• Investors have oversubscribed for ADX Energy’s placement to raise $4.2m
  • Share purchase plan offered to existing shareholders to raise up to a further $1m
  • Proceeds will fund increased stake in Anshof-2, install permanent production facilities and fund Welchau drilling

 

Special Report: Australian, UK and European investors have demonstrated their confidence in ADX Energy and its Austrian oil and gas assets by oversubscribing for a $4.2m placement.

The company is currently drilling the Anshof-2 appraisal well that is expected to contribute about 300 barrels per day (bpd) of oil to field production with well ultimate recovery of approximately 0.8 million barrels if successful.

ADX Energy (ASX:ADX) currently produces about 120bpd of oil from the Anshof-3 discovery well though this is constrained by the use of a leased early production system.

The field has proved and probable (2P) reserve of 5.2MMboe though the success of Anshof-2 and the upcoming Anshof-1 wells could convert a significant part of the current audited 3P (proved, probable and possible) reserves and 3C (high estimate) contingent resource into commercial reserves.

ADX has a 60% interest in Anshof-2, up from the previous 50% after partner Xstate Resources (ASX:XST) opted not to participate in the well.

Additionally, the company is awaiting environmental clearance to drill the potentially transformational Welchau-1 exploration well that targets a best technical prospective resource of 807 billion cubic feet (Bcf) of gas right smack in the middle of energy hungry Europe.

For context, a single Bcf can power 24,315 average homes for a year.

 

Strong support

Sophisticated investors in Australia, the UK and Europe have oversubscribed for the placement of 42 million shares priced at 10c each by about 40%, highlighting the strong interest in ADX.

The placement includes the issue of one placement option with a strike price of 16c that expire on 31 December 2024 for every two shares subscribed.

ADX will also offer existing shareholders to subscribe for up to $30,000 worth of shares under the same terms to raise up to a further $1m.

Proceeds from the placement and share purchase plan will be used to fund the company’s increased economic interest in the Anshof-2 appraisal well, install permanent production facilities at Anshof, and fund its share of costs for the drilling of the Welchau exploration well in Q1 2024.

The Anshof field is targeted to produce between 700-1000bpd of oil following the drilling of Anshof-1 in Q2 2024.

“The board of ADX is delighted by the strong support for the placement and welcome a number of new shareholders to the register, including several large European investors where there is a strong recognition of the importance of energy security and responsibly produced domestic production,” executive chairman Ian Tchacos said.

“While the company is essentially self-funding from farmout transactions as well as existing oil and gas production in the Vienna basin and Upper Austria, this placement and the SPP enable ADX to fund an increased share of expenditures resulting from the non-participation of Xstate Resources Limited in the drilling of the Anshof-2 appraisal well, the installation of the Anshof permanent processing facilities to increase field production rates and provide funding for the drilling of the Welchau prospect which, subject to an environmental permit, is expected to spud in January 2024.”

 

 

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.

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