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ADX ENERGY LTD - Corporate Spotlight

ADX strives to achieve exponential growth based on early entry to high impact exploration... 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.More

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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Investor Updates with Ian Tchacos, ADX Energy June


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Investor Updates with Ian Tchacos, Adx Energy - June 2020 - Mines & Money

April Updates with Ian Tchacos, ADX Energy


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ASX Release 16th April 2020

Key Highlights: 

Austrian Operations

  • Production operations have continued without interruption and at forecast production rates, currently 340 barrels of oil equivalent per day. The security of ongoing production benefits from a high level of field automation and direct export by pipeline to the OMV refinery in nearby Vienna.
  • Oil field revenues have been maintained in excess of operating costs due to ADX’s hedging strategy introduced in early March.
  • Excess cash flow is being used to fund high priority capital expenditure as well as Austrian corporate and technical personnel costs where the ADX core technical team is located.
  • Reserves Audit providing a base line reserves and contingent resource position to be completed this quarter with an internationally qualified independent technical auditor.
  • Gas development opportunities are being pursued that provide low risk reserves growth, a rapid pathway to cash flow and diversity of revenues.

Romanian Appraisal & Exploration

  • IMIC -1 testing will be delayed by approximately 2 months due to the border closures which has prevented some essential services to be sourced.
  • IMIC -2 drill site preparations have commenced with expected well spud in late Q3 2020.
    3D seismic acquisition is expected to commence in July 2020 when COVID-19 border closures are expected to be lifted.

Finance and Corporate

  • Austrian cash flows are funding local operational and management costs as well as some corporate and financing costs.
  • Romania appraisal and exploration expenditures funded by contributions from Reabold and ADX (A$ 4.2 million) announced 2 December 2019 and the farmin by Tamaska (US$ 1.5 million).

ADX Energy Ltd (ASX Code: ADX) is pleased to advise that despite the difficult conditions currently faced by the oil and gas industry ADX continues to make progress establishing its Austrian business and remains operationally and financially robust.

Austrian oil and gas production from the recently acquired Gaiselberg and Zistersdorf fields continues to perform above pre-purchase expectation. 

The presence of highly automated, reliable production infrastructure and direct access by pipeline to the local OMV refinery in Vienna ensures security of sales revenues. Despite restrictions in Austria due to the COVID-19 virus ADX has been able to execute the majority of planned well work over jobs with a German rig contractor to enhance field production. 

Field personnel have been subdivided into two separated shifts which ensures continued operations, maintenance work and workover work. All workspaces are set up to allow individual isolation so that in the unlikely case of a COVID-19 infection the safety for others is ensured at all times.

In addition to ongoing production operations our Austrian technical team has identified, matured and quantified a number of field development opportunities as well as appraisal opportunities to add to ADX existing reserves and resources. ADX has engaged an independent consulting group to independently audit ADX Austrian reserves and resources position and is looking forward to disclosing results to shareholders during the second quarter of 2020.

Due to the COVID-19 pandemic the ADX Vienna team has worked from home since mid-March. ADX is fortunate to be operating in a jurisdiction where the effects of the COVID-19 on its work force are recognised and ADX will be compensated for up to 30% of its total salary costs, including health service contributions and superannuation. Together with Germany, Austria has by far the highest number of special care hospital beds in Europe (source: The Economist, 28 March 2020). Austria has responded to the crisis with great effect and is well placed to lift restrictions earlier than other jurisdictions.

In Romania ADX has deferred the testing of the successful IMIC -1 well because some of the required services need to be imported from neighbouring Hungary. Since late March Romania has closed its borders restricting access to essential personnel and imported goods. At this stage ADX expects that Romanian borders will remain closed until mid-May. ADX’s other planned operations in Romania include the acquisition of 3D seismic and the drilling of the IMIC – 2 appraisal well. These activities are expected to commence as planned in late July 2020 and September 2020 respectively. Site preparation with local contractors for the IMIC -2 well have already commenced in preparation for future drilling operations.



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Article published on The Kalgoorlie Miner - 5th March 2020

ASX-listed Perth oiler, ADX Energy, has entered into a hedging agreement with BP to guarantee an average Brent price of US$50.64 per barrel for 40% of its Austrian oil production over 10 months during 2020. The hedging agreement is intended to provide price protection in a volatile international crude oil market and has been designed to at least ensure ADX has its field operating costs covered.

The company said the hedging instrument is a ‘swap’, essentially guaranteeing the Brent price of US$ 50.64 over the period of the contract based on forecast oil production from proven reserves.

Operating margins are expected to be around US$20 per barrel at the current Brent pricing however the company has only locked in 40% of expected production with the rest set to ride the market.

ADX said the financial risk associated with the swaps was considered very low given the high confidence of production revenues from the stable, mature, multi-well production and the additional revenues expected from associated gas production.

Assuming ADX meets its production volumes, it is guaranteed an effective floor price for its initial crude oil sales which is quite helpful right now as commodity prices and stock indices tumble due to Coronavirus risks.

More importantly, management said the hedging guarantees a cash flow to cover the company’s entire operating costs at its Gaiselberg and Zistersdorf oil and gas fields in Austria, that have already generated net revenues of 1 million Euro’s in the first three months of production since the acquisition by ADX.

ADX said it expects that its stable, long lived, low decline rate and high value oil production, combined with a relatively low operating cost per barrel will ensure that it will continue to deliver strong cash flows in the long term, despite the recent weakness in oil pricing.

Having locked away this hedging arrangement, ADX can now focus on its planned well workover operations aimed at improving productivity and cash flows from its recently acquired production assets in Austria.

Published by Matt Birney 

Thursday 5th March 2020



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High Impact Work Program For Parta Area in Romania 

ASX Announcement 23 December 2019 

“IMIC-1 Testing, IMIC-1 Feasibility Studies, IMIC-2 Appraisal Drilling and Parta Exploration 3D Seismic Acquisition”

Key Points: 

  • A$ 6.2 million funding package in place for Parta Sole Risk Area testing, appraisal drilling and development studies as well as the Part Exploration License seismic acquisition. 
  • Production testing of IMIC-1 well planned to commence in February 2020. 
  • Development feasibility studies commencing to focus on gas sales via nearby gas plant or gas to power via proximal high voltage network. 
  • 3D seismic acquisition in Parta License and high resolution 2D seismic will commence late Q1 2020. 
  • IMIC-2 appraisal and exploration drilling commencing in Q3 2020. 
  • Extensive program focussed on commercialisation of IMIC-1 gas, further reserves development at IMIC-2 and maturation of prospects for drilling in Parta Exploration license.

ADX Energy Ltd (ASX Code: ADX), is pleased to advise that an extensive, firm work program is planned in the Parta Area during 2020 including production testing of the recently drilled Iecea Mica-1 (“IMIC-1”) well, feasibility studies to optimally commercialise gas from IMIC-1 and drill the Iecea Mica-2 (“IMIC-2”) appraisal well in the Parta Sole Risk Area. In parallel, ADX is finalising planning and regulatory approvals for the acquisition of 3D seismic in the surrounding Parta Exploration license and high resolution 2D seismic acquisition in the Parta Sole Risk Area.

A total of A$ 6.2 million will be deployed in the Parta Sole Risk Area and the Parta Exploration License as a result of funding contributions to Danube Petroleum Limited (“Danube”) by Reabold Resources Plc (LSE AIM:RBD) (refer ASX announcement dated 2/12/2019) as well as the farm in funding by Parta Energy Pty Ltd a subsidiary of Tamaska Oil and Gas Ltd (“Tamaska”) (refer ASX announcement dated 8/4/2019).

ADX holds a 49.2 % interest in Danube and is Operator of Danube. Danube in turn Operates the Parta Sole Risk Area and the Parta Exploration License on behalf of Reabold and Tamaska (see Asset Ownership Structure on page 5). 

2020 Work Program Summary 

IMIC-1 Production Testing

Testing of the Iecea Mica-1 (“IMIC-1”) well in the Parta Sole Risk Area, Romania, is expected to commence in late February 2020. The timing of the test has been determined by the time required to manufacture and deliver well down hole well equipment which enables the well to be completed and tested as a future production well without further intervention. Testing of IMIC-1 as a completed production well is expected to minimise the cost to prepare the well for commercial production and avoid any potential reservoir damage from further well operations. Testing will concentrate on the PA IV sand which is a proven reservoir and has the greatest reserves potential of the 3 reservoir intervals intersected in the IMIC-1 well, including the large stratigraphic upside potential which will be further quantified with the planned high resolution 2D seismic (see below).

The suspended IMIC-1 Well Head 

Note 1: Refer ADX Release dated 9/9/2019. ADX confirms that it is not aware of any new information or data that affects the information included in that market announcement and that all the material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. 

Click here to view the full announcement


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Final Government Approval Received for Austrian Production Asset Acquisition 

ASX Announcement 18 November 2019 

“All conditions met to complete acquisition and drawdown on asset financing”

Key Points: 

  • The transfer of the production licence for the Zisterdorf and Gaiselberg fields from RAG to ADX has been received from the relevant Austrian authority. 
  • ADX and RAG will now complete the binding agreements for the RAG Production Assets as well as agreements for exploration data and access arrangements to RAG’s production infrastructure in Upper Austria. 
  • The approval from the Mining Authority to the transfer the production interest enables the drawdown of the A$ 3.5 loan notes financing

ADX Energy Ltd (ASX Code: ADX), is pleased to advise that it is has received the final government approvals from the “Bundesministerium für Nachhaltigkeit und Tourismus” (BMNT) required for the transfer of RAG Production Assets to ADX pursuant to binding agreements with RAG Exploration & Production GmbH (RAG). RAG and ADX have now achieved all the conditions required to complete the acquisition of the Zistersdorf and Gaiselberg oil and gas fields located onshore in the Vienna Basin, Austria (RAG Production Assets) as well as agreements for exploration data and access arrangements to RAG’s production infrastructure in Upper Austria as announced on the 2 July 2019.

The abovementioned BMNT transfer of license is the single condition precedent required for the drawdown of funds pursuant to the A$ 3.5 million Loan Notes financing for the funding of the RAG Production Assets announced by ADX on the 14October 2019 

ADX Executive Chairman, Mr Ian Tchacos, said “All third-party approvals have been achieved for ADX to complete the RAG Production Acquisition and to now become a producer and the operator of production assets in Austria. Securing the license transfer for this high quality Western European production asset in a prime jurisdiction in terms of oil and gas product pricing, access to infrastructure and political stability is a transformation step up for your company.

In conjunction with the transfer of the Zisterdorf and Gaiselberg fields, ADX will also secure the very valuable RAG exploration data base in upper Austria surrounding RAG’s core production fields where ADX has access arrangements to RAG’s extensive oil and gas infrastructure. ADX has achieved the goal of becoming a producer and an exceptionally well positioned explorer with a ready to drill prospect inventory based on modern 3D seismic in a highly prospective producing basin, which to date has been explored by only one company.” 

Click here to view the full announcement

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