Source: Stephane Foucaud
March 20, 2023 (Investorideas.com Newswire) Plans for this year call for drilling of several prospects, and each one that is successful would add value to the energy producer, noted an Auctus Advisors report.
ADX Energy Ltd. (ADX:ASX) had its target price raised to AU$0.100 per share from AU$0.070 by Auctus Advisors when it revised the chances of success it forecasts for certain ADX assets, reported analyst Stephane Foucaud in a March 15 research note.
"ADX offers a combination of strong underlying value, increasing cash flow and reserves growth with very material exploration upside from an expanded near-term drilling program," Foucaud wrote.
The Australian oil and gas company also offers investors huge potential gains of about 1,150% from its current share price of AU$0.007.
Plans for the Year
Foucaud highlighted that 2023 is expected to be "busy and transformational" for ADX Energy and described the work expected to be done at its assets this year.
In the Anshof oilfield in Austria, the energy firm aims to grow oil production to nearly 1,000 barrels per day by year-end 2023, noted Foucaud. At this production rate, the company could generate US$13 million in after-tax operating cash flow per year.
Drilling is slated for Q3/23 of both the Anshof-2 appraisal well and the Welchau gas prospect. Welchau, in which ADX has an 80% working interest, is in the foothills of the Austrian Alps.
What's more, "with further partners from the ongoing farm-out process, ADX seeks to drill another two prospects in 2023," noted Foucaud. ADX has 16 of them that are drill ready in Upper Austria, including ones next to Anshof.
Also this year, ADX intends to advance two other energy assets, its green hydrogen project in the Vienna basin and its geothermal project in Upper Austria.
Potential Upside From Assets
Foucaud presented the unrisked values Auctus assigned to ADX's various prospective assets. He noted that Auctus' current A$0.017 per share target price on the energy company only includes the risked value of Welchau and the upside case for Anshof.
Anshof and its Proven and Probable (2P) reserves of 4,200,000 barrels of oil equivalent (4.2 MMboe) equate to about AU$0.02 per share. Success with Anshof-2 could result in 8 MMboe being converted to the 2P reserves category, thereby adding about AU$0.04 per share of value. Plus, the additional 9 MMboe implied with the 3P and 3C reserves also have an estimated value of AU$0.04 per share.
For Welchau, Auctus has an unrisked value of about AU$0.20 per share.
Were ADX Energy able to obtain a farm-in partner to drill two prospects, as is its aim, this would add another AU$0.010 per share of value, noted Foucaud. Additionally, drill success at both would unlock yet another AU$0.022 per share.
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Disclosures For Auctus Advisors, ADX Energy Ltd., March 15, 2023
ADX Energy Ltd ("ADX" or the "Company") is a corporate client of Auctus Advisors LLP ("Auctus"). Auctus receives, and has received in the past 12 months, compensation for providing corporate broking and/or investment banking services to the Company, including the publication and dissemination of marketing material from time to time.
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