ADX Energy Ltd (ASX:ADX) has announced its wholly owned subsidiary, ADX VIE GmbH, has completed an Energy Investment Agreement with MND Austria a.s., providing an upfront cash amount of 450 000 EUR and 4.5 million EUR for gas exploration within the ADX Upper Austria Licence, entitling MND to earn a 50 percent economic interest in the Investment Area.
Figure 1: Map showing the Investment Area within the ADX-AT-I licence which includes the LICHT and IRR gas exploration prospects
A Strategic Deal
The investment agreement was initially announced in December last year, however was pending approval from the Austrian Ministry of Finance.
The ‘Investment Area’ encompasses the ADX-AT-I license, including of several gas prospects available for drilling.
Drilling is anticipating to commence in the second half of 2024, either at the LICHT or IRR gas exploration prospects during the second half of 2024.
Both prospects are mature for drilling, offer large gas resource upside potential, and are strategically located proximal to required infrastructure, enabling the opportunity for rapid and low cost development.
The IRR gas prospect offers best technical prospective recoverable gas resources of 38 BCF with a very large stratigraphic upside potential of 79 BCF (P10).
Figure 2: 3D rendering of the IRR prospect mapped on 3D seismic and supported by AVO anomalies indicating gas filled reservoir. IRR is an analogy to the close by gas field. The insert shows the geological model suggesting the reservoir stemming from turbidite deep water sediments.
The LICHT prospect offers a similarly large stratigraphic upside potential and has a best technical recoverable resources of 16.2 BCF defined by a four-way dip closure. The LICHT prospect has additionally received a drilling permit and environmental clearance.
Within the partnership, ADX will remain the operator of the drilling and retain 50 percent economic interest in the exploration Investment Area.
However, ADX has retained 100 percent of the remaining ADX-AT-I licence including adjacent gas exploration prospects OHO, ZAM, and the GMU geothermal / oil and gas combined energy prospect.
ADX Energy’s Executive Chairman Ian Tchacos commented on the investment agreement.
“The Board of ADX is delighted to have completed the Investment Agreement with MND and we look forward to the commencement of our gas exploration program in our ADX-AT-I exploration licence,” he said.
“The transaction provides upfront cash of EUR 0.45 million and EUR 4.5 million of gas exploration drilling investment which we intend to deploy during the second half of 2024.”
“We are pleased to further extend our collaborative relationship with MND across the Anshof Oil Field as well as exploration drilling opportunities within the ADX-AT-I licence.”
“This transaction ensures ongoing exploration investment without the need to raise further shareholder funds, a strategy which provides upside to our shareholders with minimal financial exposure.”
ADX Energy’s Australian Stock Exchange-listed share price has risen 5% and is currently trading at $0.105 (11.00am UTC+ 8 hours).