ADM Energy PLC has executed subscription agreements with two investors, resulting in gross proceeds of 220,500 at 1p per share. The company intends to use the proceeds to fund the cash requirements of a new investment and for general working capital purposes. In conjunction with the subscription, ADM has acquired an interest in SW Oklahoma Reclamation, LLC, a joint venture with Bargo Capital, LLC, to reinitiate operations at the JKT Reclamation facility in Wilson, Oklahoma. The investment will result in the issuance of 43,200,000 ordinary shares at a nominal share price of 1p per share, a cash investment of US$287,500 for working capital into JKT Reclamation, and the grant of 14,640,000 3-year, 1.0p warrants.
The company has acquired its interest in SWOK from Bargo Capital, LLC and OFX Holdings, LLC, a substantial shareholder of the company. The effective date of the investment is 1 January 2024, and it is expected to be immediately cash flow generative to the company. Additionally, ADM Energy PLC announces the termination of the remaining contingent payment obligations associated with the acquisitions of the Blade Oil V, LLC assets.
The JKT Reclamation facility, located outside Wilson, Oklahoma, includes a workshop/office structure, storage tanks, separation and heating tanks, proprietary chemical formulae, and various other processing and material handling equipment. JKT Reclamation sold 944 barrels of crude oil in February 2024 and received US$68,759 in gross revenue. The investment consideration represents approximately twice JKT Reclamation's forecast annualized cash flow based on the directors' estimates of JKT Reclamation achieving its sales target of 3,000 barrels of crude oil per month.
ADM has entered into a non-binding letter of intent with JKT Reclamation to participate in the development of two additional locations, one each in the U.S. states of Kansas and Texas. The company has also executed a non-binding letter of intent with EER Services Limited to explore the potential to develop a reclamation/remediation facility in Nigeria using the processes and proprietary chemical formulae used by JKT Reclamation.
ADM Energy PLC has acquired 100.0% of the Class A membership of SW Oklahoma Reclamation, LLC, a limited liability company formed under the laws of the State of Oklahoma. The equity interest of a limited liability company is referred to as "membership interest," and in place of shares, ownership is represented by "units." As a result of the transactions, ADM will be interested in 100,000 Class A Units, representing 100% of the Class A Units. The company will not have an interest in the 50,000 Class B Units.
Ownership of SW Oklahoma Reclamation, LLC is as follows: ADM Energy (USA), Inc. - 100% Class A Units, Bargo Capital, LLC - 80% Class B Units, Ventura Energy Advisors, LLC - 20% Class B Units. Ownership of JKT Reclamation, LLC is as follows: SW Oklahoma Reclamation, LLC - 60%, Certain Employees - 40%. ADM's economic interest in JKT Reclamation is 30.6%.
In summary, ADM Energy PLC's recent activities include an equity subscription, an investment in SW Oklahoma Reclamation, LLC, and the termination of contingent payment obligations associated with previous acquisitions. The company's investment in JKT Reclamation is expected to be immediately cash flow generative, and it has also entered into non-binding letters of intent for potential developments in the U.S. and Nigeria.