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ADM Energy: Xodus Group gets nod to compile CPR on Barracuda Field


ADM Energy (LON:ADME) has commissioned Xodus Group, an energy consultancy, to produce a Competent Persons Report (CPR) on the Barracuda Field. The new CPR is the next step in the agreed scope of work under the Risk Sharing Agreement for the development of the Barracuda Field, in which the ADM Energy holds an indirect interest.

Shares in ADM Energy were up over 17% on the news. Stock in the London-listed oil explorer has been sliding of late. Shares have slipped considerably from a high of 5.69 in January and were down to under 3.5 by late April. There has been some more buying activity in ADM Energy shares in May, however, as investors have started to feel more optimistic about prospects for the Barracuda field.

The Barracuda Field sits off the coast of Nigeria and should not be confused by the Brazilian offshore field of the same name. Three wells were drilled there in 1967 and another by CNOOC in 2007. The plan at ADM Energy is for a fifth well to be drilled here in Q4 and that financing from ADM’s partner Dubai Bridge Investments will be used to finance “certain development costs.”

The independent report will provide a full technical and economic review of the Barracuda Field, assessing the latest data to define the asset’s geological profile and estimated gross in-place and recoverable oil and gas volumes from oil and gas accumulations located in NW OML 141 Licence Area, onshore Nigeria.

Xodus will use the Society of Petroleum Engineers Petroleum Resource Management System, updated in 2018, for classification of the oil and gas volumes. This should provide more clarity on classification of resources than the PRMS of 2007, the company said in a statement this morning.

It is expected that the CPR will take four to six weeks. The Company will report the results to the market once completed.

“The new CPR is the springboard for the RSA Consortium’s plans to develop the Barracuda Field and take the asset into production,” said Osamede Okhomina, CEO of ADM Energy. “It will validate the appraisal work already conducted by our internal technical team, which has defined immediate recoverable reserves and significant potential beyond. We believe that first oil of 4,000 BOPD may be possible and, subject to rig availability, could be achieved in H2 2021 by drilling an appraisal well (Barracuda-5). If this is successful, there may be the opportunity to further increase production to approximately 23,000 BOPD by drilling six wells by 2026.”

Since finalising the acquisition last month, ADM Energy hass moved swiftly to secure the services of key technical partners and has now officially commissioned Xodus to produce the CPR. “We are pleased by progress at Barracuda to date and will continue to take a proactive role in driving the project forwards towards production,” Okhomina said.

ADM Energy recently told the market it had realised almost £900,000 from the sale of its shares in Superdialectrics, prompting stockbroker Arden to repeat its buy recommendation for the oil explorer and set a target price of 14p, well above current trading levels. At the time of writing shares in ADM Energy were trading at 3.98p.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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