It will allow the company to satisfy the £500,000 cash payment in the agreed acquisition from EER, giving the company an additional 2.25% interest in OML 113 taking its stake to 5%, while the ‘profit interest’ increases to 9.2% from 5%.
"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,” said Osamede Okhomina, ADM chief executive.
He added: “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."
The fundraise comprises £472,500 raised in a share placing and subscription and the execution of loan facilities of £200,000. Additionally, there was £395,798 of conversions by ADM’s convertible debt holders.
The placing sees a total of 8.59mln new shares sold at a price of 5.5p each. Five ADM directors including chief executive Osa Okhomina and chairman Peter Francis participated in the placing taking a total of 909,091 shares.
Alongside the fundraise, the company has agreed with EER that a greater portion of the deal consideration can be paid in shares.
In the original deal, struck in February, it was envisaged that ADM would pay US$1mln of cash and the equivalent of US$2mln in shares. Now, EER has agreed to receive the outstanding US$250,000 cash payment in shares.
ADM paid a US$250,000 cash deposit in February and will pay US$500,000 upon closing today’s funding, and subsequently, US$2.25mln of shares will be issued to EER – of that, US$250,000 will be priced in line with the placing, at 5.5p, and the original US$2mln share consideration will be priced at 7p per share.