ADX Energy (ASX: ADX): Adding materiality to Welchau
• The continuous hydrocarbon shows and light oil recovered at Welchau‑1 indicate the presence of a light‑oil system within the broader Welchau anticline as well as a deeper gas condensate system in pressure communication with the historic Molln-1 gas discovery.• The latest mapping indicates the crest of Welchau structure is 500 m updip of Welchau-1 which ADX estimates to contain 11.7 mmbbl of P50 prospective resources (Pmean of 17.7 mmbbl).
• The latest mapping also indicates the Welchau gas‑condensate objective, which carries P50–Pmean prospective resources of 65.4–125.4 bcf (unchanged) is now mapped to be considerably shallower (~ 600 m below Welchau TD) than previously expected and easily accessible by deepening the well. Importantly pressure data indicates Welchau-1 is in pressure communication with the deeper Molln-1 well which tested gas at 3.7 mmcf/d (Welchau Deep is actually an updip Molln appraisal).
• ADX now has two re‑entry options: either sidetrack to test the up‑dip oil target or deepen the current wellbore to appraise the gas condensate.
• Each prospect carries an estimated unrisked value of A$0.15–0.16/sh. Pending the results of the planned re‑testing, we reiterate our target price of A$0.20/sh, implying a ~6.5× multiple to the current share price.
V
aluation
Our total unrisked valuation for the company based on its 2P reserves and the shallow gas play in Austria is ~A$0.08/sh. Our ReNAV of A$0.20/sh for the company reflects: (1) producing assets, (2) shallow gas targets, (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.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.