5 June 2026
ADM Energy PLC
("ADM" or the "Company")
Further re: Joint Venture Agreement to Acquire Oil and Gas Assets
and Issue of Warrants
ADM Energy PLC (AIM: ADME; BER and FSE: P4JC) a natural resource investing
company provides the following updates with respect to Vega Upstream JV, LLC
("Vega Upstream JV"), a joint venture company formed by Covenant Oil Group
Corporation ("COG") and the Company, and the Midcon Acquisition announced on 29
April 2026.
Following the completion of the Placing announced on 1 May 2026, the Company
made an additional investment of US$200,000 in Vega Upstream JV (a cumulative
investment to date of US$300,000) resulting in an increase in its economic
interest from 10.0% to 25%. The increased economic increase is expected to
result in an increase in average monthly revenue to the Company from US$72,400
to US$96,000 per month over the next 12 months, based on the Haas' Report.
· Vega Upstream JV has entered into an amendment to the original Stock and
Membership Interest Purchase Agreement dated 22 April 2026, pursuant to which
the closing date has been extended to 26 June 2026. On execution of the
amendment, Vega Upstream JV has made an additional deposit of US$250,000.
· Vega Upstream JV has entered into a term sheet with an institutional lender
for debt finance and made a deposit of US$200,000 associated therewith to fund
lender legal and due diligence costs associated therewith.
· Combined with the original deposit of US$500,000 previously announced, Vega
Upstream JV has now funded a total of US$950,000 in deposits associated with the
Midcon Acquisition.
Related Party Transaction
The participation of Covenant Oil and Gas, LLC a company owned and controlled by
Claudio Coltellini in the joint venture Vega Upstream JV, LLC, constitutes a
related party transaction for the purposes of Rule 13 of the AIM Rules, by
virtue of Claudio Coltellini being a Director of the Company. With the
exception of Claudio Coltellini, the Directors of the Company, Randall Connally,
Lord Henry Bellingham and Dr. Stefan Liebing consider, having consulted with its
nominated adviser, Cairn Financial Advisers LLP, that the terms of the
transaction are fair and reasonable insofar as its shareholders are concerned.
Regarding the Midcon Acquisition, Executive Director, Randall J. Connally,
stated:
"We continue working to complete this transformational acquisition while
planning a work program we plan to implement immediately. I am increasingly
excited about opportunities to increase production, lower costs and leverage the
assets to create new streams of revenue and cash flow."
The Midcon Assets
i. Operated Upstream Assets
Working interest of an average of 49.4% in 28 operated natural gas, NGL and oil
wells located in Custer County, Oklahoma, together with a defined portfolio of
58 horizontal drilling locations, of which approximately 72.0% are attributable
to the operated assets. Comprising recent net production of c. 3.2 mmcfe/d (533
BOE/d) and approximately 58% of revenue from crude oil and liquids.
ii. Non-Operated Upstream Assets
Working and/or overriding royalty interest of an average of 3.9% in
approximately 250 non-operated natural gas, NGL and oil wells located across
multiple counties in Oklahoma.
iii. Midstream Assets
A natural gas gathering system transporting c. 4.4 mmcf/d of natural gas
produced by the Midcon Assets and eight other area producers to the sales point
covering approximately four-square miles. A toll of $0.74 per Mcf together with
approximately 160 acres of associated surface land supporting current and future
operations.
Investment and Participation of the Company in Vega Upstream JV
ADM has funded approximately US$300,000 as a capital contribution to and will
have the following asset, membership (equity) and voting interest in Vega
Upstream JV:
Voting
Capital Asset Membership
Member Contribution Interest Interest Interest
ADM US$300,000 25.0% 50.0% 50.0%
Covenant Oil US$900,000 75.0% 50.0% 50.0%
Group
Corporation
Total US$1,200,000 100.0% 100.0% 100.0%
The asset interest reflects the interest of each party in the underlying Midcon
Assets. The membership and voting interest reflect the interest of each party
in the economics and governance of Vega Upstream JV.
Pursuant to the agreement with Vega Upstream JV, the Company has the right to
increase its asset interest in Vega Upstream JV up to 35%.
Summary of Budgeted Revenue Impact to the Company
Based on the Haas report made available to the Company, ADM's increased 25.0%
asset interest in the Midcon Assets[(1)], the ASA and ownership of Vega Upstream
JV, the directors of the Company are budgeting approximately US$96,000 per month
in revenue from its interest in the Midcon Assets and Vega Upstream JV over the
next twelve months (based on prevailing commodity prices[(2)]):
[][]
As Structured
Source of Revenue: Interest Revenue
Midcon Assets 25% $49,740
Vega Upstream JV[(3)] 50% $36,000
Acquisition Fee Payments 100% $10,000
Total[(4)] --- $95,740
1. Assuming exercise by Electric Guitar PLC ("ELEG") of the ELEG Option
described in more detail in the RNS of 29 April 2026.
2. Based on (i) WTI Crude Oil Prices of $78.14 per barrel and (ii) natural gas
prices of $3.42 per mcf.
3. Includes terms of Administrative Services Agreement and proportionate share
of profits expected from ownership of regulatory operator.
4. The above does not include any revenue that Eco Oil may earn from the
provision of services to Vega Upstream JV associated with the operation of the
Midcon Assets.
Issue of Warrants
Further to the fundraise announced on 1 May 2026, and pursuant to the terms of a
warrant instrument dated June 2021 (the "Instrument"), the Company has cancelled
150,000,000 warrants over ordinary shares in the Company, each with an exercise
price of 0.1 pence per ordinary share ("Old Warrants"), and has subsequently
issued 375,000,000 new warrants over ordinary shares in the Company, each with
an exercise price of 0.02 pence per ordinary share ("New Warrants"), to a
certain existing shareholder of the Company.
The New Warrants have been issued in replacement for, and conditional upon the
cancellation of, the Old Warrants. Accordingly, the Old Warrants can no longer
be exercised.
The New Warrants have the same exercise period as the Old Warrants and will
expire on 31 August 2031. Save for the number of warrants and exercise price,
the New Warrants are issued on substantially the same terms as the Old Warrants.
If exercised in full, the New Warrants would result in the issue of 375,000,000
new ordinary shares, representing approximately 7.80 per cent. of the Company's
existing issued ordinary share capital and approximately 7.24 per cent. of the
Company's enlarged issued ordinary share capital, and would provide the Company
with gross proceeds of £75,000.
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European
Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this announcement
via Regulatory Information Service ('RIS'), this inside information is now
considered to be in the public domain.
Enquiries:
ADM Energy plc +1 214 675 7579
Randall Connally, Executive Director
www.admenergyplc.com
Cairn Financial Advisers LLP +44 (0) 20 7213 0880
(Nominated Adviser)
Jo Turner, Liam Murray
Capital Plus Partners Limited +44 (0) 20 7432 0501
(Broker)
Jonathan Critchley
About ADM Energy PLC
ADM Energy PLC (AIM: ADME; BER and FSE: P4JC) is a natural resources investing
company with investments including a 100.0% ownership interest in Vega Oil and
Gas, LLC; a 60% economic interest in Eco Oil; a 42% economic interest in OFX
Technologies, LLC (www.ofxtechnologies.com); a 10% asset interest in Vega
Upstream JV, a business established to identify and coordinate investment
opportunities in US onshore oil and gas assets; and a 9.2% profit interest in
the Aje Field, part of OML 113, which covers an area of 835km² offshore Nigeria.
Aje has multiple oil, gas, and gas condensate reservoirs in the Turonian,
Cenomanian and Albian sandstones with five wells drilled to date.
Forward Looking Statements
Certain statements in this announcement are, or may be deemed to be, forward
-looking statements. Forward looking statements are identified by their use of
terms and phrases such as "believe", "could", "should", "envisage'', "estimate",
"intend", "may", "plan", "potentially", "expect", "will" or the negative of
those, variations or comparable expressions, including references to
assumptions. These forward-looking statements are not based on historical facts
but rather on the Directors' current expectations and assumptions regarding the
Company's future growth, results of operations, performance, future capital and
other expenditures (including the amount, nature and sources of funding
thereof), competitive advantages, business prospects and opportunities. Such
forward-looking statements reflect the Directors' current beliefs and
assumptions and are based on information currently available to the Directors.
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