Completion of strategic review

RNS Number : 9209E

Advance Energy PLC

04 March 2020

 

4 March 2020

Advance Energy plc

('Advance' or the 'Company')

Completion of Strategic Review

Advance Energy plc (AIM:ADV) (formerly known as Andalas Energy & Power plc (AIM:ADL)) is pleased to present a new strategy for the Company based on growth through acquisition or farm-in to non-operated interests in upstream projects where there is an opportunity to add significant value in the short to medium term.

Advance Energy - Vision and Strategy

Our Vision is to provide exceptional returns to our investors by unlocking hidden value in already discovered oil and   gas assets.

Strategy Overview

Unlocking hidden value is our main objective - to the benefit of our shareholders as well as our joint venture partners, host governments, and broader stakeholders.

Many upstream assets present challenges to existing operators. These difficulties may be technical in nature, mis-alignment in the partnership, sub-optimal commercial arrangements, or simply funding constraints.

One, or a combination, of these issues can present the opportunity for realisation of added value.

We look to identify such assets and maximise their value using our unique insights from original technical work, commercial acumen or advantaged relationships.

Business Model

We seek to take non-operated interests either by acquisition or farm-in, and prefer joint ventures with only two parties and the ability to exert a significant degree of influence.

Our model means that we only work with established operators eliminating many of the execution risks present for typical early stage, high growth companies. We can focus on what really adds value rather than day-to-day operational concerns leaving that to the operator.

We have no need to build a large and complex organisation keeping our overheads low and preserving value for our shareholders.

Value Driven

We have no need to be geographically constrained. We screen projects purely on value potential rather than specific play-type or basin. This provides us with a larger opportunity set than many traditional upstream companies.

We target only discovered resources in good fiscal regimes, and projects with major value inflection points within a short timeframe. Generally, less than 3-5 years out with clear line of sight from the onset.

No high-risk exploration with long time lines to delivery of full value.

Managing Risks

We prefer one-on-one negotiation where we can tailor our approach and will not participate in bidding rounds or other openly competitive situations where value can be bid away upfront.

Our focus on near term value creation means it is easier to control risks - limited exposure to long term commodity price trends, and no potential stranded value from the world's changing energy mix or climate change initiatives.

The Advance Energy approach is to support and enhance the performance of upstream operators to deliver exceptional project outcomes and exceptional returns.

Upcoming Roadshows

The Management of the Company will hold a number of meetings with investors in the coming weeks in order to present the new strategy and introduce our new team.

Current Assets

This replaces the old strategy which focused on exploration and production projects in the United Kingdom and Indonesia.

The Company notes that it has met its obligations under the Betun Selo Services and Option Agreement in Indonesia and the Board has concluded that the remaining value in the asset does not offer sufficient potential to merit drilling a new well at this stage.

As regards the Company's non-operated interests in the United Kingdom - they are currently at an early stage in the exploration and development cycle. As such, they have materiality and risk profiles that are unlikely to compete for capital under the new strategy.

Website

In conjunction with the Company's recent name change, its website address has now changed to www.advanceplc.com

For further information, please contact:

Leslie Peterkin	Advance Energy plc c/o FIM Capital Limited	Tel: [phone]
Graham Smith	FIM Capital Limited	Tel: [phone]
Roland Cornish/ James Biddle	Beaumont Cornish Limited (Nominated Adviser)	Tel: [phone]
Colin Rowbury	Novum Securities Limited (Joint Broker)	Tel: [phone]
Christian Dennis	Optiva Securities Limited (Joint Broker)	Tel: [phone]

 

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