ADX Energy extends collaboration with MND through farm-out of gas exploration prospects in Upper Austria
Special Report: ADX Energy has farmed out a 50% interest in an exploration investment area within its ADX-AT-I licence in Upper Austria to MND Austria for €4.5m in exploration drilling funding and €450,000 in back costs.
The investment area includes the LICHT and IRR gas exploration prospects that are technically mature for drilling, with the former already having a drilling permit and environmental clearance in place.
IRR has best technical prospective resources of 38 billion cubic feet (Bcf) of gas with the potential to host up to 79Bcf and is next to an analogous discovery that has produced over 150Bcf of gas to date.
LICHT offers similarly large stratigraphic upside potential with ADX Energy (ASX:ADX) estimating best technical recoverable resources of 16.2Bcf defined by a four-way closure.
Both undrilled prospects were identified on seismic data as AVO (amplitude variations with offset) anomalies that are indicative of gas-filled reservoirs.
Drilling is required to determine if a significant quantity of potentially moveable hydrocarbons are present.
MND Austria is already a 30% partner in the ADX’s Anshof oil field in ADX-AT-II for which the highly credentialled European energy company, which had revenue of €8.5bn in 2022, made cash payments and is providing project funding and success payments totalling $19m if the Anshof-2 well meets its production objectives.
Its funding for exploration at the investment area within ADX-AT-I will be used for drilling at either the LICHT or the IRR gas prospects during the second half of 2024.
At completion of the transaction, ADX will remain operator and retain a 50% economic interest in the investment area as well as 100% in the remainder of the ADX-AT-I licence, which hosts the OHO and ZAM gas prospects as well as the GMU geothermal/oil and gas combined energy prospect.
“The board of ADX is delighted to have entered into another investment agreement with MND which will accelerate our gas exploration program in Upper Austria,” ADX executive chairman Ian Tchacos said.
“MND brings additional exploration funding of up to EUR 4.95 million as well as extensive skills, experience and operating capability.
“This transaction brings the number of industry funded wells in ADX’s Upper Austria licences to four wells which we expect to drill within the next 12 months.
“This investment by MND is a further endorsement of the capability of our technical team who continue to originate and mature an exceptional exploration prospect portfolio in Upper Austria.”
The transaction is conditional upon the clearance of the partnership documentation by the Ministry of Finance of the Republic of Austria.
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.