ADX Energy (ASX: ADX): Firming-up the exploration portfolio in Austria
• ADX has matured its Austrian exploration portfolio following: (1) recent drilling results, (2) licence area modifications, and (3) updated technical evaluations.• Excluding the Welchau-1 well drilled in 2024—where resource classification remains pending due to suspended flow testing (following an environmental objection)—ADX has delineated 24 drillable prospects across five distinct plays, with P50 prospective resources of ~247 bcf and 31 mmbbl (~72 mmboe). The proportion of gas in the exploration portfolio (excluding Welchau-1) has increased from ~44% % to ~68% with OHO (15 mmboe) now estimated to hold gas rather than oil.
• This compares to a previous estimate of ~79 mmboe (excluding Welchau-1).
• Near-term activity is focused on the shallow gas play, identified in early 2025, with gross prospective resources of 5.5 mmboe (33 bcf).
• Around Anshof, recent drilling has refined the best-case mapping to ~11 mmboe (vs. ~21 mmboe previously). This remains a high-value, near-field oil play anchored by the Anshof discovery and the existing 3 mbbl/d processing facility.
• At Welchau, ADX has matured two new carbonate prospects: (1) the Welchau Deep gas prospect (P50: 65 bcf, Pmean: 125 bcf) and (1) the Rossberg oil prospect (P50: 11 mmbbl, Pmean: 20 mmbbl ).
• In the deep Sub-Flysch play, four prospects are estimated to hold 172-252 bcf prospective resource (P50-Pmean) including 49-93 bcf at ZAM, 90-114 bcf at OHO and 25-35 bcf at IRR.
• The Molasse play comprises three prospects with a combined 3.4 mmboe of prospective resources (vs. 3.0 mmboe previously).
• We re-iterate our target price of A$0.30 per share.
Valuation and next steps
Our total unrisked valuation for the shallow gas play is ~A$0.11 per share assuming that ADX keeps 50% WI. Our ReNAV of A$0.28 per share for the company reflects: (1) producing assets, (2) shallow gas targets (near-term focus), (3) Welchau-1 (ascribed a high risk factor pending further details on progress), and (4) the Italian permit, based on anticipated farm-out terms. The company will provide further details on the Italian permit on 11 September.
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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