Proactive Investors - Adm Energy PLC (LON:ADME) shares jumped 7% as the company revealed an investment in five onshore US oil leases through a joint deal with OFX Holdings, a substantial shareholder.
The total maximum cost is US$1.61mln, which will be made through the acquisition of Blade Oil V, a Texas limited liability company established as a vehicle for the deal.
Payment will comprise US$478,00 worth of shares at 1.2p a share, warrants, a US$235,000 loan and US$900,000 of deferred consideration dependent on production from the five leases.
Spread between Kansas, Texas and California, the leases currently are all under development, though Altoona (70% owned) in California sits in the Midway-Sunset Oil Field that has been in production since 1894 and is surrounded by Chevron (NYSE:CVX) developments.
ADM wants to raise US$1.5mln through the issue of convertible loan notes, of which US$900,000 has been subscribed including by ADM directors, to pay for the deal and an initial three-well shallow drilling work programme at Altoona and works on the other sites.
The company will be a non-operating financial investor in the interests, it said.
Stefan Olivier, ADM's chief executive, added: "I am excited about the Altoona acquisition and support for ADM shown by our large shareholders and board in subscribing for the SCLN on agreed terms.
"I look forward to updating the market in due course regarding our development plans and timing for initiation of the drill programme on the Altoona lease."
Shares rose 0.05p to 0.78p.
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