ADX Energy Limited (ASE: ADX): 1Q23 in line with expectations. Growing production at Anshof
• 1Q23 production was 299 boe/d including 88 bbl/d for Anshof. In March net production from Anshof has increased to 94 bbl/d. Overall net production in March including the Zistersdorf & Gaiselberg fields (Z&G) was 336 boe/d.• Additional site storage is planned to be installed at the Anshof-3 well location in June which will enable the production rate to be increased to ~ 150 bbl/d (120 bbl/d net to ADX).
• A second 50 m³ oil storage tank is expected to be installed and commissioned on the well site by end 3Q23 to facilitate the increased field production after drilling of the Anshof-2 well.
• ADX held A$3.4 mm in cash at the end of March.
• ADX has identified a number of shallow gas opportunities in the KTZ area in Upper Austria (ADX-AT-I licence). Many identified leads are supported by amplitude versus offset (AVO) anomalies. A typical discovery is anticipated to be able to deliver initial flow rates of 5-10 mmcf/d. Further visibility on prospective resources volumes for leads to be matured into prospects is expected in May.
• Further details on the GRB oil prospect and other Anshof satellite prospects are also expected to be provided in May.
• ADX continues to offer a combination of strong underlying value, increasing cashflow and reserves growth with very material exploration upside from an expanded near-term drilling programme. We reiterate our target price of A$0.100/sh.
Drilling activity and news flow to pick-up from 3Q23
The Anshof-2 well continues to be expected to be drilled in 3Q23. A production licence for the field was awarded in early March. The Welchau prospect (807 Bcfe) is also expected to be drilled in 2H23.
Valuation
ADX offers value, based on its 2P reserves at Z&G and Anshof alone. Our Core NAV based on the company’s 2P reserves stands at A$0.016/sh (2.5x the current share price). De-risking the 3P/3C at Anshof would add A$0.036 per share (~6x the current share price). Our ReNAV stands at A$0.10 per share. The Welchau prospect has an unrisked NAV of A$0.19 per share.
ADX Energy is engaged as an oil and gas exploration company. As of Dec 31 2015, Co. operated five oil and gas permits in North Africa and Europe, which under following projects: Kerkouane project located in Tunisia; Pantelleria project, Nilde project and Orlando project, which are located in Italy; and Romania project, which Co. held 50% interest on its project.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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