Alongside the AIM-listed company’s results for the past calendar year, ADM's chief executive Osamede Okhomina said 2019 “was an important year to lay the foundation for our growth strategy”, where the group is focused on adding highly accretive proved and probable (2P) reserves assets in West Africa on top of its stake in the producing asset at the Aje field offshore Nigeria.
The company has a 5% revenue interest in the OML 113 licence area, 24km offshore Lagos, Nigeria, where the Aje field produces oil at a stable rate from two wells at a combined 2,967 barrels of oil per day (bopd) average, of which 148 bopd is net to ADM.
Okhomina this year struck a deal to boost ADM’s interest to 9.2%, which is expected to significantly increase its net 2P reserves from 8.9mln barrels of oil equivalent (MMboe) to 16.4 MMboe when the deal completes around the third quarter of 2020.
Cost cuts were recently agreed for Aje and there are early-stage development plans aimed at tripling production to 9,000 bpd.
"COVID-19 has undoubtedly had a big impact on global markets, but as economies re-open around the world we are beginning to see an upturn in oil prices from previous lows, our strategy firmly remains to increase 2P reserves and production, ADM is well-positioned to take advantage of the recovery,” said Okhomina, who was appointed in July last year.
“Furthermore, as upstream majors continue to seek exit strategies in West Africa, greater opportunities are emerging at low and attractive valuations, even more so in the current macro environment.”
With ADM shares recently admitted to trading on the Frankfurt and Berlin Stock Exchanges, he said this should further increase the visibility of ADM Energy's shares in continental Europe and enable the company to build relationships with a wider group of new investors as well as its AIM core.
Results for 2019 showed revenue fall to £2.5mln from £3.1mln and the loss before tax increased to £1.7mln from £1mln.
As of June 12 2020, the group had cash and cash equivalents of £200,000 with access to a further £100,000 from a new loan facility.