ADX banking Vienna Basin oil revenues with BP contract
ADX has moved to secure strong revenues for its Vienna Basin oil production by hedging about 50% of its proved reserves through a new zero-cost contract with BP.
The hedging contract covers average production of about 115 barrels of oil per day from its Gaiselberg and Zistersdorf fields for a seven-month period and provides price certainty with a pricing floor of US$80 ($111.44) per barrel while providing exposure to upside through a US$130.25/bbl cap.
Brent crude benchmark prices are currently at US$121.72/bbl.
While the hedge will cover field operating and administrative costs, ADX Energy (ASX:ADX) retains exposure to any further upside in Brent pricing through the remaining 50% of forecast production that remains unhedged.
Gas production from the Vienna Basin fields, which is expected to contribute about 30% of field revenues during 2022, remains unhedged due to high gas prices in Europe that are currently in excess of US$150 per barrel of oil equivalent.
Continued strong oil and gas revenues from higher pricing and sustained production rates have placed the company in a strong position to continue a program of portfolio expansion for oil and gas as well as compatible green energy production opportunities.
This article was developed in collaboration with ADX Energy, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.