ADX Energy Ltd. (ADX:ASX) identified and matured 13 prospects in its Upper Austrian shallow gas play, reported Auctus Advisors Analyst Stephane Foucaud in a May 20 research note.
"Four of these prospects, with a best case recoverable resource estimate of 16,100,000,000 cubic feet (16.1 Bcf), are drill ready," Foucaud wrote.
900% Return Potential
On the asset update, Auctus reiterated its AU$0.30 per share target on Australian oil and gas exploration and production company, trading now at about AU$0.03 per share, noted the analyst. From this price, the return to target is 900%.
About the Asset
ADX's 100%-owned shallow gas play in Upper Austria is proven, Foucaud reported. Nearby historical discoveries in the Austrian Molasse Basin, which have produced 220 Bcf to date, support this.
The company's prospects, in the ADX-AT-I and ADX-AT-II license areas, benefit from amplitude variation with onset, or AVO, anomalies, which further boosts confidence in their potential.
"Typical wells are expected to achieve initial production rates of 10,000,000–15,000,000 cubic feet per day and can be quickly brought online due to their proximity to open-access pipelines," Foucaud explained. "Internal rate of return can reach 49%."
2025 Drilling Eyed
Foucaud relayed that ADX wants drilling to start in Q4/25 and thus is in discussions with potential farm-in partners. First in line to be drilled is the GOLD cluster, consisting of the GOLD, ZAUN and GRAB prospects that together have 11 Bcf of prospective resources.
Because these prospects are at depths of 850–1,150 meters, the geological risk is very low. The cluster's chance of success is 70%.
On the Horizon
Investors should watch for two upcoming events and possible catalysts, wrote the analyst. One is prospective resource estimates for the Sicily Channel gas exploration permit in Italy, expected in roughly midyear.
The other is landing a partner to drill the GOLD cluster; "this could be a rerating event," wrote Foucaud.
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