ADM Energy, a natural resource investing company, announces the formation of, and an investment in, Vega Upstream JV, a joint venture company formed by Covenant Oil Group (“COG”) and the Company, primarily to identify and coordinate investment opportunities in US onshore oil and gas assets.

Vega Upstream JV has identified a portfolio of operated and non-operated producing natural gas, natural gas liquids (“NGL”) and oil wells in Oklahoma, USA, together with a fee-generating natural gas gathering system and its associated surface land and equipment (“Midcon Assets”). Subsequently, Vega Upstream JV has executed a Stock and Membership Interest Purchase Agreement with the owner of a private U.S. company to acquire all of the issued and outstanding share capital of the Target and all of the issued membership interests in its subsidiaries, and the Midcon Assets, for a base purchase price of c. US$14.9 million. On 28 April 2026, Vega Upstream JV paid a deposit of US$500,000 to execute the Purchase Agreement. The Deposit will be applied to the Purchase Price at closing of the transaction, anticipated on or before 31 May 2026, with an effective date of 1 February 2026.

The Midcon Acquisition and associated due diligence and transaction expenses are expected to be financed via an institutional credit facility of approximately US$14.0 million and an equity contribution to Vega Upstream JV of US$1.0 million (inclusive of the Deposit) of which approximately US$100,000 will be invested by ADM. These funding sources are expected to satisfy the Purchase Price together with associated transaction costs and any additional customary closing adjustments. 

Vega Upstream JV has further issued to Electric Guitar, a public limited company incorporated in England and Wales, quoted on the AIM Market of the London Stock Exchange (“ELEG”), an option to acquire an interest of 50% in certain of the Midcon Assets (the “ELEG Option”). The ELEG Option terminates on 31 July 2026.

Closing of the Midcon Acquisition by Vega Upstream JV is not contingent on the ELEG Option. 

Regarding the Midcon Acquisition, Executive Director, Randall J. Connally, stated:
“We believe the Midcon Acquisition will be transformative for the Company, with anticipated  cash receipts resulting from the transaction potentially reaching c. US$850,000 over the next twelve months and additional upside and news flow resulting from interests being acquired in three drilled, but uncompleted wells, a large inventory of behind pipe opportunities to be exploited.

“In addition, the potential upside via the provision of services to Vega Upstream JV by Eco Oil, associated with the operation of the Midcon Assets, additional fees and benefit should ELEG exercise its option to participate; and upside that may be realised from either, or a combination, of drilling and farm-out of some of the 58 drilling locations included as part of the Midcon Asset portfolio.”  

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