ADX Energy (ASX: ADX): Restarting production at Anshof
• The Permanent Production Facility (PPF), with a capacity of 3,000 bbl/d of liquids, has been commissioned and the Anshof-3 well has recommenced production at a rate of 134 bbl/d with no water.• The operation has been undertaken in line with expectations and within budget. The oil production rate at Anshof-3 is 16% above the rate prior to shut-in. ADX anticipates increasing production from the well to 150 bbl/d.
• No permanent staff will be required on the site, which should reduce opex.
• The company expects to drill the Anshof-2 side track shortly. The well is expected to come onstream in 3Q24.
• A third Anshof producer (Anshof-1) could take gross production at the field to ~900 bbl/d by YE24. An updated reserves and resources estimate for Anshof is expected to be announced after this well has been drilled.
• ADX plans to also drill the LICH or IRR prospect with MND (we currently conservatively assume that the smallest of the two prospects will be drilled first).
• The company will also test the high impact Welchau discovery in 4Q24.
• With multiple upcoming catalysts by YE24, including production growth, reserves booking and high impact drilling, we re-iterate our target price of A$1.00 per share.
Valuation
Our ReNAV is unchanged at A$1.00 per share. Our Unrisked NAV for Welchau is ~A$1.55 per share. Our unrisked NAV for the 3P reserve case at Anshof is A$0.36 per share (including A$0.12 per share for the 2P case). Our unrisked NAV for LICHT is A$0.05 per share.
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.
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