,
while the Directors have a reasonable expectation that the Group
has the ability to raise the additional finance required in order
to continue in operational existence for the foreseeable future,
the uncertainty surrounding the ability and likely timing of
securing such finance indicates that a material uncertainty exists
that may cast significant doubt on the Group's ability to continue
as a going concern. Were no such funding to be secured, the Group
would have no realistic alternative but to halt operations and
prepare its financial statements on a non-going concern basis.
4. Earnings and Net Asset Value Per Share
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.
2020 2019
GBP'000 GBP'000
----------------------------------------------------- ----------- -----------
Loss attributable to owners of the Group
- Continuing operations (6,904) (1,673)
------------------------------------------------------ ----------- -----------
Continuing and discontinued operations (6,904) (1,673)
------------------------------------------------------ ----------- -----------
2020 2019
Weighted average number of shares for calculating
basic and fully diluted earnings per share 79,594,655 44,280,670
------------------------------------------------------ ----------- -----------
2020 2019
pence pence
----------------------------------------------------- ----------- -----------
Earnings per share:
Loss per share from continuing and total operations (8.7) (3.8)
------------------------------------------------------ ----------- -----------
The weighted average number of shares used for calculating the
diluted loss per share for 2020 and 2019 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.
2020 2019
GBP'000 GBP'000
---------------------------------------------- ------------ -----------
Total net assets of the Group 11,002 14,930
Cost of exercise of warrants 1,715 1,261
----------------------------------------------- ------------ -----------
Total net assets for calculation of
fully diluted NAV 12,717 16,191
----------------------------------------------- ------------ -----------
2020 2019
Number of shares in issue at the reporting
date 122,769,073 59,501,210
Number of extant warrants (see note
below) 27,726,241 18,801,601
----------------------------------------------- ------------ -----------
Total number of shares for calculation
of fully diluted NAV 150,594,655 78,302,811
----------------------------------------------- ------------ -----------
2020 2019
---------------------------------------------- ------------ -----------
NAV - Basic (pence per share) 9.0p 25.1p
----------------------------------------------- ------------ -----------
NAV - Fully diluted (pence per share) 8.5p 20.7p
----------------------------------------------- ------------ -----------
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