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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