("ADM" or the "Company")
Final Results and Publication of Annual Report
The Company will be publishing its Annual Report and Accounts, which will be made available on the Company's website at www.admenergyplc.com and are being sent to Shareholders.
Extracts from the audited full year results can be found below.
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
Enquiries:
ADM Energy plc +1 214 675 7579
Randall Connally , Chief Executive Officer
www.admenergyplc.comCairn Financial Advisers LLP +44 207 213 0880
(Nominated Adviser)
Jo Turner / Liam Murray / Ed Downes AlbR Capital Limited +44 207 399 9400
(Broker)
Gavin Burnell / Colin Rowbury ODDO BHF Corporates & Markets AG +49 69 920540
(Designated Sponsor, Frankfurt Stock Exchange )
Michael B. Thiriot
About
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.
Non-executive Chairman’s Statement
Dear Stakeholders,
During 2024 the Board continued the ground up rebuilding of
building a portfolio oil and gas productive and cash generative investments in the
industry. Consistent with our Chairman’s macro view of world energy requirements and continued appetite for oil and gas production, the Company believes that establishing a portfolio positioned accordingly will create long-term and sustainable value for shareholders.
The investment thesis around which the Board is rebuilding the Company is based on the premise that production, specifically oil production in major
The Board believes that the major implications of a coming peak or plateau (and eventual decline) in shale production is that the onshore focus of the
Our Upstream Strategy therefore is to position the Company with a portfolio consisting of select core areas within
We believe certain trends in the global economy and, in particular
In its 2025 Global Outlook, Exxon Mobil Corporation estimates that the annual, natural production decline rate in the world’s legacy oil fields is approaching 15% per annum. This amounts to ca. 15 million barrels per day of production that the global oil industry will have to replace just to maintain current production levels of ca. 100 million barrels per day.
Yet, world demand for crude oil continues to grow. While the energy transition continues globally, British energy giant bp – in its 2025 Outlook - estimates that demand for oil continues to grow (since 2019) at a rate of 600,000 barrels per day per annum with growth in demand driven by emerging economies and declining transportation demand in developed economies significantly offset by rising demand from the petrochemical sector.
Continued acceleration of generative AI and data centre development in the
Together with oil and gas friendly policies of the current
Lord
Non-Executive Chairman
Independent Auditor Report
To the Shareholders of
For the year ended
Qualified Opinion
In our opinion, except for the effects of the matter described in the Basis for qualified opinion section:
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at
•
the Group financial statements have been properly prepared in accordance with
•
the Parent Company financial statements have been properly prepared in accordance with
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of
Basis for qualified opinion
Included within other creditors, is an amount owed to the operator of the Group’s working interest in the an oil and gas block in
We conducted our audit in accordance with International Standards on Auditing (
Independence
We remain independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the
Material uncertainty relating to going concern
We draw attention to note 2 in the financial statements, which explains that the ability of the Group and Company to continue as a going concern is dependent on raising the necessary funds to service its ongoing working capital requirements as established in the cash flow forecast. At the date of signing these financial statements, there is no guarantee that the funding to meet the Group’s and Company’s obligations will be secured. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the ability of the Group and Company to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business.
For the reason set out above and based on our risk assessment, we determined going concern to be a key audit matter. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. This conclusion is reached based on acceptable levels of audit assurance gained from the following procedures:
•
Obtaining the Directors cash flow forecasts for the period to
• Considered the accuracy of forecasts produced by management by reference to key assumptions made, as well as identifying specific elements of the forecasts that are critical for demonstrating that the business remains a going concern, taking into account variances that arose;
• Evaluating different scenarios based on the identified sensitivities within the forecasted model to identify the potential funding need that exists within the going concern period;
• Testing the mechanical integrity of the forecast model prepared by management by checking the accuracy and completeness of the model, including challenging the appropriateness of estimates and assumptions with reference to empirical data and external evidence;
• Considered the trends of key commodity prices in the financial year and in the period up to the date of the approval of these financial statements;
• Considered the viability of the mitigating factors available to management to be able to raise the necessary funds within the going concern period;
• Given the period of time between the date of the statement of financial position and the date of approval of these financial statements, we assessed the following:
o The bridge performed by management of the group financial position as at 31December 2025 which included specific consideration of the liability and cash positions being used in the forecasts; o Obtained and inspected letters from certain stakeholders confirming that they will not recall their short term debt for immediate repayment within the going concern period; and o Holding discussions with key creditors of the company to understand a restriction on use of funds available within the group for use at the parent company level.
•
We inspected a letter of support from a key shareholder,
• Reviewed the adequacy and completeness of the disclosure included within the financial statements in respect of going concern.
Our responsibilities and the responsibility of the directors with respect to going concern are described in the relevant sections of the report.
Overview
________________________________________________________________________ | | ||2024 | |Key audit matters| || | | | ||£’000| |_________________|_______________________________________________||_____| | |Carrying value of intangible assets* ||519 | | | || | | |Carrying value of proved and developed assets *||754 | | | || | | |Going concern* ||N/A | |_________________|_______________________________________________||_____|
__________________________________________________________ | |Group financial statements as a whole | | | | | |£41,000 based on 2% of gross assets. | |Materiality| | | |Parent Company financial statements as a whole| | | | | |£24,000 based on 2% of gross assets. | |___________|______________________________________________|
*we were appointed in 2024 so 2023 information has been excluded as we were not the auditor.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, the applicable financial reporting framework and the Group’s system of internal control. On the basis of this, we identified and assessed the risks of material misstatement of the Group financial statements including with respect to the consolidation process. We then applied professional judgement to focus our audit procedures on the areas that posed the greatest risks to the group financial statements. We continually assessed risks throughout our audit, revising the risks where necessary, with the aim of reducing the group risk of material misstatement to an acceptable level, in order to provide a basis for our opinion.
The Group consists of the Parent Company and eleven subsidiaries. In determining the components in scope for the Group audit, we obtained an understanding of the Group’s structure, financial reporting processes and where the risk of material misstatement was most likely to arise.
For the purpose of our group audit, the group consisted of three components in total. These were comprised of the Parent Company,
All audit work was performed directly by the Group engagement team, and no component auditors were engaged.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Please refer to the Material uncertainty relating to going concern paragraph of this report to understand the key audit risk identified with respect to the Group’s going concern. In addition to the matter described in the Basis for qualified opinion section and the Material uncertainty relating to going concern, we have determined the matters described below to be the key audit matters to be communicated in our report.
______________________________________________________________________________ | |How the scope of our audit| |Key audit matter |addressed the key audit | | |matter | |___________________________________________________|__________________________| | | |We reviewed and challenged| | | |management’s indicators of| | | |impairment assessment | | | |against the requirements | | | |of the relevant accounting| | | |standards to determine | | | |whether there were any | | | |indicators of impairment. | | |The Group holds intangible|As indicators were | | |assets with a carrying |assessed as present, we | | |value of £519,000 which |also reviewed and | | |relates solely to the |challenged the impairment | | |Group’s Altoona |assessment performed by | |Valuation of |exploration and evaluation|management. | | |asset. IFRS 6 requires | | |intangible |management to perform an |Our specific audit | | |annual impairment |procedures performed in | |assets |indicator assessment, and |this regard included: | | |where an indicator exists,| | |(References: Accounting |the Directors are required|• We evaluated the | |policy – Key estimations|to perform a detailed |adequacy of Management’s | |and assumptions; |impairment assessment. |valuation method and | |Accounting |These assessments require |agreed their inputs to | | |the Directors to apply |supporting documents such | |policy – |judgment, and the outcome |as a sale of a percentage | | |depends on inputs such as |of the underlying | |Intangible |production forecasts, |investment; | | |expected cash flows, | | |Assets; Note 10 – |discount rates, comparable|• We challenged the | |Intangible |market data and the |appropriate classification| | |selection of valuation |of the assets and ensured | |Assets) |techniques. The level of |this is consistent with | | |estimation uncertainty and|the requirements of the | | |subjectivity involved |relevant accounting | | |meant this area required |standards; and | | |significant audit | | | |attention. |• Checked the disclosures | | | |in the annual report meets| | | |the requirements of IFRS. | | | | | | | |Key observations: | | | | | | | |We found the Directors | | | |assessment of the carrying| | | |value of intangible assets| | | |to be acceptable. | |________________________|__________________________|__________________________|
______________________________________________________________________________ | |How the scope of our audit| |Key audit matter |addressed the key audit | | |matter | |___________________________________________________|__________________________| | | |We reviewed and challenged| | | |managements indicators of | | | |impairment assessment | | | |against the requirements | | |The Group acquired proven |of the relevant accounting| | |undeveloped oil and gas |standards to determine | | |assets during the year. |whether there were any | | |These require an annual |indicators of impairment. | |Valuation of proved |impairment indicator | | |undeveloped assets |assessment, and where an |Our specific audit | | |indicator exist, the |procedures included: | |(References: Accounting |Directors are required to | | |policy – Key estimations|perform a detailed |• Obtaining and reviewing | |and assumptions; |impairment assessment. |the reserve report | |Accounting |These assessments require |prepared by management’s | | |the Directors to apply |expert; | |policy – |judgment, and the outcome | | | |depends on inputs such as |• We assessed the | |Property, Plant and |production forecasts, |competence and | |Equipment; |expected cash flows, |independence of | | |discount rates, comparable|Management’s expert used | |Note 11 – |market data and the |to determine the reserves | | |selection of valuation |base; and | |Property, Plant and |techniques. The level of | | |Equipment) |estimation uncertainty and|• Checked the disclosures | | |subjectivity involved |in the annual report meets| | |meant this area required |the requirements of IFRS. | | |significant audit | | | |attention. |Key observations: | | | | | | | |We found the Directors | | | |assessment of the carrying| | | |value of intangible assets| | | |to be acceptable. | |________________________|__________________________|__________________________|
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:
______________________________________________________________________________ | |Group financial statements|Parent Company financial | | | |statements | |_______________________|__________________________|___________________________| |Materiality |£41,000 |£24,000 | |_______________________|__________________________|___________________________| |Basis for determining |Materiality was determined|Materiality was determined | |materiality |as 2% of gross assets. |as 2% of gross assets. | |_______________________|__________________________|___________________________| | |Gross assets were |Gross assets were | | |considered the most |considered the most | | |appropriate benchmark as |appropriate benchmark as | | |they represent the primary|they represent the primary | | |measure used by investors |measure used by investors | | |in assessing the Group’s |in assessing the Group’s | |Rationale for the |performance and position, |performance and position, | |benchmark applied |and the balance sheet is |and the balance sheet is | | |the key driver of economic|the key driver of economic | | |decision-making for a |decision making for a Group| | |Group whose activities |whose activities centre on | | |centre on its assets |its assets ability to | | |ability to generate |generate revenue. | | |revenue. | | |_______________________|__________________________|___________________________| |Performance materiality|£24,600 |£14,400 | |_______________________|__________________________|___________________________| | |Performance materiality |Performance materiality was| | |was set as 60% of overall |set as 60% of overall | | |materiality to reduce the |materiality to reduce the | |Basis for determining |risk that undetected |risk that undetected | |performance materiality|misstatements at the |misstatements at the | | |component and Group level |component and Group level | | |exceed overall |exceed overall materiality.| | |materiality. | | |_______________________|__________________________|___________________________| | |The percentages applied |The percentages applied | | |reflected our assessment |reflected our assessment of| | |of aggregation risk, the |aggregation risk, the | |Rationale for the |nature of the Group’s |nature of the Company’s | |percentage applied for |operations, and our |operations, and our | |performance materiality|expectation of the level |expectation of the level of| | |of misstatement based on |misstatement based on prior| | |prior audit experience and|audit experience and our | | |our risk assessment. |risk assessment. | |_______________________|__________________________|___________________________|
C omponent performance materiality
For the purposes of our Group audit opinion, we set performance materiality for each component of the Group, apart from the Parent Company whose materiality and performance materiality are set out above, based on a percentage of between 60% and 75% of Group performance materiality dependent on a number of factors including our assessment of the risk of material misstatement of those components. Component performance materiality ranged from £18,750 to £25,000.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £2,100. We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the document entitled ‘annual report’ other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the liabilities of £1,481,404 held at
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006 and ISAs (
______________________________________________________________________________ | |Except for the possible effects of the matter | | |described in the basis for qualified opinion | | |section of our report: | | | | | |• the information given in the Strategic | | |report and the Directors’ report for the | | |financial year for which the financial | | |statements are prepared is consistent with the| | |financial statements; and | |Strategic report and Directors’| | | |• the Strategic report and the Directors’ | |report |report have been prepared in accordance with | | |applicable legal requirements. | | | | | |Except for the matter described in the basis | | |for qualified opinion section of our report, | | |in the light of the knowledge and | | |understanding of the Group and Parent Company | | |and its environment obtained in the course of | | |the audit, we have not identified material | | |misstatements in the strategic report or the | | |Directors’ report. | |_______________________________|______________________________________________|
______________________________________________________________________________ | |Arising solely from the limitation on the | | |scope of our work relating to the | | |liability referred to above: | | | | | |• we have not obtained all the information| | |and explanations that we considered | | |necessary for the purpose of our audit; | | |and | | | | | |• we were unable to determine whether | | |adequate accounting records have been | | |kept. | | | | |Matters on which we are required to|We have nothing to report in respect of | |report by exception |the following matters in relation to which| | |the Companies Act 2006 requires us to | | |report to you if, in our opinion: | | | | | |• returns adequate for our audit have not | | |been received from branches not visited by| | |us; or | | | | | |• the Parent Company financial statements | | |are not in agreement with the accounting | | |records and returns; or | | | | | |• certain disclosures of Directors’ | | |remuneration specified by law are not | | |made. | |___________________________________|__________________________________________|
Responsibilities of Directors
As explained more fully in the Directors’ Report, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and Parent Company and the industry in which it operates;
• Discussion with management and those charged with governance;
• Obtaining an understanding of the Group’s and Parent Company’s policies and procedures regarding compliance with laws and regulations
We considered the significant laws and regulations to be the
Our procedures in respect of the above included:
• Detailed discussions were held with management to identify any known or suspected instances of non- compliance with laws and regulations;
• Review of minutes of meetings of those charged with governance and reviewing correspondence with relevant tax and regulatory authorities for any instances of non-compliance with laws and regulations;
• Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud;
• Challenging assumptions and judgements made by management in its significant accounting estimates, including assessing the capabilities of management to consider sufficient judgement and estimates in their assessment over the carrying value of the exploration and evaluation assets, the carrying value of the proved and developed assets, the carrying value of investment in associates subsidiaries, the carrying value of the decommissioning provision and the accounting treatment of acquisitions during the year.
• Review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws and regulations and confirming the amounts due to the authority's records;
• Review of financial statement disclosures and agreeing to supporting documentation;
• Review of legal expenditure accounts to understand the nature of expenditure incurred;
• Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud;
• Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and
• Review of significant and unusual transactions and evaluation of the underlying financial rationale supporting the transactions.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:
• Enquiry with management and those charged with governance and the Audit Committee regarding any known or suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and procedures relating to: o Detecting and responding to the risks of fraud; and o Internal controls established to mitigate risks related to fraud.
• Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud;
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
• Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud to be revenue recognition, management override of controls, including the posting of manual journal entries and the judgements applied by management over the carrying value of the intangible assets, the carrying value of property, plant and equipment, the carrying value of investment in associates and subsidiaries, the carrying value of the decommissioning provision and the accounting treatment of acquisitions during the year.
Our procedures in respect of the above included:
• Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation;
• Assessing significant estimates made by management for bias including the and judgements applied by management; and.
• Performing targeted procedures over recoverable value adjustments, including testing supporting evidence for valuation inputs and assessing whether adjustments made outside routine processes indicated potential bias.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
For and on behalf of
GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED
2024 Restated 2023
Note £’000 £’000
Continuing operations
3 95 -
Revenue
Cost of sales (38) -
Gross profit 57 -
Other operating losses (5) (210)
Administrative expenses (836) (1,595)
Other operating gains 9 644 1,145
Decrease in the decommissioning provision 17 2,506 188
Impairment of intangibles 10,12 (438) (16,843)
Impairment of associates (924) -
Operating loss 4 1,004 (17,315)
Finance costs 5 (542) (263)
Share of loss of associate 12,13 (409) -
Profit/(loss) on ordinary activities before taxation 53 (17,578)
Taxation 7 − −
Profit / (Loss) for the year 53 (17,578)
Other Comprehensive income:
152 (551)
Exchange translation movement
Total comprehensive income for the year 205 (18,129)
Basic profit/(loss) per share: 8
From continuing and total operations 0.01p (5.0)p
Diluted profit/(loss) per share: 8
From continuing and total operations 0.01p (5.0)p
The notes form part of these financial statements.
GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION
AS AT
GROUP COMPANY
Restated as
Restated 2023 at 1 January Restated 2023
2024 (note 2) 2023 2024 (note 2)
(note 2)
NON-CURRENT £’000 £’000 £’000 £’000 £’000
ASSETS Notes
Intangible 10 519 841 - - -
assets
Property, plant 11 754 - 17,899 - −
and equipment
Investment in 12 - - − 467 668
subsidiaries
Investment in 13 532 1,085 − 232 1,085
associates
1,805 1,926 17,899 699 1,753
CURRENT ASSETS
Investments - - 28 - -
held for
trading
Inventory - - 36 - -
Trade and other 14 291 18 22 520 18
receivables
Cash and cash 15 - - 25 - -
equivalents
291 18 111 520 18
CURRENT
LIABILITIES
16 2,497 2,168 2,240 1,866 2,130
Trade and other
payables
Convertible 17 803 510 - 803 510
loans
Other 16 344 285 - 344 285
borrowings
3,644 2,963 2,240 3,013 2,925
NET CURRENT (3,353) (2,945) (2,129) (2,493) (2,907)
LIABILITIES
NON-CURRENT
LIABILITIES 16 2,321 1,586 2,718 355 282
Other payables
Other 17 - 376 287 - 376
borrowings
Decommissioning 18 3,394 5,943 5,627 - −
provision
5,715 7,905 8,632 355 658
NET ASSETS/ (7,263) (8,924) 7,138 (2,149) (1,812)
(LIABILITIES)
EQUITY
19 14,501 13,072 11,194 14,501 13,072
Share capital
Share premium 19 38,236 38,236 38,090 38,236 38,236
Other reserves 20 1,016 1,005 962 1,016 1,005
Currency
translation 231 79 630 - −
reserve
Retained (61,247) (61,316) (43,738) (55,902) (54,125)
deficit
Equity
attributable to
owners of the (7,263) (8,924) 7,138 (2,149) (1,812)
Company and
total equity
The loss for the financial year within the Company accounts of
The notes form part of these financial statements.
The financial statements were approved by the Board and ready for issue on
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
Share Exchange Other Retained
capital Share premium translation reserves deficit Total equity
reserve
£’000 £’000 £’000 £’000 £’000 £’000
At 1 January 11,194 38,090 630 962 (43,738) 7,138
2023 Restated
Loss for the − − − − (17,578) (17,578)
year
Exchange
translation − − (551) − − (551)
movement
Total
comprehensive
income / − − (551) − (17,578) (18,129)
(expense) for
the year
Issue of new 1,878 146 − − − 2,024
shares
Issue of
options & − - − 33 − 33
warrants
Issue of
convertible − − − 10 - 10
loans
At 31
December 2023 13,072 38,236 79 1,005 (61,316) (8,924)
Restated
Profit for - - - - 53 53
the year
Exchange
translation - - 152 - - 152
movement
Total
comprehensive
income / - - 152 - 53 205
(expense) for
the year
Issue of new 1,429 - - - - 1,429
shares
Issue of
options & - - - 23 - 23
warrants
Options
lapsed during (16) 16 -
the year
Issue of
convertible 4 4
loans
At 31 14,501 38,236 231 1,016 (61,247) (7,263)
December 2024
The notes form part of these financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
Share capital Share premium Other reserves Retained Total equity
deficit
£’000 £’000 £’000 £’000 £’000
At 1 January 11,194 38,090 962 (40,327) 9,919
2023
Loss for the
period and
total − − − (13,798) (13,798)
comprehensive
expense
restated
Issue of new 1,878 146 − − 2,024
shares
Issue of − - 33 − 33
warrants
Settlement of
convertible − − 10 - 10
loans
At 31 December 13,072 38,236 1,005 (54,125) (1,812)
2023 Restated
Loss for the
period and
total - - - (1,793) (1,793)
comprehensive
expense
Issue of new 1,429 - - - 1,429
shares
Issue of
options & - - 23 - 23
warrants
Options lapsed - - (16) 16 -
during the year
Issue of
convertible 4 - 4
loans
At 31 December 14,501 38,236 1,016 (55,902) (2,149)
2024
The notes form part of these financial statements.
GROUP AND COMPANY STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED
GROUP COMPANY
Note 2024Restated 2023 2024Restated 2023
£’000 £’000 £’000 £’000
OPERATING ACTIVITIES
53 (17,578) (1,793) (13,923)
Profit / (Loss) for the period
Adjustments for:
20 - 10 - 10
Warrants issued in settlement of fees
Finance costs and interest 5 542 256 499 236
FX on development costs (intangibles) 10 (5) 420 - -
Fair value remeasurement of contingent - - - -
liability
Impairment of subsidiaries/ associate 12 924 29 1,124 12,370
Dilution of OFXT investment 50 - 50 -
Depreciation 39 57 - -
Other amounts written off - 54 - 54
Share based payments 20 22 18 22 18
Gains on settlement of OFX Holdings, LLC 9 (141) (1,521) (141) (65)
loan
Share of loss of associate 12 360 - - -
Loss on disposal of leases 9 - 501 - -
Shares issued as incentives - 127 - 127
Impairment of intangibles 10 438 16,843 - -
Decommissioning provision 19 (2,506) (131) - -
FX on decommissioning provision 19 (204) - - -
Operating cashflow before working (428) (915) (239) (1,173)
capital changes
Decrease/(increase) in trade and other 14 (36) - 5 -
receivables
Decrease in inventories - 36 - -
Increase/(decrease) in trade and other 15 (236) 153 (359) 382
payables
Net cash outflow from operating (700) (726) (593) (791)
activities
INVESTMENT ACTIVITIES
- (8) - (8)
Acquisition of subsidiary
Loans from subsidiary - - 256 -
Loans issued to associate (158) - (158) -
Net cash outflow from investment (158) (8) 98 (8)
activities
FINANCING ACTIVITIES
18 77 - 77 -
Proceeds from issue of ordinary share
capital
Proceeds from convertible loan note 18 195 450 196 450
Repayment of borrowings 15 (92) (20) (64) (20)
Proceeds from borrowings 15 678 343 286 344
Net cash inflow from financing 858 773 495 774
activities
Net increase/(decrease) in cash and cash
equivalents from continuing and total - 39 - (25)
operations
Exchange translation difference - (64) - −
Cash and cash equivalents at beginning - 25 - 25
of period
Cash and cash equivalents at end of 16 - - - -
period
The notes form part of these financial statements.
Major non cash transactions
GROUP COMPANY GROUP COMPANY
2024 2023 2024 2023
£’000 £’000 £’000 £’000
Non-cash investing and financing activities
- 189 - 189
Shares in consideration for the investment in Blade
Oil V
Shares in consideration for the investment in SW 432 - 432 -
Oklahoma, LLC
Shares in conversion of outstanding contractual 533 683 533 683
liabilities
Shares in settlement of certain outstanding trade 100 291 100 291
and other creditors
Share options to Directors and employees - 18 - 18
Contingent liability waived 495 - 495 -
Expenses paid on behalf of the Company 281 - 281 -
Proceeds of share issue received by subsidiary - - 160 -
Investor warrants - 2 - 2
Incentive warrants - 1 - 1
Warrants in consideration for loan settlement - 13 - 13
The notes form part of these financial statements.
1 general information The Company is a public limited company incorporated in theUnited Kingdom and its shares are listed on the AIM market of theLondon Stock Exchange . The Company also has secondary listings on the Quotation Board Segment of the Open Market of theBerlin Stock Exchange ("BER") and Xetra, the electronic trading platform of theFrankfurt Stock Exchange ("FSE"). The Company mainly invests in natural resources and oil and gas projects. The registered office and principal place of business of the Company is as detailed in the Company Information section of the report and accounts on page 3. As permitted by section 408 of the Companies Act 2006, the profit and loss account of the company is not presented as part of these financial statements. The Company’s total comprehensive loss for the financial year was £1.7million (2023: £13.9 million). 2 PRINCIPAL ACCOUNTING POLICIES The principal accounting policies in the preparation of these financial statements are set out below. These policies have been consistently applied throughout all periods presented in the financial statements. As in prior periods, the Group and financial statements have been prepared in accordance withUK -adopted International Accounting Standards . As ultimate parent of the Group, the Company has taken advantage of Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101), which addresses the financial reporting requirements and disclosure exemptions in the individual financial statements of “qualifying entities”, that otherwise apply the recognition, measurement and disclosure requirements ofUK adopted international accounting standards. The disclosure exemption adopted by the Company in accordance with FRS 101 are: i • a statement of compliance with IFRS (a statement of compliance with FRS 101 is provided instead); ii • related party transactions with two or more wholly owned members of the group; and iii • a Statement of Cash Flows and related disclosures iv In addition, and in accordance with FRS 101, further disclosure exemptions have been applied because equivalent disclosures are included in the consolidated financial statements ofADM Energy plc . These financial statements do not include certain disclosures in respect of: v • financial instrument disclosures as required by IFRS 7 Financial Instruments: Disclosures; and vi • fair value measurements – details of the valuation techniques and inputs used for fair value measurement of assets and liabilities as per paragraphs 91 to 99 of IFRS 13 Fair Value Measurement. In publishing the Parent Company financial statements here together with the Group financial statements, the Company is taking advantage of the exemption in Section 408 of the Companies Act 2006 not to present its individual income statement and related notes that form a part of these approved financial statements. The financial statements have been prepared using the measurement bases specified by IFRS for each type of asset, liability, income and expense. The measurement bases are more fully described in the accounting policies below. The current period covered by these financial statements is the year to 31December 2024 . The comparative figures relate to the year ended31 December 2023 . The financial statements are presented in pounds sterling (£) which is the functional currency of the Group. There has been a prior year restatement, further detail can be found below in note 2 “Correction of prior year error”. An overview of standards, amendments and interpretations to IFRSs issued but not yet effective, and which have not been adopted early by the Group are presented below under ‘Statement of Compliance’. GOING CONCERN Going Concern The Directors have prepared the financial statements on a going concern basis, which contemplates the continuity of normal business activities and the realisation of assets and extinguishment of liabilities in the ordinary course of business. In assessing the appropriateness of this basis, the Directors have prepared a cash flow forecast for the period ending30 June 2027 , which indicates that under current conditions, the Group and Company will need to raise funds in order to settle the Group’s existing and forecast contractual and committed obligations. In the base-case cash flow forecast prepared by management, the Group anticipates being able to manage its working capital requirements through a combination of generating cashflows from the Group’s trading operations, successfully entering into settlement or standstill agreements with the Group’s legacy creditors and raising additional funds. These assumptions are not contractually committed and this indicates the existence of a material uncertainty which may cast significant doubt about the ability of the Group and Company to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business. The Group’s primary operating entities areAltoona JV, LLC (“Altoona”) andEco Oil Disposal, LLC (“EOD”). The Group’s forecasts assume that Altoona and EOD achieve production volumes, sales volumes, realised commodity prices, and operating and administrative costs broadly in line with the budgets approved by the Directors. The forecasts also assume the successful execution of funding initiatives, including the completion of the sale of a 10% working interest in the Altoona Lease and EOD entering into a commodity price swap during the first half of 2026, neither of which has been completed as at the date of approval of these financial statements. These initiatives are expected to raise funds of$180,000 and$250,000 respectively. In addition, while the Group has deferred certain costs and creditors historically, there can be no assurance that such arrangements will continue or that creditors, including tax authorities, will agree to revised settlement terms. The Directors have stress tested the base case forecast by preparing sensitised scenarios which incorporate plausible downside circumstances including less optimistic forecasts for the operating entities, a reduction to the oil price and also a scenario whereby the Group is unable to successfully negotiate standstill or settlement agreements with its creditors. In all of the scenarios tested, there is an additional funding requirement. In the worst case scenario, which is a combination of all the downside circumstances happening together, there is an additional funding requirement of £1.4m within the going concern assessment period. The Directors consider there are mitigating factors available to them that can be executed if the downside scenarios were to happen. These include raising additional debt, selling an interest in the Group’s assets and raising additional equity funding from new and existing and shareholders. In addition, the Directors have received a letter of support from the shareholder,Concepta Consulting AG , which indicates that additional funding would be provided to the Group and Company to enable it to meet its working capital requirements in the going concern assessment period.The Group and Company have a history of successfully raising debt and equity as well as selling minority interests in its existing assets. The Directors have undertaken several activities to raise funds to fund its current and ongoing commitments and to raise funds to develop the business to be self sufficient which will enable it to meet its contractual obligations. InJanuary 2026 VEUSA completed a senior secured financing (the "VEUSA Financing") withShoreline Energies, LLC (the "Lender"). The VEUSA Financing is structured as a 5-year,US$1 million loan with an interest rate of 12.0% per annum. During the first year the loan is interest only with interest payments made quarterly in arrears. Starting in the second year the loan has even, monthly amortisation payments until maturity. The Company is a guarantor of the VEUSA Financing and has entered into a share pledge of the share capital of VEUSA andADM 113 Limited (BVI), the entity which holds the equity capital ofPR Oil & Gas (Nigeria) Limited , the owner of a 12.3% cost share and 9.2% profit share in OML-113,Aje Field . The terms of the loan include a restricted payment provision whereby VEUSA is not permitted to make any dividend or other payments to the Company without the express permission (at the sole discretion) of the lender. InNovember 2025 the Group entered into a commodity price swap to sell 1,200 barrels of oil for a period of 18 months starting fromNovember 2026 . Pursuant to the terms of the transactionUS$225,000 was funded to JKT Reclamation at closing and JKT Reclamation will make a monthly payment equal to 1,200 multiplied by the difference between the average monthly price ofWest Texas Intermediate crude oil andUS$46.75 . Although EOD and Altoona may generate distributable cash, the Directors note that, under the terms of Vega EnergyUSA , Inc.’s financing arrangements, lender consent is required before funds can be upstreamed to the Company. The ability to obtain such consent is not within the Group’s sole control. As a result of the matters described above, the Company and Group is likely to require ongoing financial support from shareholders and other stakeholders to meet its obligations as they fall due. While such support has been provided in the past and the Directors have received a letter of support that this will continue, there can be no assurance that it will continue or on favourable terms. Having reviewed the Group's overall position and outlook in respect of the matters identified above, the Directors are of the opinion that there are reasonable grounds to believe that funding will be secured and therefore that the operational and financial plans in place are achievable. In light of the matters described above, including the dependence on the successful execution of operational plans across the Group’s underlying businesses, the assumptions regarding revenue, costs and commodity prices, the need to secure lender consents, the reliance on continued access to external capital, and the concentration of key responsibilities among a small number of individuals, the Directors acknowledge the existence of material uncertainties that may cast significant doubt on the Company’s and the Group’s ability to continue as a going concern. These financial statements do not include any adjustments that may be required if the Company or the Group is unable to continue as a going concern.
STATEMENT OF COMPLIANCE
The financial statements of the Group have been prepared in accordance with
UK -adopted international accounting standards and with the requirements of
the Companies Act 2006.
The Group’s and Company’s financial statements for the year ended 31
December 2024 were approved and authorised for issue by the Board of
Directors on 6 February 2026 and the Statements of Financial Position were
signed on behalf of the Board by Stefan Olivier .
The Group financial statements give a true and fair view and have been
prepared and approved by the Directors in accordance with UK -adopted
international accounting standards and with the requirements of the
Companies Act 2006.
New standards, amendments and interpretations adopted by the Company
The following new standards have come into effect this year however they
have no impact on the Group:
Standard Description Effective date
IFRS 16 Leases Lease Liability in a Sale and 1 January 2024
Leaseback – Amendments
Classification of liabilities
IAS 1 Presentation of as Current or Non-Current and 1 January 2024
Financial Statements Non-current Liabilities with
Covenants – Amendments
IFRS 7 Financial Instruments Disclosures – Supplier Finance 1 January 2024
Arrangements
Standards, amendments and interpretations, which are effective for reporting
periods beginning after the date of these financial statements which have
not been adopted early:
Standard Description Effective date
IAS 21 The Effects of Changes in 1 January 2025
Foreign Exchange Rates
Classification and Measurement
IFRS 9 Financial Instruments of Financial Instruments– 1 January 2026
Amendments
General Requirements for
IFRS S1 Disclosure of 1 January 2024*
Sustainability-related
Financial Information
IFRS S2 Climate-related Disclosures 1 January 2024*
IFRS 18 Presentation and Disclosure in 1 January 2027*
Financial Statements
Financial Instruments and IFRS
7 Financial Instruments:
Amendments to IFRS 9 Disclosures: Classification and 1 January 2026*
Measurement of Financial
Instruments
IFRS Accounting Standards Annual Improvements to IFRS 1 January 2026
standards
Contracts Referencing
IFRS 9 and IFRS 7 Nature-dependent Electricity – 1 January 2026*
Amendments
*Not yet endorsed in the UK
There are no IFRS’s or IFRIC interpretations that are not yet effective that
would be expected to have a material impact on the Company or Group.
CORRECTION OF PRIOR YEAR ERROR
The below tables show the prior adjustments to the 2022 and 2023 Group and
Company figures.
GROUP
Restated 31
1 31 December
1 January Adjustment January December Adjustment 2023
2023 2023 2023
Restated
(note 2)
£’000 £’000 £’000 £’000 £’000 £’000
NON-CURRENT
ASSETS
Intangible - - - 357 484 841
assets
Property, plant 17,899 - 17,899 - - -
and equipment
Investment in - - - -
subsidiaries
Investment in - 1,062 23 1,085
associates
17,899 - 17,899 1,419 507 1,926
CURRENT ASSETS
Investments
held for 28 - 28 - - -
trading
Inventory 36 - 36 - - -
Trade and other 22 - 22 18 - 18
receivables
Cash and cash 25 - 25 - - -
equivalents
111 - 111 18 - 18
CURRENT
LIABILITIES
Trade and other 2,240 - 2,240 2,273 (105) 2,168
payables
Convertible - - - 427 83 510
loans
Other - - - - 285 285
borrowings
2,240 - 2,240 2,700 263 2,963
NET CURRENT (2,129) - (2,129) (2,682) (263) (2,945)
LIABILITIES
NON-CURRENT
LIABILITIES
Other payables 2,718 - 2,718 1,586 - 1,586
Other 287 - 287 638 (262) 376
borrowings
Decommissioning 1,557 4,070 5,627 1,621 4,322 5,943
provision
4,562 4,070 8,632 3,845 4,060 7,905
NET ASSETS/ 11,208 (4,070) 7,138 (5,108) (3,816) (8,924)
(LIABILITIES)
EQUITY
Share capital 11,194 - 11,194 13,072 - 13,072
Share premium 38,090 - 38,090 38,236 - 38,236
Other reserves 962 - 962 1,036 (31) 1,005
Currency 630 - 630 15 64 79
translation
reserve
Retained (39,668) (4,070) (43,738) (57,467) (3,849) (61,316)
deficit
Equity
attributable to 11,208 (4,07,138 (5,108) (3,816) (8,924)
owners of the 70)
Company and
total equity
COMPANY
31
December
31 December 2023 Adjustment 2023
Restated
£’000 £’000 £’000
NON-CURRENT ASSETS
Investment in subsidiaries 668 - 668
Investment in associates 1,062 23 1,085
1,730 23 1,753
CURRENT ASSETS
Trade and other receivables 18 - 18
Cash and cash equivalents - - -
18 - 18
CURRENT LIABILITIES
Trade and other payables 2,235 (105) 2,130
Convertible loans 427 83 510
Other borrowings - 285 285
2,662 263 2,925
NET CURRENT LIABILITIES (2,644) (263) (2,907)
NON-CURRENT LIABILITIES
Other payables 282 282
Other borrowings 638 (262) 376
920 (262) 658
NET ASSETS/ (LIABILITIES) (1,834) 22 (1,812)
EQUITY
Share capital 13,072 - 13,072
Share premium 38,236 - 38,236
Other reserves 1,036 (31) 1,005
(54,178) 53 (54,125)
Retained deficit
Equity attributable to owners of the (1,834) 22 (1,812)
Company and total equity
During the year ended 31 December 2024 , the Group determined that the
financial statements for the prior period contained errors that related to
the following areas:
Decommissioning provision – The rate applied to discount the decommissioning
provision in respect of the OML 113 asset was incorrect because it did not
reflect the risk free rate as required by IAS 37. An adjustment has been
posted to correct the rate applied and this resulted in a £4,070,000
increase to the provision at 1 January 2023 . In addition, the Company had
omitted a decommissioning provision in respect of the Altoona assets
acquired during 2023 and an adjustment was posted of £481,000 to correct
this. The combined effect of adjustments to the discount rate for the
existing decommissioning provision and the recognition of the Altoona
provision in 2023 was a £316,000 increase in 2023. The effect on equity was
a decrease of £4,070,000 in 2022 and a cumulative decrease of £3,838,000 in
2023.
Decommissioning provision
£’000
1 January 2023 as previously reported 1,557
Prior year adjustment 4,070
1 January 2023 restated 5,627
Prior year adjustment 316
31 January 2023 restated 5,943
Intangible assets - No decommissioning provision or associated asset for the
Altoona lease had been accounted for in 2023. This resulted in a £481,000
increase to intangibles in 2023. There was no effect on equity.
Intangible assets
£’000
1 January 2023 360
Prior year adjustment 481
31 January 2023 restated 841
Investments – There was a capital contribution made to the investment in
OFXT that was not accounted for in 2023. This resulted in an increase of
£23,566 to Investments. There was no effect on equity.
Investment in OFXT
£’000
31 January 2023 as previously reported 1,062
Prior year adjustment 23
31 January 2023 restated 1,085
Accruals – The fees for a director had been under accrued for in 2023. This
resulted in a £20,208 increase to accruals in 2023. The effect on equity was
a £20,208 decrease.
Accrual
£’000
31 January 2023 as previously reported 543
Prior year adjustment 20
31 January 2023 restated 563
Convertible Loan note – The incorrect discount rate had been used to measure
the fair value of the liability component of the convertible loan note. This
resulted in a £83,000 increase to the convertible loan note liability in
2023. The effect on equity was a £53,000 decrease.
CLN
£’000
31 January 2023 as previously reported 427
Prior year adjustment 83
31 January 2023 restated 510
Employment taxes – The employment taxes in 2023 had been over accrued for in
2023. This resulted in a £123,000 decrease to the liabilities in 2023. The
effect on equity was a £123,000 increase.
Employment taxes payable
£’000
31 January 2023 as previously reported 351
Prior year adjustment 123
31 January 2023 restated 228
Classification of certain liabilities as non-current – In the previous year,
there were liabilities classified as non-current without the contractual
right to defer payment for at least 12 months. These loans have been
reclassified to be presented as current. There is no impact on the net
assets as a result of this re-classification.
Impact on equity (increase/(decrease) in equity)
31 December 2023 1 January 2023
£’000 Restated £’000
Decommissioning provision (3,838) (4,070)
Accruals (20) -
Loans payable 123 -
CLN (53) -
Total liabilities (3,788) (4,070)
Net impact on equity (3,788) (4,070)
Impact on statement of profit or loss (increase/(decrease) in profit)
31 December 2023
£’000
Finance fee 168
Director fee (20)
Employment taxes 123
CLN finance cost (53)
Net impact on profit for the year (28)
Attributable to:
Equity holders of the parent (28)
Non-controlling interests -
Impact on operating cash flows for the year (increase/(decrease) in cash
outflow)
31 December 2023
£’000
Increase of decommissioning provision liability (4,322)
Increase in finance cost from decommissioning provision 168
Impact of correction to CLN liability (30)
Net impact of cash outflow (4,184)
The change did not have an impact on OCI for the period or the Group’s
investing and financing cash flows.
There was no impact to the basic and diluted earnings per share (EPS).
KEY ESTIMATES AND ASSUMPTIONS
Estimates and assumptions used in preparing the financial statements are
reviewed on an ongoing basis and are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances. The results of these estimates and assumptions form the
basis of making judgements about carrying values of assets and liabilities
that are not readily apparent from other sources. Judgement also applies in
determining whether costs associated with contingent liabilities can be
reliably estimated or not and the extent to which it is appropriate to make
disclosure in this area.
RESERVES OF OIL & GAS ASSETS
The Group’s property, plant and equipment relate to the proved undeveloped
assets acquired from its interest in Vega Oil and Gas, LLC . Management have
applied their judgment in estimating the economic reserves of oil that can
be extracted at Vega. This estimate is used in the calculation of depletion
by applying the units of production method.
IMPAIRMENT OF INTANGIBLE ASSETS
Note 10 summarises the cumulative cost less amortisation of the Group’s
indirect investment in the Aje Field (OML 113). During the year, the
Directors noted indicators of impairment related to this asset. They have
therefore reviewed the value of the Group’s proportionate share of the Aje
fixed assets (which as a cash generating unit is represented by the
property, plant and equipment asset relating to the cumulative cost of its
acquisition and funding of its interest in the Aje Field) and have
determined that it is appropriate to impair the asset by £202,359 (2023:
£12,619,000) down to nil as oil production has ceased here. This therefore
resulted in the investment in PR Oil & Gas Nigeria Ltd being impaired to
nil as this company holds the Aje Field.
Note 24 summaries the acquisition of Blade Oil V, LLC and the return of
some of the leases back to the seller. This resulted in Blade Oil V, LLC’s
remaining lease, Altoona, being recognised as an exploration and evaluation
asset under intangible assets. The Directors undertaken an impairment
indicator assessment in accordance with IFRS 6 which requires them to use
their judgment.
IMPAIRMENT OF ASSOCIATES
Investments in associates are stated at cost, which is the fair value of
the consideration paid, less any impairment provision. Note 12 summarises
the impairment consideration of the Group’s associate OFX Technologies,
LLC . OFX Technologies, LLC acts as a holding company for Efficient Oil
Solutions, LLC which is a revenue generating software-as-a-service company.
The directors completed a valuation exercise and determined that Efficient
Oil Solutions, LLC has a minimum valuation which is less than the carrying
value of the investment recognised by the Group. As such, management has
impaired the investment in OFX Technologies, LLC by £803,000 (2023:nil).
CONTINGENT CONSIDERATION
Note 24 summaries the contingent consideration of nil (2023: £765,000)
recognised as part of the purchase price of Blade Oil V, LLC . The
assessment of contingent considerations inherently involves the exercise of
significant judgment and estimates of the outcome of future events. This
judgement involves the Directors making assessment as to whether an
economic outflow relating to a past event is considered probable, possible
or remote, and the extent to which its outcome can be reliably estimated.
During the year the remaining contingent consideration was cancelled.
VALUATION OF CONVERTIBLE LOAN NOTE
The Group issued a convertible loan note in the year ended 31 December 2023
and was determined to be a compound instrument upon initial recognition.
Accordingly, the CLN is split between a liability element and an equity
component at the date of issue. At the year end, the liability element had
a carrying value of £803,000 (2023: £510,000)and has subsequently been
recognized at amortised cost. Management estimated the fair value on
initial recognition to be £807,000 (2023: £520,000) using the present value
formula and a discount rate of 16% resulting in a difference compared to
the proceeds received of £4,000 (2023: £10,000), which has been treated as
the equity element of the compound instrument. Finance costs of £102,000
(2023: £70,000) has been recognised and is being unwound evenly over the
period of the loan.
DECOMMISSIONING PROVISION
Decommissioning costs will be incurred by the Group, in accordance with the
terms of the Joint Operating Agreement, at the end of the operating life of
the production facilities associated with the Group’s interest in OML 113.
The Group assesses its retirement obligation at each reporting date. The
ultimate asset retirement costs are uncertain and cost estimates can vary
in response to many factors, including changes to relevant legal
requirements, the emergence of new restoration techniques or experience at
other production sites. The expected timing, extent and amount of
expenditure can also change, for example in response to changes in reserves
or changes in laws and regulations or their interpretation. Therefore,
significant estimates and assumptions are made in determining the provision
for asset retirement obligation. As a result, there could be significant
adjustments to the provisions established which would affect future
financial results. The provision at reporting date represents management’s
best estimate of the present value of the future asset retirement costs
required using an annual discount rate of 2.67% (2023:2%). The provision
during the year decreased by £2,345,000 as a result of a change to the cost
estimates (2023: £316,000).
SHARE BASED PAYMENTS
The Group has made awards of options and warrants over its unissued share
capital to certain Directors, employees and professional advisers as part
of their remuneration.
The fair value of options and warrants are determined by reference to the
fair value of the options and warrants granted, excluding the impact of any
non-market vesting conditions. In accordance with IFRS 2 ‘Share Based
Payments’, the Group has recognised the fair value of options and warrants,
calculated using the Black-Scholes option pricing model. The Directors
apply this model on the basis that there are considered to be no
performance obligations included within these issued options. The share
based payment charge for the year was £23,000 (2023: £33,211). The
Directors have made assumptions particularly regarding the volatility of
the share price at the grant date in order to reach a fair value. Further
information is disclosed in Note 21.
GOING CONCERN
See note 2, Going Concern accounting policy.
REVENUE RECOGNITION
Sales represent amounts received and receivable from third parties for goods
rendered to the customers and distributions from connected parties. The Group
follows the five step process set out in IFRS 15 for revenue recognition.
Oil sales
Sales are recognised when control of the goods has transferred to the
customer. Revenue is derived from the production of oil and/or natural gas
from wells in which Vega Oil and Gas, LLC owns interest. Production of crude
oil or natural gas typically results from fluids and/or gas coming to the
surface as a result of natural pressure in the well bore driving production
to the surface and/or use of pumps to lift the production to the surface and
is then separated as either oil or gas. After separation, the oil will be
stored in tanks on locations from which a crude oil purchaser will be
contracted to purchase and pick up oil directly from the tanks with a "run
ticket" issued to the well operator documenting the quantity of oil that is
transferred to the oil purchaser. Natural gas production will be transferred
to a pipeline with quantities attributable to the Company metered at the
point in which it transfers into a pipeline owned by a natural gas purchaser.
Upon transfer to the truck or pipeline owned by the purchaser, the
performance obligation is satisfied, full title and risk associated with the
commodity changes and the Company is entitled to payment based on prevailing
commodity prices. Revenue is measured as the amount of consideration which
the Group expects to receive, based on the market price for oil after
deduction of applicable costs and sales taxes.
During the year the revenue recognised in relation to oil sales totalled
£94,000 (2023: £nil). Payments are typically received around 20 days from the
end of the month during which delivery has occurred. There are no balances of
accrued or deferred revenue at the balance sheet date.
Oil reclamation distributions
ADM US has a 42.0% economic interest in the distributions of its investment
JKT Reclamation until it has received US$356,250.00 and 30.6% thereafter.
Under the terms of the agreement with JKT Reclamation, ADM US is entitled to
recognise its share of the distribution at the point in which the
distribution is approved by the Board of JKT Reclamation . This would be after
all of JKT Reclamation’s operating expenses and planned future capital
expenditures are provided for from revenue and/or financing sources available
to JKT Reclamation.
TAXATION
UK taxes
Current income tax assets and/or liabilities comprise those obligations to,
or claims from, fiscal authorities relating to the current or prior reporting
period, that are unpaid at the statement of financial position date. They are
calculated according to the tax rates and tax laws applicable to the fiscal
periods to which they relate, based on the taxable result for the year. All
changes to current tax assets or liabilities are recognised as a component of
tax expense in the income statement.
Deferred income taxes are calculated using the liability method on temporary
differences. This involves the comparison of the carrying amounts of assets
and liabilities in the consolidated financial statements with their
respective tax bases. However, deferred tax is not provided on the initial
recognition of goodwill, nor on the initial recognition of an asset or
liability, unless the related transaction is a business combination or
affects tax or accounting profit. In addition, tax losses available to be
carried forward as well as other income tax credits to the Group are assessed
for recognition as deferred tax assets.
Deferred income taxes are calculated using the liability method on temporary
differences. This involves the comparison of the carrying amounts of assets
and liabilities in the consolidated financial statements with their
respective tax bases. However, deferred tax is not provided on the initial
recognition of goodwill, nor on the initial recognition of an asset or
liability, unless the related transaction is a business combination or
affects tax or accounting profit. In addition, tax losses available to be
carried forward as well as other income tax credits to the Group are assessed
for recognition as deferred tax assets.
Deferred tax liabilities are always provided for in full. Deferred tax assets
are recognised to the extent that it is probable that they will be able to be
offset against future taxable income. Deferred tax assets and liabilities are
calculated, without discounting, at tax rates that are expected to apply to
their respective period of realisation, provided they are enacted or
substantively enacted at the statement of financial position date.
Most changes in deferred tax assets or liabilities are recognised as a
component of tax expense in the income statement. Only changes in deferred
tax assets or liabilities that relate to a change in value of assets or
liabilities that is charged directly to equity are charged or credited
directly to equity.
Nigerian taxes
The Company’s subsidiary, P R Oil & Gas Nigeria Ltd operates offshore Nigeria
and is subject to the tax regulations of that country.
Current income tax assets and liabilities for current period are measured at
the amount expected to be recovered from or paid to the taxation authorities.
The tax rates and tax laws are those that are enacted or substantially
enacted at the reporting date. The Company engaged in exploration and
production of crude oil (upstream activity). Therefore, its profits are
taxable under the Petroleum Profit Tax Act.
US taxes
The Company’s subsidiaries based in the US are subject to the tax regulations
of that country.
Current income tax assets and liabilities for current period are measured at
the amount expected to be recovered from or paid to the taxation authorities.
The tax rates and tax laws are those that are enacted or substantially
enacted at the reporting date. The Company engaged in exploration and
production of crude oil (upstream activity). Therefore, its profits are
taxable under the relevant federal tax codes of the Internal Revenue Service
as well as under the relevant state tax codes.
IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT ASSETS (DEVELOPED OIL AND GAS
ASSETS)
Proven oil and gas properties are reviewed annually for impairment whenever
events or changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The carrying value is
compared against the expected recoverable amount of the asset, generally by
net present value of the future net cash flows, expected to be derived from
production of commercial reserves or consideration expected to be achieved
through the sale of its interest in an arms-length transaction, less any
associated costs to sell. The cash generating unit applied for impairment
test purposes is generally the field and the Group’s interest in its
underlying assets, except that a number of field interests may be grouped
together where there are common facilities.
FINANCIAL ASSETS
Financial assets are recognised in the Group’s statement of financial
position when the Group becomes a party to the contractual provisions of the
instrument.
The Group’s financial assets are classified into the following specific
categories: ‘Investments measured at fair value through profit and loss,
‘investments held for trading’, and ‘loans and receivables’. The
classification depends on the nature and purpose of the financial assets and
is determined at the time of initial recognition.
All Trade receivables, loans, and other receivables that have fixed or
determinable payments that are not quoted in an active market are classified
as ‘loans and receivables’. Loans and receivables are measured at amortised
cost using the effective interest method, less any impairment. Interest
income is recognised by applying the effective interest rate, except for
short-term receivables when the recognition of interest would be immaterial.
INVESTEMENTS IN ASSOCIATES
The Group accounts for investments in associates in accordance with IAS 28.An
associate is an entity over which the Group has significant influence but does
not have control or joint control, typically evidenced by holding between 20%
and 50% of the voting power of the investee. Investments in associates are
initially recognised at cost. Subsequently, the carrying amount is adjusted to
recognise the Group’s share of the associate’s post-acquisition profits or
losses, and other comprehensive income. The carrying amount of investments in
associates is tested for impairment whenever there is an indication that the
investment may be impaired. Impairment losses are recognised in the statement
of profit and loss.
INVENTORY
Inventory comprises stock of unsold oil in storage and is valued at the lower
of cost and net realisable value.
BASIS OF CONSOLIDATION
The consolidated financial statements present the results of ADM Energy plc
and its subsidiaries (“the Group”) as if they formed a single entity.
Intercompany transactions and balances between Group companies are therefore
eliminated in full.
The consolidated financial statements incorporate the results of business
combinations using the purchase method. In the Statement of Financial
Position, the acquiree’s identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the acquisition
date. The results of acquired operations are included in the Consolidated
Income Statement.
The company has the following subsidiaries which were effectively dormant in
the current and prior period and are considered to be highly immaterial to the
Group's financial statements. As such these subsidiaries have not been
included in the consolidated financial statements:
• Geo Estratos MXOil, SAPI de CV
• ADM Asset Holdings Limited
• ADM Energy Services Limited
• ADM 113 Limited BVI
• K.O.N.H. (UK) Limited
• ADM 113 One Limited JOINT OPERATIONS (OML 113 OPERATING AGREEMENT)
The Group has a 9.2% profit share and 12.3% cost share in the OML 113
operating licence. The operating agreement for OML 113 is a joint arrangement,
with the fundamental decisions requiring unanimity between the partners. Other
decisions require a qualified majority decision. As no corporate entity exists
the agreement cannot be considered to meet the definition of a joint venture.
In relation to its interests in the OML 113 operations, the Group recognises:
-- The fair value of the Group’s share of the underlying assets of the
joint operation (classified as intangible assets), measured at
historical cost less amortisation and impairment.
-- Amounts owed in respect of the joint operating agreement
-- Revenue from the sale of its share of the output arising from the
joint operation
-- Expenses, including its share of any expenses incurred jointly
ASSET ACQUISITIONS (NOTE 25)
Vega Oil and Gas, LLC
On 1 June 2024 , ADM USA acquired 100% of the equity interest of Vega Oil and
Gas, LLC . In accordance with IFRS 3 Business Combinations, the Group applied
the optional concentration test to assess whether the acquired set of
activities and assets from Vega Oil and Gas, LLC constitutes a business.
On acquisition, Vega owned three wells which had been recognised on the
balance sheet as 'proved properties'. The acquisition balance sheet contains
one identifiable asset, being the three wells. Only one well is producing, but
the other two are proved wells and given the assets are similar in nature,
valued together and no other assets exist, the concentration test is
satisfied. As such, the acquisition meets the definition of an asset
acquisition and the gross assets acquired will be valued equal to the
consideration of the transaction. Gross assets acquired exclude cash and cash
equivalents, deferred tax assets, and goodwill resulting from the effects of
deferred tax liabilities.
SW Oklahoma Reclamation, LLC (“SWOK”)
On 5 April 2027 , ADM USA acquired 100.0% of the Class A membership of SW
Oklahoma Reclamation, LLC . The Company owns 66.6% of the voting rights of SWOK
and has control over SWOK by virtue of its shareholding. SWOK owns 60% of JKT
Reclamation, LLC , thus the group indirectly owns 40%. Whilst the underlying
business of SWOK, JKT Reclamation, LLC , clearly meets the definition of a
business given that this is revenue generating and fully operational, SWOK
does not. SWOK is a holding company that has been purchased by ADM USA to
benefit from the distributions of JKT Reclamation, LLC . Thus, the acquisition
is deemed to be an asset acquisition, by virtue of ADM USA essentially
purchasing the investment SWOK holds in JKT Reclamation, LLC .
The investment will be accounted for as an associate, in line with ADM USA’s
indirect holding percentage of JKT Reclamation, LLC , being 40%.
EQUITY INVESTMENTS
Under the equity method, the investment in an associate is initially
recognised at cost. The carrying amount of the investment is adjusted to
recognise changes in the Groups share of net assets of the associate. Goodwill
relating to the associate is included in the carrying amount of the
investments and is not tested for impairment separately. The statement of
profit or loss reflects the Group’s share of the results of operations of the
associate. The aggregate of the Group’s share of profit or loss of an
associate is shown on the face of the statement of profit or loss outside the
operating profit and represents profit or loss after tax.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand and demand deposits, together
with other short-term, highly liquid investments that are readily convertible
into known amounts of cash and which are subject to an insignificant risk of
changes in value.
EQUITY
An equity instrument is any contract that evidences a residual interest in the
assets of the Company after deducting all of its liabilities. Equity
instruments issued by the Company are recorded at the proceeds received net of
direct issue costs.
Equity comprises the following:
-- Share capital represents the nominal value of equity shares issued.
-- The share premium account represents premiums received on the initial
issuing of the share capital. Any transaction costs associated with
the issuing of shares are deducted from share premium, net of any
related income tax benefits.
-- Option reserve represents the cumulative cost of share based payments
in respect of options granted.
-- Warrant reserve represents the cumulative cost of share based payments
in respect of warrants issued.
-- Convertible loan note reserve represents the equity portion of
convertible loan notes issued.
-- Currency translation reserve is used to recognise foreign currency
exchange differences arising on translation of functional currency to
presentation currency.
Retained earnings include all current and prior period results as disclosed in
the statement of comprehensive income.
FINANCIAL LIABILITIES
Financial liabilities are recognised in the Group’s statement of financial
position when the Group becomes a party to the contractual provisions of the
instrument. All interest related charges are recognised as an expense in
finance cost in the income statement using the effective interest rate method.
The Group’s financial liabilities comprise trade and other payables.
Trade payables are recognised initially at their fair value and subsequently
measured at amortised cost less settlement payments.
DECOMMISSIONING LIABILITY
A decommissioning liability is recognised when the Group has a present legal
or constructive obligation as a result of past events, and it is probable that
an outflow of resources will be required to settle the obligation, and a
reliable estimate of the amount of obligation can be made. A corresponding
amount equivalent to the obligation is also recognised as part of the cost of
the related production plant and equipment. The amount recognised is the
estimated cost of decommissioning, discounted to its present value, using a
discount rate of 2.67% (2023: 2%). Changes in the estimated timing of
decommissioning cost estimates are dealt with prospectively by recording an
adjustment to the provision, and a corresponding adjustment to production
plant and equipment. The unwinding of the discount on the decommissioning
provision will be included in the income statement.
CONTINGENT LIABILITIES
Contingent liabilities are possible obligations arising from past events whose
existence will be confirmed by uncertain future events that are not wholly
within the control of the Group. Contingent liabilities also include
obligations that are not recognised because their amount cannot be measured
reliably or because settlement is not probable.
Unless the possibility of an outflow of economic resources is remote a
contingent liability is disclosed in the notes.
SHARE BASED PAYMENTS Where share options are awarded, or warrants issued to employees, the fair value of the options/warrants at the date of grant is charged to the statement of comprehensive income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options/warrants that eventually vest. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition. Where warrants or options are issued for services provided to the Group, including financing, the fair value of the service is charged to the statement of comprehensive income or against share premium where the warrants or options were issued in exchange for services in connection with share issues. Where the fair value of the services cannot be reliably measured, the service is valued using Black Scholes valuation methodology taking into consideration the market and non-market conditions described above. Where the share options are cancelled before they vest, the remaining unvested fair value is immediately charged to the statement of comprehensive income. FOREIGN CURRENCIES The Directors consider Sterling to be the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The financial statements are presented in Sterling, which is the Group’s functional and presentation currency. Foreign currency transactions are translated into Sterling using the exchange rates prevailing at the date of the transactions. Foreign currency exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are recognised in the income statement. Non-monetary items that are measured at historical costs in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated into the functional currency using the exchange rates at the date when the fair value was determined. SEGMENTAL REPORTING A segment is a distinguishable component of the Group’s activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group’s chief operating decision maker to make decisions about the allocation of resources and assessment of performance and about which discrete financial information is available. The chief operating decision maker reviews financial information for and makes decisions about the Group’s investment based on geographical location. The operations of the Group as a whole are the exploration for, development and production of oil and gas reserves. The two geographic reporting segments are made up as follows:UK head office andADM 113 Ltd (Nigeria ) and the dormant companies USADM USA , Vega, Blade V and SWOK Oil and gas leases Segment revenue, segment expense and segment results include transfers between segments. Those transfers are eliminated on consolidation. Information regarding the current year’s results for each reportable segment is included below. UK US Elims Total 2024 £,000s £’000s £’000s £’000s Total revenue - 95 - 95 Cost of sales - (38) - (38) Other operating losses (5) - - (5) Administrative expenses (791) (45) - (836) Decrease in decommissioning provision 2,506 - - 2,506 Other gains 638 6 - 644 Impairment (1,124) (238) - (1,362) Share of loss of associate (114) (295) - (409) Finance costs (485) (57) - (542) Reportable segment profit/(loss) before taxation 625 (572) - 53 Taxation - - - - Reportable segment profit/(loss) after taxation 625 (572) - 53 Reportable segment assets Intangibles - 519 - 519 Property, plant and equipment - 754 - 754 Investment in subsidiaries 467 - (467) - Investment in associates 232 300 - 532 Other assets 520 (157) (72) 291 Consolidated total assets 1,219 1,416 (539) 2,096 Reportable segment liabilities Non-current liabilities (355) (5,360) - (5,715) Current liabilities (3,013) (703) 72 (3,644) Consolidated total liabilities (3,368) (6,063) 72 (9,359) UK US Elims Total 2023 (restated) £,000s £’000s £’000s £’000s Total revenue - - - - Other operating losses (210) - - (210) Administrative expenses (1,082) (513) - (1,595) Decrease in decommissioning provision 188 - - 188 Other gains 1,145 - - 1,145 Impairment (16,843) - - (16,843) Finance costs (263) - - (263) Reportable segment profit/(loss) before (17,065) (513) - (17,578) taxation Taxation - - - - Reportable segment profit/(loss) after taxation (17,065) (513) - (17,578) Reportable segment assets Intangibles 841 - - 841 Investment in associates 1,085 - - 1,085 Other assets 18 - - 18 Consolidated total assets 1,944 - - 1,944 Reportable segment liabilities Non-current liabilities 7,905 - - 7,905 Current liabilities 2,953 10 - 2,963 Consolidated total liabilities 10,858 10 - 10,868
3 REVENUE The Group has a share in oil and gas licences in theUSA and also receives Oil reclamation distributions. 2024 2023 £’000 £’000 Revenue from share in oil licenses 95 - 95 -
4 OPERATING LOSS
2024 Restated 2023
£’000 £’000
Loss from continuing operations is arrived at after
charging/(crediting):
Directors’ remuneration (see note 6) 227 243
Amortisation - 57
Decrease to decommissioning provision (2,506) (188)
Impairment of intangible assets 438 16,843
Impairment of associates 924 -
Auditors’ remuneration: -
fees payable to the principal auditor for the audit of 100 47
the Group’s financial statements
5 FINANCE COSTS
2024 Restated 2023
£’000 £’000
Short term loan finance costs 378 166
Bank interest and charges 48 7
Unwinding of decommissioning provision 26 20
Interest receivable on loans given (12) -
Interest on convertible loan note 102 70
542 263
6 EMPLOYEE REMUNERATION
The expense recognised for employee benefits for continuing operations is
analysed below:
2024 2023
£’000 £’000
Wages and salaries (including directors and employee benefits) 227 253
Pensions - 19
Amounts written off as due to directors - (100)
Social security costs - 71
227 243
Directors’ remuneration:
Wages and salaries (including benefits) 227 253
Pensions - 19
Social security costs - 71
227 343
Further details of Directors’ remuneration are included in the Report on Directors’ Remuneration on page 18.
Only the directors are deemed to be key management, there are no employees and no employee remuneration. The average number of employees (including directors) in the Group was nil (2023:6).
7 INCOME TAX EXPENSE
2024 2023
£’000 £’000
Current tax – ordinary activities - -
2024 Restated 2023
£’000 £’000
Profit / (Loss) before tax from ordinary activities 53 (17,578)
Profit/ (Loss) before tax multiplied by rate of 13 (3,340)
corporation tax in the UK of 25% (2023: 19%)
Effect of tax rates in foreign jurisdictions 89 1,347
Expenses not deductible for tax purposes 68 2,537
Unrelieved tax losses carried forward (170) (544)
Total tax charge for the year - -
The Groups loss for (2024: profit) 2023 is £17,578,000,
and the unrecognised deferred tax asset is £714,000 (2023:
£544,000). No deferred tax asset has been recognised in
respect of the Group’s losses as the timing of their
recoverability is uncertain.
8 EARNINGS AND NET ASSET VALUE PER SHARE
Earnings
The basic and diluted earnings per share is calculated by dividing the loss
attributable to owners of the Group by the weighted average number of ordinary
shares in issue during the year.
2024 Restated 2023
£’000 £’000
Profit/(loss) attributable to owners of the Group
- Continuing operations 53 (17,578)
Continuing and discontinued operations 53 (17,578)
2024 2023
Weighted average number of shares for calculating 575,936,460 352,852,268
basic earnings per share
2024 2023
Pence pence
Basic Earnings per share:
Loss per share from continuing and total operations 0.01 (5.0)
Weighted average number of shares for calculating 584,012,642 352,852,268
diluted earnings per share
Effects of dilution from share options 8,076,182 -
2024 2023
Pence pence
Diluted Earnings per share:
Loss per share from continuing and total operations 0.01 (5.0)
9 OTHER OPERATING GAINS
Restated
2024
2023
£’000 £’000
Loss on disposal of leases in Blade Oil V,LLC - (501)
Gain on the revaluation of the contingent liability from the 495 -
consideration of the Blade Oil V, LLC acquisition
Gain on reduction of OML 113 JV creditor - 1,456
Gain on settlement of OFX Holdings, LLC loan 138 65
(Increase)/ decrease to creditors (13) 125
Other gains 24 -
Total 644 1,145
10 Intangibles GROUP
Restated
2024
2023
£’000 £’000
Altoona exploration asset 519 644
OML 113 licence - 197
At 31 December 2024 519 841
The brought forward assets relates to the Group’s 9.2% revenue interest (12.3% cost share) in the OML 113 licence, which includes the Aje Field (“Aje”) and the further costs of bringing the Aje 4 and Aje 5 wells into production. In 2023, 32.08% share of OML 113 was purchased by a third party for a consideration of$6,000,000 . This was compared to the carrying value of the Company’s share of OML 113 of £17,899,000 and was impaired down to the corresponding value of the Company’s share of OML133, £4,803,000. A further impairment assessment was carried out and Aje was impaired by £4,606,013. In 2023, the Company purchased 100% of the membership interest ofBlade Oil V, LLC . The lease and goodwill from the acquisition has been recognised as an exploration and evaluation asset. Further details around this balance can be found in note 25. Exploration and Decommissioning Development asset evaluation asset - asset - Altoona – OML Total Altoona £’000 £’000 £’000 £’000 Cost At 1 January 2023 - - 23,719 23,719 Additions 160 484 - 644 Foreign currency exchange - - (1,122) (1,122) translation difference At 31 December 160 484 22,597 23,241 2023 At 1 January 2024 160 484 22,597 23,241 Additions - - - Altoona decommissioning (44) - (44) asset Foreign currency exchange - - 230 230 translation difference At 31 December 160 440 22,827 23,427 2024 Amortisation At 1 January 2023 - - 5,820 5,820 Charge for year - - 57 57 Impairment - - 16,843 16,843 Foreign currency exchange - - (320) (320) translation difference At 31 December - - 22,400 22,400 2023 At 1 January 2024 - - 22,400 22,400 Charge for year - - - - Impairment 81 - 202 283 Foreign currency exchange - - 225 225 translation difference At 31 December 81 - 22,827 22,908 2024 Net book value at 79 440 - 519 31 December 2024 Net book value at 160 484 197 841 31 December 2023
11 PROPERTY, PLANT AND EQUIPEMENT GROUP Acquisitions On1 June 2024 ,ADM USA acquired 100% of the equity interest ofVega Oil and Gas , LLC. The lease from the acquisition has been recognised as a property, plant and equipment asset. Further details around this balance can be found in note 25. The remaining economic life of the assets is 15 years. Developed oil & gas Decommissioning asset Total assets £’000 £’000 £’000 Cost At 1 January 2023 - - - At 1 January 2024 - - - Additions through asset acquisition of Vega Oil 660 132 792 andGas LLC (note 25) At 31 December 2024 660 132 792 Amortisation At 1 January 2023 - - - At 1 January 2024 - - - Charge for year 38 - 38 At 31 December 2024 38 - 38 Net book value at 31 622 132 754 December 2024 Net book value at 31 - - - December 2023 Property, plant and equipment assets are depleted by applying the units of production method.
12 INVESTMENT IN SUBSIDIARIESADM Energy PLC (the Company) together with its below mentioned subsidiaries are the Group. Direct investments On10 August 2016 , the Group completed the agreement for the acquisition ofJacka Resources Nigeria Holdings Limited , now renamedADM 113 Limited (“ADM 113”), a BVI registered company, in whichJacka Resources Limited (“JRL”) held the single issued share.ADM 113’s sole asset is its wholly owned subsidiary,P R Oil & Gas Nigeria Limited (“PROG”), a Nigerian registered company which holds a 9.2% revenue interest in the OML 113 licence, offshoreNigeria , which includes the Aje Field ("Aje"), where oil production commenced inMay 2016 . In 2023, the investment was impaired to nil. InApril 2021 the Group acquired 51% of the equity inK.O.N.H. (UK) Limited for a nominal fee. On1 May 2023 , the Group acquired 100% of the equity ofBlade Oil V, LLC for £668,416. Further details can be found in note 24. In 2024, Blade V was assessed for impairment, and the carrying value was written down by £201,000. 2024 2023 £’000 £’000 Balance at beginning of period 668 12,343 Acquisition of Blade V - 668 Impairment of Blade V (201) - Impairment of PROG - (12,343) Balance at end of period 467 668 The Group’s subsidiary companies are as follows: Country of Proportion of incorporation ownership interest and Name Principal activity and principal voting rights place of business held by the Group British Virgin Islands Maples Corporate Services (BVI) Ltd 100% of ADM 113 Limited Holding company ordinary Kingston Chambers shares P.O. Box 173, Road Town, Tortola Nigeria 100% of PR Oil & Gas Nigeria Oil exploration & 1, Murtala Muhammed ordinary Limited production Drive shares Ikoyi, Lagos 60 Gracechurch Street, K.O.N.H. (UK) London, 51% of Limited Dormant ordinary United Kingdom, EC3V shares 0HR Mexico Lago Alberto 319, Piso 6 IZA Punto 100% of Geo Estratos MXOil, Dormant ordinary SAPI de CV Col. Granada, Del. shares Miguel Hidalgo CP 11520, Ciudad de Mexico 60 Gracechurch Street,ADM Asset Holdings London, 100% of Limited Dormant ordinary United Kingdom, EC3V shares 0HR 60 Gracechurch Street, London, 100% of ADM 113 One Limited Dormant ordinary United Kingdom, EC3V shares 0HR 60 Gracechurch Street, ADM Energy Services London, 100% of Limited Dormant ordinary United Kingdom, EC3V shares 0HR 4001 Shady Valley 100% ofADM Energy USA Inc Dormant Court, Arlington, ordinary Texas 76013 shares Oil exploration & 4001 Shady Valley 100% of Blade Oil V, LLC production Court, Arlington, ordinary Texas 76013 shares 100% of 5944 Luther Lane, ordinary Vega Oil and Gas LLC Oil exploration & Suite 400 Dallas, shares production Texas 75255 (acquired 18 June 2024) 66% of the SW Oklahoma Oil exploration & 10300 Greenbriar voting rights Reclamation, LLC production Place, Oklahoma City, OK 73159 (acquired 1 January 2024)
13 INVESTMENT IN ASSOCIATES
OFX Technologies, LLC SW Oklahoma Reclamation, LLC Total
£’000 £’000 £’000
Cost
At 1 January 2023 - - -
Additions 1,085 - 1,085
At 31 January 2023 1,085 - 1,085
At 1 January 2024 1,085 - 1,085
Additions 6 365 371
At 31 December 2024 1,091 365 1,456
Amortisation
At 1 January 2023 - - -
At 1 January 2024 - - -
Charge for year (924) - (924)
At 31 December 2024 (924) - (924)
Net book value at 31 167 365 532
December 2024
Net book value at 31 1,085 - 1,085
December 2023
On1 November 2023 , the Group acquired 53% of the equity ofOFX Technologies, LLC for £1,085,000. Of this amount, £860,355 was recognised as share consideration for 86,035,489 ordinary shares of 1p each. The shareholding subsequently diluted to 46.8% and then reduced further during the year to 42.2% and a dilution of £50,000 was recognised. A further capital contribution of £120,000 was subsequently made. Management considered if any impairment was required and the carrying value of the investment was written down by £924,000. By virtue of its shareholding,ADM owned 42.2% of the voting rights of OXFT, which reduced from 46% during the year due to a dilution in the investment and 40% of the non-voting right. Therefore, the investment inOFX Technologies, LLC has been recognised as an associate using the equity method of accounting. 2024 Restated 2023 £’000 £’000 Balance at beginning of period 1,085 - Investment in OFX Technologies, LLC 120 1,085 Share of loss of OFX Technologies, LLC (64) - Dilution of investment inOFX Technologies, LLC (50) - Impairment of OFX Technologies, LLC (924) - Balance at end of period 167 1,085
The following table illustrates the summarised financial informationOFX Technologies, LLC share in EOS: 2024 2023 £’000 £’000 Non current assets 59 59 Non current liabilities (264) (264) Equity (205) (54) - (89) (25) Goodwill 1,110 1,110 Investment 120 - Dilution of investment in OFX (50) - Technologies, LLC Impairment of OFX Technologies, LLC (924) Carrying value of investment 167 1,085 2024 2023 £’000 £’000 Share of loss of associate (151) - Total comprehensive income for the year (151) - (continuing operations) Group’s share of loss for the year (64) - The Director’s considered if the investment required an impairment assessment.OFX Technologies, LLC acts as a holding company forEfficient Oil Solutions, LLC which is a revenue generating software-as-a-service company. The directors completed a valuation exercise and determined thatEfficient Oil Solutions, LLC has a minimum valuation which is less than the carrying value of the investment recognised by the Group. As such, management has impaired the investment inOFX Technologies, LLC by £924,000 (2023:nil). The Group’s associate companies are as follows: 4001 Shady Valley Court, 42.2% of OFX Technologies, LLC Holding company Arlington, Texas 76013 ordinary shares * Efficient Oilfield Oil exploration & 4001 Shady Valley Court, 100% of Solutions, LLC production Arlington, Texas 76013 ordinary shares 40% of ordinary Oil exploration & 2505 Meadow Hills Lane, shares * JKT Reclamation, LLC production Plano, Texas 75093 (acquired 1 January 2024) *Indirectly held
Indirect investments On5 April 2024 ,ADM USA acquired 100.0% of the Class A membership ofSW Oklahoma Reclamation, LLC , a company established as a joint venture withBargo Capital, LLC to reinitiate operations at the JKT Reclamation facility inWilson, Oklahoma . The acquisition has been accounted for as an asset acquisition. SW Oklahoma Reclamation, LLC’s sole asset is a 60% investment inJKT Reclamation, LLC and in turn, the Group owns 40% of this investment, therefore the Group has recognised the investment inJKT Reclamation, LLC as an associate in the Consolidated Statement of Financial Position. The Group’s share of JKT Reclamation, LLC’s loss for the year of £295,352 has been recognised in the loss for the year. Further details can be found in note 26. 2024 2023 £’000 £’000 Balance at beginning of period - - Acquisition of SW Oklahoma Reclamation, LLC 660 - Share of loss of JKT Reclamation, LLC (indirectly held through (295) -SW Oklahoma Reclamation, LLC ) Balance at end of period 365 - The following table illustrates the summarised financial information of the Group’s investment in inJKT Reclamation, LLC : 2024 2023 £’000 £’000 Non current assets 919 - Non current liabilities (1,373) - Equity (454) - Groups share in equity (40%) (182) - Goodwill 547 - Carrying value 365 - 2024 2023 £’000 £’000 Revenue 224 - Cost of sales (228) - Administrative expenses (735) - Total comprehensive income for the year (continuing (738) - operations) Group’s share of loss for the year (295) -
14 TRADE AND OTHER RECEIVABLES
GROUP COMPANY
2024 2023 2024 2023
£’000 £’000 £’000 £’000
Other receivables 13 13 13 13
Amounts due from associates 278 - 171 -
Intercompany loan - - 336 -
Prepayments and accrued income - 5 - 5
291 18 520 18
The fair value of other receivables is considered by the Directors not to be materially different to carrying amounts. At the date of the Statement of Financial Position in 2024 and 2023 there were no trade receivables.
15 CASH AND CASH EQUIVALENTS
GROUP COMPANY
2024 2023 2024 2023
£’000 £’000 £’000 £’000
Cash at bank - - - -
Cash and cash equivalents - - - -
16 TRADE AND OTHER PAYABLES
GROUP COMPANY
2024 Restated 2023 2024 Restated 2023
CURRENT PAYABLES £’000 £’000 £’000 £’000
Trade payables 968 668 968 660
Tax and social security 200 227 200 227
Other payables 21 29 30 30
Short term loan finance 858 155 250 155
Accruals 450 594 418 563
Contingent consideration - 495 - 495
2,497 2,168 1,866 2,130
NON-CURRENT PAYABLES
Amount owed in respect of OML 113 1,482 1,303 - -
operating agreement
Long term loan finance 839 283 355 282
2,321 1,586 355 282
Total current and non current 4,818 3,754 2,221 2,412
payables
It is expected that the amount owed in relation to the Group’s proportionate share of costs incurred as part of the OML 113 joint operating agreement will be offset against net revenues of the project.
The long term loan finance from
The long term loan also includes a secured loan between
Various new short term loans have been entered into during the year. Only £101,000 of these loans are accruing interest.
The remaining loans are unsecured.
The fair value of trade and other payables is considered by the Directors not to be materially different to carrying amounts.
17 BORROWINGS Convertible loans (“CLNs”) On25 May 2023 , the Company issued secured convertible loan notes for up to$1,500,000 . The loan notes carry an interest rate of 15% per annum. Other key terms of the secured convertible loan notes are as follows: -- Date of maturity of 3 years -- Repayment in cash on the maturity date -- Conversion can take place at any time at 1p per share -- 12 months after completion, the loan will convert up to 29.9% of the Company’s total shares -- The loan is unsecured During the year £196,000 (2023: £450,000) proceeds were recognised from the issue of the CLN’s under the same terms. The net proceeds received from the issue of the CLNs have been split between the liability element and an equity component, representing the fair value of the embedded option to convert the liability into equity of the Group, as follows: GROUP AND COMPANY 2024 2023 £’000 £’000 Liability component at 1 January 510 - Net proceeds received from issue of CLN 196 481 Equity component (4) (41) Interest charged 101 70 Repayments - - Liability component at 31 December 803 510 Current portion of loans 803 510 Non-current portion of loans - - 803 510 The interest charged for the year is calculated by applying an effective average interest rate of 16% to the liability component for the period since the loan notes were issued. Other borrowings 2024 Restated 2023 £’000 £’000 Other loans (current) 344 285 Other loans (non-current) - 376
£344,153 (2023: £285,000) of other borrowings is non-interest bearing and its repayment date was
18 DECOMMISSIONING PROVISION
In accordance with the agreements and legislation, the wellheads, production
assets, pipelines and other installations may have to be dismantled and
removed from oil and natural gas fields when the production has ceased. The
exact timing of the obligations is uncertain and depends on the rate the
reserves of the field are depleted. However, based on the existing
production profile of the OML 113 licence area and the size of the reserves,
it is expected that expenditure on retirement is likely to be after more
than ten years. The current basis for the provision is a discount rate of
2.67% (2023: 2%), which is the risk free rate adjusted to remove inflation
to be a real rate.
The following table presents a reconciliation of the beginning and ending
aggregate amounts of the obligations associated with the decommissioning of
oil and natural gas properties
Group
2024 Restated 2023
£’000 £’000
Balance brought forward 5,943 5,627
Decrease due to changes to cost estimates (OML 113) (2,506) (188)
Arising during the year (Vega) 138 -
Arising during the year (Altoona) - 484
Effect of unwinding and changes to discount rate 23 20
Foreign currency exchange translation difference (204) -
As at 31 December 3,394 5,943
19 CALLED UP SHARE CAPITAL (GROUP AND COMPANY)
Number of Total
Value Number of Value Share Premium
Ordinary value
£’000 deferred shares £’000 £’000
shares £’000
Issued and fully
paid
At 1 January
2023 (ordinary 297,147,530 2,972 8,222,439,370 8,222 11,194 38,090
shares of 1p)
Shares issued 187,791,081 1,878 - - 1,878 146
At 31 December 484,938,611 4,850 8,222,439,370 8,222 13,072 38,236
2023
Shares issued
(see notes 142,925,200 1,429 - - 1,429 -
below)
At 31 December 627,863,811 6,279 8,222,439,370 8,222 14,501 38,236
2024
The deferred shares have restricted rights such that they have no economic
value.
Share issues in the year ended 31 December 2024
On 8 April 2024 , 43,200,000 ordinary shares of 1p each were issued as
consideration for the investment in SW Oklahoma Reclamation, LLC for a total
of £432,000.
On 8 April 2024 , 36,450,000 ordinary shares of 1p each were issued as
settlement of certain outstanding trade and other creditors, for a total of
£364,500.
On 26 June 2024 , 63,275,200 ordinary shares of 1p each were issued in
exchange for the conversion of outstanding contractual liabilities, for a
total conversion of £632,752 debt to equity.
Share issues in the year ended 31 December 2023
On 25 May 2023 , 15,714,667 ordinary shares of 1p each were issued at 1.2p as
consideration for the investment in Blade Oil V, LLC , for a total of
£188,576.
On 25 May 2023 , 56,926,417 ordinary shares of 1p each were issued at 1.2p in
exchange for the conversion of outstanding contractual liabilities, for a
total conversion of £683,117 debt to equity.
On 14 November 2023 , 29,114,508 ordinary shares of 1p each were issued as
settlement of certain outstanding trade and other creditors, for a total of
£291,145.
On 29 November 2023 , 86,035,489 ordinary shares of 1p each were issued as
consideration for the investment in OFX Technologies, LLC , for a total of
£860,355.
20 OTHER RESERVES (GROUP AND COMPANY)
Reserve for options/ Convertible loan note Other reserves
warrants issued reserve
£’000 £’000 £’000
Balance at 31 943 19 962
December 2022
Issue of options 18 - 18
Issue of warrants 15 - 15
Convertible loan
note equity reserve - 10 10
restated
Balance at 31
December 2023 976 29 1,005
restated
Options lapsed (14) - (14)
during the year
Options vesting 5 - 5
during the year
Warrants vesting 16 - 16
during the year
Convertible loan - 4 4
note equity reserve
Balance at 31 983 33 1,016
December 2024
21 SHARE OPTIONS & WARRANTS (GROUP AND COMPANY) Options and Warrants issued during the year ended31 December 2024 No new options or warrants were issued during the year ended31 December 2024 Options issued during the year ended31 December 2023 On25 May 2023 , the Company issued 44,374,630 share options to Directors and employees. The options are exercisable at 1.2p per share for a period of 5 years from the date of issue. Warrants issued during the year ended31 December 2023 On1 November 2023 , the Company issued 39,959,017 investor warrants and 16,000,000 incentive warrants. The warrants are exercisable at 1p per share for a period of 3 years from the date of issue. On9 November 2023 , the Company issued 34,410,000 warrants in respect of the debt restructure. The warrants are exercisable at 1.5p per share for a period of 3 years from the date of issue. The fair value of the share options and warrants at the date of issue was calculated by reference to the Black-Scholes model. The significant inputs to the model in respect of the warrants issued in the year were as follows: 25 May 1 November 9 November 26 Issue date 2023 2023 2023 January 2022 Issue date 0.68p 0.5p 0.5p 1.11p share price Exercise price 1.2p 1p 1.5p 4.5p per share No. of 15,300,0 options/ 44,374,630 55,959,017 34,410,000 00 warrants Risk free rate 2% 2% 2% 1% Expected 50% 50% 50% 50% volatility Expected life of 5 years 3 years 3 years 2 years option/warrant Calculated fair value per 0.1968p 0.076p 0.038p 0.0144p share The share warrants outstanding at31 December 2024 and their weighted average exercise price are as follows: 2024 2023 Weighted Weighted average average exercise price exercise price Number (pence) Number (pence) Outstanding at 1 January 128,445,3892.99 38,076,372 2.27 Issued - - 97,369,017 0.72 Lapsed or cancelled - - (7,000,000) - Outstanding at 31 December 128,445,3892.99 128,445,389 2.99
The fair value of the share warrants recognised as part of the premium paid in respect of the share subscriptions in 2023 was £15,586. This amount was credited to the share warrant reserve and of this £10,175 was recognised in the profit and loss account as these warrants were issued in exchange for credit facility fees.
The share options outstanding at31 December 2024 and their weighted average exercise price are as follows: 2024 2023 Weighted average Weighted average exercise price exercise price Number (pence) Number (pence) Outstanding at 1 44,374,630 1.2 - - January Issued - - 44,374,630 1.2 Lapsed or cancelled (36,298,448) - - - Outstanding at 31 8,076,182 1.2 44,374,630 1.2 December
22 RISK MANAGEMENT OBJECTIVES AND POLICIES
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are:
-- to safeguard the Group's ability to continue as a going concern, so
that it continues to provide returns and benefits for shareholders;
-- to support the Group's growth; and
-- to provide capital for the purpose of strengthening the Group's risk
management capability.
The Group actively and regularly reviews and manages its capital structure
to ensure an optimal capital structure and equity holder returns, taking
into consideration the future capital requirements of the Group and capital
efficiency, prevailing and projected profitability, projected operating cash
flows, projected capital expenditures and projected strategic investment
opportunities. Management regards total equity as capital and reserves, for
capital management purposes.
The Group is exposed to a variety of financial risks which result from both
its operating and investing activities. The Group’s risk management is
coordinated by the board of directors, and focuses on actively securing the
Group’s short to medium term cash flows by minimising the exposure to
financial markets.
Management review the Group’s exposure to currency risk, interest rate risk,
liquidity risk on a regular basis and consider that through this review they
manage the exposure of the Group on a near term needs basis
There is no material difference between the book value and fair value of the
Group’s cash.
MARKET PRICE RISK
The Group’s exposure to market price risk mainly arises from potential
movements in the fair value of its investments. The Group manages this price
risk within its long-term investment strategy to manage a diversified
exposure to the market. If each of the Group’s equity investments were to
experience a rise or fall of 10% in their fair value, this would result in
the Group’s net asset value and statement of comprehensive income increasing
or decreasing by £99,800 (2023: £185,000).
INTEREST RATE RISK
The Group and Company manage the interest rate risk associated with the Group’s
cash assets by ensuring that interest rates are as favourable as possible,
whilst managing the access the Group requires to the funds for working capital
purposes.
The Group’s cash and cash equivalents are subject to interest rate exposure due
to changes in interest rates. Short-term receivables and payables are not
exposed to interest rate risk.
CREDIT RISK
The Group's financial instruments, which are exposed to credit risk, are
considered to be mainly loans and receivables, and cash and cash equivalents.
The credit risk for cash and cash equivalents is not considered material since
the counterparties are reputable banks. The maximum exposure to credit risk
for loans and receivables is as set out in the table below, and relates to the
financing of the Group’s joint venture interests.
The Group's exposure to credit risk is limited to the carrying amount of the
financial assets recognised at the balance sheet date, as summarised below:
2024 2023
£’000 £’000
Cash and cash equivalents - -
Loans and receivables 13 13
13 13
LIQUIDITY RISK
Liquidity risk is managed by means of ensuring sufficient cash and cash
equivalents are held to meet the Group’s payment obligations arising from
administrative expenses. The cash and cash equivalents are invested such that
the maximum available interest rate is achieved with minimal risk. Liquidity
risk is managed by means of ensuring sufficient cash and cash equivalents are
held to meet the Group’s payment obligations arising from administrative
expenses. The cash and cash equivalents are invested such that the maximum
available interest rate is achieved with minimal risk. In the current
financial year and subsequent to the year end the Group has been carefully
managing limited cash flows to ensure that working capital commitments can be
met. Crucial to this is additional funding secured to ensure the continued
going concern of the Group. Further details of this are included in the going
concern accounting policy on page 35.
23 FINANCIAL INSTRUMENTS The Group uses financial instruments, other than derivatives, comprising cash to provide funding for the Group's operations. FINANCIAL ASSETS AND LIABILITIES AT AMORTISED COST: The IFRS 9 categories of financial liabilities included in the statement of financial position and the headings in which they are included are as follows:
Group Group Company Company
2024 Restated 2023 2024 Restated 2023
Financial Liabilities at amortised £’000 £’000 £’000 £’000
cost
Trade and other payables 4,368 3,284 1,803 2,042
Borrowings 839 793 355 793
Group Group Company Company
2024 2023 2024 2023
Financial assets at amortised cost £’000 £’000 £’000 £’000
Trade and other receivables 13 18 13 18
Amounts due from associates 278 - 171 -
Intercompany loan - - 336 -
Cash & Cash equivalents - - - -
The following table details the Group’s remaining contractual
maturity for its non-derivative financial liabilities with
agreed repayment periods. The table has been drawn up based on
the undiscounted cash flows of financial liabilities based on
the earliest repayment date on which the Group can be required
to pay. The table includes both interest and principal cash
flows. To the extent that interest flows are floating rate, the
undiscounted amount is derived from the interest rate curves at
the balance sheet date. The contractual maturity is based on the
earliest date on which the Group may be required to pay.
Less than 1-3 3 months 1-5 Over 5
1 month months to 1 year years years
£’000 £’000 £’000 £’000 £’000
2024
Interest bearing:
Trade and other payables - - 101 838 -
Borrowings - - 803 344 -
Non-interest bearing:
Borrowings - - - - -
Trade and other payables - - 2,394 1,482 -
2023
Interest bearing:
Trade and other payables - - 115 282
Borrowings - - 510 284 -
Non-interest bearing:
Borrowings - 376
Trade and other payables - - 2,052 1,303 -
As at
24 Contingent LIABILITIES (GROUP) OML 113 joint agreement The Group recognises a liability in respect of its participation in the OML 113 Joint Operating Agreement. The liability disclosed in these accounts is based on a reconciliation of the amounts owed under the operating agreement entered into by the Group and other participators in the OML 113 operation. The reconciliation is based on returns and reconciliations provided by the project’s operator, which references the Group’s share of revenue received and costs incurred.
25 ACQUISITION (GROUP) Acquisitions in 2023Blade Oil V, LLC On25 May 2023 , the Company purchased 100% of the membership interest ofBlade Oil V, LLC fromOFX Holdings, LLC . Blade Oil V,LLC has five on-shore US oil leases. The total consideration payable was £999,208. This comprised ofUS$235,720 (£188,576) financed via the issuance of 15,714,667 new ordinary shares at a price of 1.2p per share,US$235,720 (£190,557) loan note issued byADM Energy USA , the issue of warrants over 7 million ordinary shares in the Company and contingent deferred consideration of £618,432. On9 November, 2023 , the Company returned all of the leases with the exception of the Altoona lease toOFX Holdings, LLC . The total consideration was reduced by the cancellation ofUS$250,000 of debt obligations owed toOFX Holdings, LLC ., the reduction of the contingent deferred consideration ofUS$150,000 and the 7 million warrants were terminated. After returning the leases, the investment inBlade Oil V, LLC reduced by £836,047. In accordance with IFRS 3, the Group conducted a Purchase Price Allocation (PPA) analysis to split out separately identifiable assets from acquired goodwill. Upon completing this analysis, the Group acknowledged a £161,926 decrease to goodwill and a corresponding uplift in exploration assets. On8 April 2024 , the remaining contingent payment was waived, and therefore the value of the investment reduced. The following table summarises the consideration paid for Blade Oil V,LLC and the fair values of the assets and equity assumed at the acquisition date and then after the remaining leases were returned and after the contingent consideration was waived: £ Total proceeds from share issue 188,576 Total proceeds from loan facility 190,557 Total proceeds from warrants issue 1,643 Total proceeds from contingent liability 618,432 Less proceeds from warrants terminated (1,643) Less reduction on loan facility (156,326) Less reduction in total consideration due (49,366) Less reduction in contingent liability (123,416) Total consideration payable as at31 December 2023 668,457 Recognised assets and liabilities acquired: Intangible assets – Exploration asset 41,900 Altoona lease 121,261 Other leases 505,296 Decommissioning asset 484,000 Decommissioning provision (484,000) Total identifiable net assets 668,457Goodwill as at31 December 2023 - Acquisitions in 2024Vega Oil and Gas, LLC (“Vega”) On1 June 2024 ,ADM USA acquired 100% of the equity interest ofVega Oil and Gas, LLC . No consideration was transferred to the seller in respect of the acquisition, ratherADM USA committed an investment into Vega of$150,000 . The acquisition has been accounted for as an asset acquisition, using the concentration test method. The gross assets acquired have been valued equal to the consideration of the transaction, as follows: Gross value £ Property, plant and equipment 660,464 Cash and cash equivalents 621 Trade & other receivables 77,803 Trade & other payables (621,085) Decommissioning asset 132,000 Decommissioning provision (132,000) Net assets 117,803 Consideration transferred 117,803SW Oklahoma Reclamation, LLC (“SWOK”) On5 April 2027 ,ADM USA acquired 100.0% of the Class A membership ofSW Oklahoma Reclamation, LLC . The Company owns 66.6% of the voting rights of SWOK and has control over SWOK by virtue of its shareholding. Consideration for the investment comprises the issue of 43,200,000 new ordinary shares at a nominal price of 1.0p per share and a cash investment ofUS$287,500 . SWOK owns 60% ofJKT Reclamation, LLC , thus the group indirectly owns 40%. The investment in SWOK is recognised at the fair value of the consideration payable: The carrying value of the investment is determined as the percentage share of the net assets acquired including goodwill and the subsequent loss for the year which has been detailed in note 13. £ 43,200,000 ordinary shares at 1p each 432,000 Initial cash consideration 228,157 Total consideration 660,157 Whilst the underlying business of SWOK,JKT Reclamation, LLC , clearly meets the definition of a business given that this is revenue generating and fully operational, SWOK does not. SWOK is a holding company that has been purchased byADM USA to benefit from the distributions ofJKT Reclamation, LLC . Thus, the acquisition is deemed to be an asset acquisition, by virtue ofADM USA essentially purchasing the investment SWOK holds inJKT Reclamation, LLC . The investment will be accounted for as an associate, in line with ADM USA’s indirect holding percentage ofJKT Reclamation, LLC , being 40%. Details of the acquisition are as follows: £ Investment recognised on acquisition 660,157JKT Reclamation, LLC loss for the period (295,352) Investment in associate as at31 December 2024 364,805 The Director’s considered if the investment suffered any impairment at the year end.SW Oklahoma Reclamation, LLC acts as a holding company forJKT Reclamation, LLC which is a revenue generating waste oil recycling company that receives sellable oil. Since the investment,JKT Reclamation LLC has been sharing a portion of its excess cash with the group. Management have forecast positive cashflows through to 2030 and have prepared a value in use prediction which exceeds the carrying value of the investment recognised at the year end. The calculations have been based on a cost of capital of 15% and terminal growth rate of 0%. Management have satisfied themselves that the investment balance should not be impaired.
26 RELATED PARTY TRANSACTIONS (GROUP) The remuneration of the Directors, who are key management personnel of the Group, is set out in the report on Directors’ Remuneration.OFX Holdings, LLC OFX Holdings, LLC is a substantial shareholder of the Company.Stefan Olivier (resigned21 February 2025 ) andClaudio Coltellini are nominee directors forOFX Holdings, LLC . 2024 On25 January 2024 ,OFX Holdings, LLC loaned$75,000 (£59,015) to the Company. On8 April 2024 the contingent consideration payment of £494,975 due fromBlade Oil V, LLC toOFX Holdings, LLC was waived. On26 June 2024 ,OFX Holdings, LLC discounted and converted £270,752 of the outstanding loan with the company to 27,075,200 ordinary shares. On the same date, the remaining balance of £141,254 withOFX Holdings, LLC was agreed to be waived. 2023 On25 May 2023 , the Company purchasedBlade Oil V, LLC fromOFX Holdings, LLC . The details of this transaction are in note 25. On the same date, the Company entered into a ‘USA loan facility’ agreement withOFX Holdings, LLC , for$235,720 (£190,557) at 9% interest per annum. A secured convertible loan note was issued toOFX Holdings, LLC for a total of$250,000 (£209,410). On 9November 2023 ,OFX Holdings, LLC discounted and converted$275,000 (£226,000) of the outstanding loan with the company to 15,820,000 ordinary shares for a total of £158,200 and 7,910,000 3 year warrants, resulting in a gain to the company of £65,024 (note 9). A further 26,500,000 warrants of 1.5p each with an expiry date of 3 years were issued toOFX Holdings, LLC . On14 November 2023 , the remaining loan amounts of £352,990 outstanding withOFX Holdings, LLC was consolidated onto one loan agreement with a 15% interest rate per annum and a maturity date of31 December 2025 . On29 November 2023 , the company acquired 53.1% of the economic interest inOFX Technologies, LLC fromOFX Holdings, LLC for a total consideration of £801,553, made up 79,918,033 shares are 1p each, 39,959,017 restricted warrants at 1p each with a 3 year term, and a further 16 million incentive warrants at the same price and terms.Efficient Oilfield Solutions, LLC 2024Efficient Oilfield Solutions, LLC is a 100% owned subsidiary ofOFX Technologies, LLC . During the year, the Company loanedEfficient Oilfield Solutions, LLC £158,366.ADM Energy USA, Inc loanedEfficient Oilfield Solutions, LLC $25,620 (£20,439). Both of these loans are payable on demand and do not accrue any interest. There were no transactions withEfficient Oilfield Solutions, LLC in 2023. Directors 2024 LordHenry Bellingham loaned the Company £5,580 to settle the Company’s trade payables. The balance due toLord Henry at the year end is £66,250.Claudio Coltellini is a director of bothUS Oil Consulting LLC andAtlantic Bridge Energy. During the yearUS Oil Consulting LLC loaned the Company$207,503 (£158,093) to cover the Company’s trade payables andAtlantic Bridge Energy loaned the Company$26,213 (£20,867) to cover the Companies trade payables. Claudio is also a Director Concepta, which the Company owes £191,941 to at the year end. Another Company, Cantera, that Claudio is also a Director of is due £8,564 at the year end by the Company. DrStefan Liebing is a director ofConjucta GmbH .Conjucta GmbH made a loan of £10,000 to the Company. The loan is accruing 15% interest per annum. The loan will be repaid at the earlier of31 December 2025 or at the closing and funding of a significant capital transaction. Dr Stefan’s director fees are paid throughConjucta Gmbh . The balance due toConjucta Gmbh at the year end is £38,716.Randall Connally became a director of the Company post year end. At the year end there is an amount of £158,158 due toVentura Energy Advisors LLC , a company that Randall is a Director of. 2023 On25 May 2023 , the Company issued a secured convertible loan note toOliver Andrews , who was a director of the Company during the year, for a total of$100,000 (£78,905). On the same date, £100,000 of ordinary shares were issued toOliver Andrews in exchange for his services to the Company during the year. On25 May 2023 , ordinary shares of 1p each were issued toStefan Olivier andRichard Carter as an incentive, for £50,000 to each of them.
27 ULTIMATE CONTROLLING PARTY
-- The Directors do not consider there to be a single ultimate
controlling party.
28 POST PERIOD END EVENTS On21st February 2025 ,Stefan Olivier resigned as CEO andClaudio Coltellini was reappointed as non executive director (he resigned inDecember 2024 ). On18 March 25 , the company raised £274,000 through the issue of 274,000,000 new ordinary shares and £313,000 was raised through subscription shares, both of0.1pence each. A total of 109,995,000 consideration shares were then issued toVentura Energy Advisors, LLC (a related party of the Company) for an additional 20% Class B interest inSW Oklahoma Reclamation, LLC . The additional 20% interest in SWOK represents an additional 5.9% economic interest inJKT Reclamation, LLC .ADM USA additionally acquired a further 7.8% share inJKT Reclamation, LLC . On the same day, 240,474,000 new ordinary shares of0.1 pence each were issued to various of the Company’s creditors in order to settle £240,474 of its outstanding debts. On25 March 2025 ,Randall Connally was appointed as CEO of the Company. On27 March 2025 , the Company settled outstanding amounts of £78,000 owed to two employees via the issue of 73,844,333 new ordinary shares of0.001 pence . On the same day, the Company settled the arrangement fee owed toCatalyse Capital Ltd via the issue of 30,000,000 new Ordinary Shares at the Issue Price of0.1 pence per new Ordinary Share. On1 April 2025 ,Altoona JV, LLC ("AJV") became a whole owned subsidiary ofVega Oil and Gas, LLC by assignment of the membership interest in AJV fromAtlantic Bridge Energy, Inc. ("ABE"), a related party of the Company (Company non-executive director,Claudio Coltellini is also a director of ABE). The assignment was completed to allow VOG to better manage the operations of the Altoona Lease inKern County, California . On29 April 2025 , the Company settled an outstanding debt of £20,000 owed to a creditor via the issue of 20,000,000 new ordinary shares of0.001 pence each. Another creditor amount of £37,697.50 was settled by the Company on 20May 2025 , via the issue of 37,697,500 new ordinary shares of0.001 pence . Prior to31 December 2025 , the Company formed a new wholly owned subsidiary,Vega Energy USA, Inc , aTexas corporation ("VEUSA") in anticipation of completing a financing transaction. Prior to giving effect to the terms of the financing (described below), the Company held 1,319,931 shares of common stock (no par value) in VEUSA. Both as (i) a condition precedent of the contemplated financing transaction and (ii) in line with the business objectives of the Company, VEUSA also incorporatedEco Oil Disposal, LLC . Pursuant to the Formation Agreement ofEco Oil Disposal, LLC ("EOD"), the Company holds a 60% voting and equity interest in EOD. Until EOD has made distributions to VEUSA equal to (i) 100% of VEUSA's capital contributions; and (ii) a 12% preferred return thereon, VEUSA will receive 80% of the profit distributions of EOD. Mr.Freddy Nixon , the CEO of EOD, and Mr.Kenny Bounds each hold a 20% voting and equity interest in EOD. EOD further acquired 100% of the membership interest of JKTWilson, LLC fromJKT Reclamation, LLC in a transaction valued atUS$868,000 (the "Purchase Price"). Consideration for the Purchase Price comprised: a.US$180,000 in cash funded by VEUSA from the VEUSA Financing (see below). b.US$400,000 via issuance (at the earliest date permissible) of 296,296,296 ordinary shares ofADM Energy PLC at a nominal share price of 0.1p per share (with an effective exchange rate ofUS$1.35 perGBP1.00 ). The issuance of the shares by the Company on behalf of VEUSA (as part of the Purchase Price) will be treated as an equity investment by the Company in VEUSA and VEUSA will receive credit for the issuance of the shares in its Capital Account in EOD. c. The assumption by EOD ofUS$228,000 of indebtedness ofJKT Reclamation, LLC . VEUSA will be credited with a total capital contribution to EOD ofUS$580,000 and will therefore be entitled to receive 80% of distributable profits until this amount - and a 12% preferred return on investment - are paid to VEUSA by EOD. VEUSA will also be paid a one-timeUS$50,000.00 Funding Fee by EOD and will earn aUS$15,000 per month Administrative Fee to be paid by EOD prior to determination of distributable profits of EOD. InJanuary 2026 VEUSA completed a senior secured financing (the "VEUSA Financing") withShoreline Energies, LLC (the "Lender"). The VEUSA Financing is structured as a 5-year,US$1 million loan with an interest rate of 12.0% per annum. During the first year the loan is interest only with interest payments made quarterly in arrears. Starting in the second year the loan has even, monthly amortisation payments until maturity. The Company is a guarantor of the VEUSA Financing and has entered into a share pledge of the share capital of VEUSA andADM 113 Limited (BVI), the entity which holds the equity capital ofPR Oil & Gas (Nigeria) Limited , the owner of a 12.3% cost share and 9.2% profit share in OML-113,Aje Field . The terms of the loan include a restricted payment provision whereby VEUSA is not permitted to make any dividend or other payments to the Company without the express permission (at the sole discretion) of the lender. As part of the transaction, the Lender will be paid a Funding Fee ofGBP100,000 that will be settled via the issuance of 100,000,000 ordinary shares of the Company at a nominal share price of 0.1p and was also issued five year warrants to purchase 1,373,806 shares of common stock of VEUSA at an exercise price ofUS$0.72791 per share. If fully exercised the Lender would own 51.0% of the outstanding shares of common stock of VEUSA. Additionally, the Company has entered into a Share Exchange Agreement with the Lender whereby the 1,373,806 shares of common stock of VEUSA may be exchanged (in whole or in part) for ordinary shares of the Company anytime for a period of five years at an Exchange Ratio of 2,000 ordinary shares of the Company for every one share of VEUSA. The only limitation on the exchange of shares by the Lender will be that any exchange of shares shall not result in Lender exceeding the thresholds associated with Rule 9 of the Takeover Code. The value of the VEUSA shares at the time of the exchange will be determined based upon a third-party valuation to be commissioned prior to any future exchange. The Company has also entered into a financing agreement withConcepta Consulting AG (the "Concepta Financing"). Pursuant to the terms of the Concepta Financing, Concepta has funded approximatelyUS$345,000 in expenses, investment commitments and other payments on behalf of the Group. Concepta will be repaid 120% of the amount funded in cash and will receive a one-time restructuring and funding fee ofGBP100,000 to be settled in ordinary shares via issuance of 100,000,000 ordinary shares of the Company at a nominal share price of 0.1p per share.The Board of the Company has agreed to a Consultancy Fee ofGBP100,000 to be paid to former Executive Director,Stefan Olivier , associated with his service in completing certain debt reprofile agreements and other services associated with the VEUSA Financing.The Board of the Company has further agreed to a bonus ofGBP100,000 to be paid toUS Oil Consulting, LLC (owned by director,Claudio Coltellini ) in consideration for his extraordinary service to the Company. The bonus will be paid by issuance of 100,000,000 ordinary shares at a nominal share price of 0.1p per share.Henry Bellingham , non-executive director of the Company has agreed to settleGBP50,000 in accrued and unpaid fees due at year end for 50,000,000 ordinary shares and certain employees ofADM Energy USA, Inc. have agreed to accept 30,000,000 ordinary shares in lieu of accrued and unpaid salary obligations. Finally, the Board has awarded executive director,Randall J. Connally , 152,769,124 ordinary shares in lieu of cash compensation for the year-ending31 December 2025 . Taking into account all of the post-period share transactions to be undertaken by the Company, the enlarged share capital of the Company will be 2,655,940,065 ordinary shares upon completion of the post-period share transactions. If the VEUSA warrants were fully exercised and exchanged (subject to a white wash in compliance with Rule 9 of the Take Over Code), the Lender would - together with the 100,000,000 shares issued as a Funding Fee - own 2,847,611,088 ordinary shares of the Company resulting in total ordinary shares outstanding of 5,583,551,152 and representing a 51.0% interest in the Company.
