ADM Energy Announces Energy Technology Investment

Source: 11/29/2023, Location: North America

ADM Energy PLC (ADME; BER and FSE: P4JC), a natural-resources investing company, is pleased to announce that, in line with its Investing Policy and its announcement of 14 November 2023, it has made a further investment in an energy technology company focused on providing technology solutions to the upstream sector of the U.S. oil and gas business.

- Acquisition of approximately 53.1% economic interest in OFX Technologies, LLC ("OFXT") 100% owner of Efficient Oilfield Solutions, LLC, a revenue generative, technology company focused on delivering technology solutions that increase efficiency, lower costs and aid in the management of regulatory requirements of the U.S. upstream oil and gas industry ("the Investment")
- Total Maximum Consideration of US$1,285,000 comprised of the issue of 86,035,489 new ordinary shares at 1p each; 39,959,017 3-year, 1p warrants and US$235,000 in cash.
- The Total Maximum Consideration implies a value of OFXT of approximately US$2.3 million or 4.5x the annualised monthly recurring revenue target of OFXT for the end of Q1 2024.
- This oilfield technology investment positions the Company to take advantage of the rapid growth in technology spending by the upstream industry. Barclays cited in an article from in April 2023 estimated upstream technology spending at US$30 billion by 2025, up over 6x from 2020 levels.
- Subscription of US$225,000 of the amended Secured Convertible Loan Notes (as announced on 14 November 2023) and US$10,000 previously funded by the Company will fully fund the Company's cash commitments associated with the investment.
- The investment is consistent with the mandate of new non-executive Chairman Lord Henry Bellingham to position ADM with investments focused on technologies related to the energy industry in addition to the more traditional investments in oil and gas production that the Company has historically pursued.

Investment Summary
The Company has acquired 650,000 Class A Units of OFXT from OFX Holdings, LLC ("OFXH"), a substantial shareholder of the Company. In addition, the Company acquired 150,000 Class A Units in OXFT from parties unrelated to OFXH and directly subscribed for 120,000 Class A Units and 200,000 Class B Units from OFXT (together "the Transactions").

The result of the Transactions is that ADME, upon completion, will hold 920,000 Class A Units and 200,000 Class B Units of OFXT representing approximately 53.1% of the economic interest of OFXT.

Total consideration for the investments is US$1,285,000 comprised of (i) the issue of 86,035,489 new ordinary shares at a price of 1p per share (the "Consideration Shares"); (ii) US$235,000 in cash and (iii) 39,959,018 3-year, 1p warrants. The Company has the option, at its sole discretion, to purchase an additional 100,000 Class A Units at US$1.50 per Unit or US$150,000 on or before February 28, 2024. Additionally, ADM will issue a total of 16 million incentive warrants to the management team and other key persons of OFXT (the "Incentive Warrants").

Of the Total consideration associated with the investment, US$975,000 is to be paid to OFXH, a substantial shareholder of the Company. OFXH will be issued 79,918,033 ordinary shares and 39,959,018 3-year, 1p warrants. Adjusted for the issuance of shares to OFXH, OFXH will hold 82,469,367 ordinary shares representing 17% of the enlarged share capital of the Company.

Concurrent with the oilfield technology investment, ADM has accepted a subscription for US$225,000 gross proceeds of its amended 15% secured convertible loan notes with an equity conversion price of 1p per share. The Secured Convertible Loan Notes will only be issued upon funding and the proceeds will be used to fund the Company's cash commitments associated with the OFXT investment. No commissions or fees were paid in relation to the subscription which will result in net proceeds to the Company of US$235,000.

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