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Corporate Spotlight

ADX strives to achieve exponential growth based on early entry to high impact exploration opportunities in proven oil and gas basins where there is good access to infrastructure, strong demand for energy, stable governments & attractive fiscal terms and above all.
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Interiview with Ian Tchacos, Executive Chairman

PROGRAM FUNDING

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Parta Appraisal Program Funding 

“Iecea Mare Production License Onshore Romania” 

ASX Announcement 17 September 2019 


ADX Energy Ltd (ASX Code: ADX) further to the ASX announcement made on 11 December 2018 regarding Funding Options for the Parta Appraisal Program, ADX is pleased to announce that Reabold Resources Plc (LSE AIM:RBD) and ADX have agreed to the following immediate funding contributions and future funding options for Danube Petroleum Limited (“Danube”). 


The immediate funding contribution is for the suspension and preparation for well testing of the Iecea Mica-1 appraisal well (including purchase of long lead items, planning and services contracting), the approvals and planning work for the Iecea Mica-2 appraisal well, high resolution 2D seismic acquisition in the Iecea Mare production license as well as data acquisition and review of new venture gazettal opportunities onshore Romania.


Under the arrangements, Reabold has committed to an immediate funding contribution by subscribing to 810,811 Danube Shares at an issue price of £1.00 per share to be subscribed in two tranches, the first tranche being for 237,838 Danube Shares to be paid for on or before the 13th of September 2019 (since paid) and the second tranche being for 572,973 Danube Shares to be paid for on or before 30th of September 2019. ADX in turn has committed to an initial funding contribution by subscribing to 540,541 Danube Shares at an issue price of £1.00 per share to be subscribed in two tranches, the first tranche being for 158,559 Danube Shares to be paid for on or before the 13th of September 2019 (since paid) and the second tranche being for 381,982 Danube Shares to be paid for on or before 30th of September 2019.


The abovementioned funds will ensure the timely continuation of the successful Appraisal Work Program with a view to testing the Iecea Mica-1 well and acquiring additional high resolution 2D seismic intended to confirm the potential large stratigraphic upside identified for the PA IV sand. The Iecea Mica-2 planning and approvals will enable the drilling of the second appraisal well following completion of the Iecea Mica-1 well program. In addition to funding for the Appraisal Work Program, ADX, on behalf of Reabold, together with their Parta Exploration Permit partner Tamaska Oil & Gas Limited (ASX Code: TMK), will undertake an evaluation of new gazettal blocks which are being offered in an extensive new license bidding round in Romania. 


Following the above issue of shares ADX will hold a 58.4 % shareholding in Danube with the remaining 41.6% held by Reabold.


ADX and Reabold have the agreed the following funding options for planned Parta Appraisal Project drilling and development projects;


1. Reabold has the option (in its discretion) to subscribe for a further 1,627,604 Danube Shares at an issue price of £1.20 per share for a total subscription price of £1,953,125 within 12 weeks of receipt well logging data from the final logging run on the first Parta Appraisal Well (the Iecea Mica-1 well), and 

2. ADX has the option (in its discretion) to subscribe for a further 651,042 Danube Shares at an issue price of £1.20 per share for a total subscription price of £781,250 within 12 weeks of receipt of well logging data from the final logging run on the first Parta Appraisal Well (the Iecea Mica-1 well).


The above funding options provide a framework to fund the drilling of the Iecea Mica-2 well or a pipeline to tie in the Iecea Mica-1 well to the Calacea gas plant. It is the goal of ADX and Reabold to maintain the momentum from the Iecea Mica-1 drilling results with a view to commencing production from the Parta Appraisal Program as soon as practically possible.


Asset Ownership Structure 

ADX holds a 63% shareholding in Danube Petroleum Limited (Danube), prior to the ongoing funding referred to in this ASX release. The remaining shareholding in Danube is held by Reabold Resources Plc. Danube via its’ Romanian subsidiary, ADX Panonia, holds a 100% interest in the Parta Exploration license (including a 100% interest in the Parta Appraisal Sole Risk Project) and a 100% interest in the Iecea Mare Production license.


Click here to view the full announcement

PRESENTATION

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RESULTS & OPERATIONS UPDATE

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Iecea Mica-1 Well - Results & Operations Update 

ASX Announcement 9 September 2019 


  • Pannonian New Discovery and Appraisal Sands substantially exceed Pre-drill Expectations 
  • Well deepening suspended due to hole problems 
  • Well being prepared for production testing


SUMMARY OF REPORT (DAY 32 since spud date) 

@ 6.00 AM 8th of September 2019 Eastern European Summer Time (EESC)


Results based Independent Petrophysics Evaluation and Revised Mapping. 

  • Mapping of PA IV sands (appraisal target) as well as the PA III and PA V (new discovery zones) incorporating independently assessed petrophysical results from Iecea Mica-1 modern logs indicates 2C Contingent Resource of 20 Bcf compared to best estimate predrill appraisal resources of 6.1 bscf (2C) and exploration resources of 12.7 bscf (best technical prospective), i.e. a total unrisked potential of 18.8 Bcf Note 1 (see Attached ERCE Independent Resources results - first Announced on 11/7/2018) 
  • Good productivity for gas expected from 14.5 meters Net Pay with significantly better than expected porosity and permeability based on modern logs and petrophysical interpretation by Weatherford Atlas GIP SA for the Pa IV reservoirs (International Logging Contractor with extensive operating experience in Romania) 
  • Excellent Economic Potential is anticipated for recoverable volumes exceeding 5 Bcf For example 20 BCF resource development is estimated to have a value of US$ 40 million at a gas price of US$ 6 per mcf for Romanian fiscal terms.


Suspension of well deepening operations. 

  • Attempts to deepen the well below the highly over-pressured zone at 2407 meters were not possible due to a combination of high pressure, fluid losses and well bore deterioration resulting in an unacceptably high risk of getting drilling string stuck in hole and loss of well control. 
  • Due to success in the top hole ADX and its partner Reabold have decided not to compromise the successful Iecea Mica-1 well bore, avoid exposure to excessive costs and will test the deeper prospective exploration potential at a later stage.


Preparation of well for production testing. 

  • The bottom of the well has been plugged and cemented in 7” casing to a depth of 2230 meters, below the deepest PA V pay zone. 
  • The well will be secured and prepared for production testing with a cheaper work over rig in the near future.


Future well operations – circulate well to completion brine and install surface plug


ADX Energy Ltd (ASX Code: ADX), is pleased to advise that it is preparing the Iecea Mica-1 Well (IMIC-1) in the Iecea Mare production license for production testing following the evaluation of Pannonian appraisal and discovery zones resulting in a potentially valuable commercial project that has exceeded pre-drill expectations. Of particular significance are the excellent Pa IV porosities and estimated permeabilities determined by the detailed independent petrophysical analysis undertaken by Weatherford Atlas GIP SA (“Weatherford”) utilising the modern electric line logging tools used in the IMIC-1 well not available in the historic wells drilled in the 1980s.



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ASSET UPDATE

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RAG Austrian Production Asset Update and Revision of Strategic Focus 

ASX Announcement 6 September 2019 


Highlights in this Release 

The RAG acquisition provides the following asset opportunities; 

  • 350 BOPD production and 1 million barrels 2P reserves Note 1 generating A$10 million per annum of revenue 
  • Contingent Resource (2C) upside of 8.5 million barrels Note 1 by developing already producing reservoirs 
  • Drill ready walk in exploration portfolio with access to adjacent infrastructure 
  • Multiple growth and value creation opportunities ranging from low risk reserves development to high reward exploration Note 1


As well as the following strategic attributes; 

  • Transformation to an onshore European producer with low risk predictable revenues 
  • First foreign publicly listed oil and gas player in the Austrian oil and gas sector (currently dominated by two majority state owned companies) 
  • Ability to focus on rapid cash flow growth and high return investments in low cost pro development jurisdictions


Note 1 – See attached presentation outlining reserves reporting requirements and the strategic and value creation potential of the Austrian acquisition. 


ADX Energy Ltd (ASX Code: ADX) is pleased to provide the attached presentation which is intended to provide Shareholders with a greater understanding of the potential impact for ADX of the RAG Asset acquisition onshore Austria as previously announced on 2 July 2019. RAG and ADX have been working closely together during the last 2 months to secure the necessary government transfers for producing licenses, transfers of land and exploration license applications. 


The acquisition transforms ADX’s business model from one that is dependent on opportunistic farmouts to one that is based on a sustainable growth platform with predictable cash flows, low risk expansion opportunities as well as the higher risk higher reward appraisal and exploration that can be funded by farmouts.


The RAG Assets, which include the Zistersdorf and Gaiselberg producing fields and exclusive access to RAG’s exploration data and portfolio in upper Austria, positions ADX as an onshore European producer, developer and explorer in Austria and Romania.


The combination of the RAG Assets and ADX’s existing Romanian Assets provide multiple growth and value creation opportunities in low cost, pro-development jurisdictions with favourable fiscal terms, proven prospectivity for oil and gas, excellent access to infrastructure and high energy pricing.


The value creation opportunities provided by RAG acquisition can be summarised as follows; 


RAG producing assets 

  • Developed reserves and stable production from well maintained, highly optimised production facilities providing a predictable cash flow base 
  • Additional undeveloped reserves from infill drilling and low cost side tracks from existing wells providing low risk and low cost reserves and cash flow enhancement 
  • Additional undeveloped resource potential from currently producing but as yet not targeted reservoirs providing potential for substantial increases in reserves and production utilising existing facilities 


RAG exploration data and acreage applications 

  • Multiple low risk appraisal and nearfield exploration opportunities providing rapid cash flow development 
  • Several high risk, high reward prospects providing exceptional leverage for investors


Click here to view the full announcement

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