ADX Energy Ltd. (ADX:ASX) has seen an upgrade in oil and gas resources in its upper Austria exploration portfolio, noted analyst Stephane Foucaud of Actus Advisors in a June 26 research note.
The Australian oil and gas company's projects there are now estimated to hold 213 million barrels of oil equivalent (mmboe) in 20 prospects, an increase from 200 mmboe.
"The importance of the upgrade is as much about risk reduction as it is about resources increase," Foucaud wrote. "The expansion of the portfolio also provides new opportunities for further farmouts."
The resource estimate increase reflects an increase in the size of prospects such as IRR (gas), which is now estimated to hold 38 billion cubic feet (bcf) (previously 18 bcf), given a higher-than-expected net pay; ZAM (100 bcf vs 88 bcf previously); and GRB (9.5 mmboe vs 8.5 mmboe previously).
Three new lower-risk gas opportunities have also been added: SCHOE, HOCH, and GAST.
'A Potential High-Value Opportunity'
Discoveries and low-risk appraisal opportunities now represent 18.7 mmboe (5.5 mmboe previously), Foucaud wrote. With the high permeability of the reservoirs, a gas well at SCHOE, HOCH, and GAST could flow about 10 million cubic feet per day (mmcf/d), Foucaud wrote.
"The 3D seismic response on the IRR prospect is similar to an adjacent gas field that has produced ~155 bcf of gas, thereby increasing confidence in the prospect," he noted.
Discovery of an oilfield at Anshof has derisked the nearby GRB prospect. GRB has been upgraded from "trend exploration" to "discoveries and appraisal," Foucaud wrote, "which given its size is a potential high-value opportunity."
Value, Cashflow, and Reserve Growth
In addition, the GMU prospect in the Molasse Basin combines geothermal (18 megawatts power and heat potential) with multiple overlaying oil and gas targets estimated to hold 3.9 mmboe, Foucaud said.
A well in such a reservoir could flow up to 45 mmcf/d, he noted.
"ADX continues to offer a combination of strong underlying value, increasing cashflow and reserves growth with very material exploration upside from an expanded near-term drilling program," Foucaud wrote. "A successful farmout of some of the prospects and projects could highlight their values and provide further funding to accelerate its drilling program."
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Disclosures for Actus Advisors, ADX Energy Ltd., June 26, 2023
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