ADX Energy (ASX: ADX): A$3.5 mm funding boost ahead of busy activity programme
• ADX has raised A$3.5 mm through a new equity placement at A$0.026 per share. Investors in the placement will also receive one option for every two new shares subscribed, exercisable at A$0.039 per share.• The capital raise strengthens ADX’s balance sheet ahead of its 2026 work programme and effectively removes the funding overhang that had weighed on the stock. ADX Company is also preparing for a potential dual listing on Oslo Børs’ Euronext Growth market.
• Key near-term activity includes the resumption of flow testing at Welchau in January. Operations will commence with fluid sampling and pressure measurements in the already-perforated Reifling formation—the shallowest reservoir. Incorporating the new equity issuance, our updated unrisked NAV for the Reifling formation stands at approximately A$0.26 per share.
• ADX’s shallow gas drilling campaign in Austria is set to begin in February, targeting the HOCH-1 (50% WI) and GOLD-1 (100% WI) wells. The recent financing provides ADX with the flexibility to drill GOLD-1 independently (retaining 100% WI), should it choose to do so. These prospects carry a high probability of success, estimated between 51% and 81%.
• In parallel, ADX will acquire additional seismic data over its Sicily Channel gas permit, which will support an updated assessment of the permit’s prospective resources.
• Reflecting the equity raise in our valuation, we revise our target price to A$0.20 per share, implying a 6.5x multiple on the current share price.
Valuation
Our total unrisked valuation for the company based on its 2P reserves and the shallow gas play is ~A$0.08 per share assuming that ADX keeps 50% WI of the shallow gas play. Our new ReNAV of A$0.20 per share for the company reflects: (1) producing assets, (2) shallow gas targets (near-term focus), (3) Welchau-1, and (4) the Italian permit, based on anticipated farm-out terms.
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.
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