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ADX Energy announces A$13.5 million institutional placement

2 May 2024 10:27
ASX:ADX

ADX Energy (ASX:ADX) has successfully secured firm commitments from sophisticated, institutional, and professional investors to raise A$13,500,000 through a strategic institutional placement.

The Placement, comprising 128,571,429 new fully paid ordinary shares at A$0.105 per share, represents a significant milestone for the company as it gears up for an intensive exploration and development phase in Austria.

Placement details

The Placement consists of two tranches, with Tranche 1 to raise approximately A$7.5 million and Tranche 2 approximately A$6.0 million, subject to shareholder approval at the upcoming Annual General Meeting.

Each Placement Share will be accompanied by one free-attaching option exercisable at A$0.15 per share until 8 May 2026.

Robust investor interest

The strong demand from both offshore and domestic institutional investors, along with family offices, bolsters the market’s confidence in ADX’s growth trajectory.

The Placement not only injects vital funds into the company but also diversifies its investor base, welcoming new stakeholders who recognise the promising opportunities in Europe’s energy landscape.

Strategic utilisation of funds

The proceeds from the Placement are earmarked for a series of activities aimed at advancing ADX’s exploration and development initiatives.

Among the key priorities are the evaluation, data analysis, and production testing of the Welchau-1 gas condensate discovery, which entails examination of the 450-metre gas column encountered during drilling, with the aim of unlocking the full resource potential of the Welchau area.

Furthermore, ADX plans to capitalise on the exploration prospects below the current depth of the Welchau-1 well, potentially deepening the well to access additional exploration targets.

The company also intends to drill a gas exploration well in the ADX-AT-I license, a venture jointly funded through a farmout agreement with MND.

Driving operational efficiency

In tandem with its exploration efforts, ADX Energy is committed to enhancing operational efficiency and infrastructure.

The funding will facilitate the planning, permitting, and drilling of the Anshof-2A sidetrack appraisal well, supported by upgrades to gas processing facilities, including the implementation of a CO2 reduction plant at ADX’s Vienna Basin oil and gas fields.

Company commentary

ADX Energy Executive Chairman, Ian Tchacos, emphasised that investor support has enabled the company to pursue progress in Austria, increasing its potential to uncover significant discoveries.

“The Board of ADX is delighted by the strong support for the placement and welcomes a number of new institutional and family office investors to the register,” he said.

“The level of investor support is an endorsement of the Company’s exceptional growth opportunities in the heart of energy-starved Europe.

“The funds raised enable ADX to confidently pursue a very active program including testing the Welchau-1 discovery, drilling an oil development well at Anshof, drilling a further gas exploration well in Upper Austria and potentially deepening the Welchau-1 discovery well to access further, deeper exploration potential.”

ADX’s Australian Security Exchange-listed share price is currently trading at $0.10 (10:15 am UTC+ 8 hours).

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