- ADX Energy (ASX:ADX) is developing a gasfield in the Upper Austria region, EU
- The company has inked an investment deal with Austrian MND
- MND will pay A$7.34 million for exploration drilling in exchange for 50 per cent interest in a part of ADX’s acreage
- ADX geared up in the region during the midst of the Russian war-borne EU gas crisis
- Shares are up five per cent, trading at 10.5 cents at 12:20 pm AEDT
ASX-listed microcap ADX Energy (ASX:ADX), developing a gasfield in the Upper Austria region of the EU country, has just secured a new funding stream.
Inking an investment agreement with Austria’s MND, ADX will now receive more than A$7 million to fund exploration costs.
In return, MND will receive a 50 per cent interest in a portion of ADX’s acreage it calls its investment area. The two companies already boast an established working relationship.
Australian presence mitigates crisis
ADX’s presence in the region came to government attention in 2022 as the EU’s gas crisis, borne from Russia’s invasion of Ukraine, was at its peak.
That government attention from regional authorities remains in place.
The Austrian Ministry of Finance (BMF) has ticked off the establishment of the investment area on-site ADX’s landholding.
Within the boundaries of its investment area, ADX reports “several” gas targets are available for drilling with inroads to be made in 2H CY24 – so shareholders could be waiting a while for newsflow.
Upside potential
“Both prospects [LICHT and IRR respectively] offer very large gas resources upside potential,” ADX wrote this morning.
In a testament to the viability of nearby geology, ADX’s Anshof field in Upper Austria was awarded a production licence in March of last year.
“[This] transaction provides upfront cash of EUR 0.45 million and EUR 4.5 million of gas exploration drilling investment which we intend to deploy during the second half of 2024,” ADX Executive Chairman Ian Tchacos said of the advanced MND agreement.
“We are pleased to further extend our collaborative relationship.”
In the background, EU gas futures have fallen more than 50 per cent over the last 12 months.
From their August 2022 peak, the price has fallen €300/MWh to €34.55/MWh as of noon AEDT Monday, January 8, per TradingEconomics.
ADX shares were up five per cent, trading at 10.5 cents at 12:20 pm AEDT.