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ADM Energy agrees project-originating deal with Trafigura

For any projects that Trafigura gives the green light, the Singapore-headquartered trader will then provide ADM with pre-financing of up to US$100mln to acquire or develop the assets

ADM Energy Plc -

ADM Energy Plc (LON:ADME) shares surged on Monday morning after it struck a deal with commodities trader Trafigura to find potential deals in the African energy sector.

If the planned “strategic alliance” is formed, AIM-listed ADM will be in charge of “originating, analysing, developing, structuring and negotiating” potential projects with other parties and then will present them to Trafigura for “further evaluation”.

READ: ADM Energy lays out acquisitive strategy for “aggressive growth” in Nigeria's oil industry

For any projects that Trafigura gives the green light to, the Dutch commodities trader will then provide ADM with pre-financing of up to US$100mln to acquire or develop the assets.

Specific agreements will be negotiated for any agreed projects, with both companies working to arrange any necessary debt and equity funding, while Trafigura will have exclusive rights to market whatever crude oil is produced.

Osamede Okhomina, chief executive of ADM said: “I have enjoyed a long relationship with Trafigura and this memorandum of understanding is an endorsement of the company's strategy, signalling a new stage of development for ADM.

“We have identified a number of excellent investment opportunities in Nigeria and West Africa. With our extensive network, and the potential access to capital this MOU gives to ADM, we believe the company is well-positioned to capture future opportunities,” he added.

Trafigura’s head of Africa energy trading, James Josling said: “Today's signing shows our intention to work with an upstream investing company that has strong roots in Nigeria and West Africa, and is well placed to develop its potential while being committed to practicing good corporate governance as evidenced by ADM's London quotation.”

In early morning trade, ADM shares were 17.3% higher at 4.75p.

Quick facts: ADM Energy PLC

Price: 3.925 GBX

Market: AIM
Market Cap: £2.92 m


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