ADX Energy (ASX: ADX): Momentum accelerating. Potential resources increase in Austria
• The Welchau‑1 well is scheduled for re‑entry in February to test the Reifling reservoir. An acid stimulation will be performed on the perforated interval to address wellbore damage and improve productivity in the carbonate section. The operation should also yield additional insight into the deeper Welchau Deep gas prospect and a potential up‑dip oil accumulation. Further drilling could occur during the 2026/27 winter season.• Drilling at the HOCH‑1 shallow prospect is expected to begin in March, followed sequentially by the GOLD‑1 and SCHOE‑1 wells.
• The SGB‑1 oil prospect in the Anshof area is planned for drilling in 4Q26.
• We reiterate our target price of A$0.20 per share, representing a ~6.5× multiple of the current share price.
Potential resources increase
• Two additional shallow gas prospects (FUCHS and SAND) and the EHREN lead have now been matured and incorporated into the portfolio. These prospects lie close to one another, benefit from proximity to existing pipeline infrastructure, and carry a high chance of success. ADX expects to publish resource estimates by the end of 1Q26.
• Further data reprocessing may also enhance the potential of deeper Jurassic plays, including the ZAM and OHO prospects, as well as additional opportunities within the Puchkirchen reservoir channel system.
• In the Anshof area, the PERG prospect could contain up to four oil-bearing reservoirs, supported by results from nearby wells. This may lead to a material uplift in prospective resource estimates (currently 2.5 mmboe mean). An updated assessment is anticipated in 2Q26.
Valuation
ADX held A$4.8 mm in cash at YE25 (in line). Our total unrisked valuation for the company based on its 2P reserves and the shallow gas play in Austria is ~A$0.08/sh assuming that ADX keeps 50% WI of the shallow gas play. Our ReNAV of A$0.20/sh 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.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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