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- ADX Energy (ADX) inks a farm-in deal with Xstate Resources (XST) to fund a portion of drilling at the Anshof prospect of the ADX-AT-II exploration licence in Upper Austria
- Xstate will cover 40 per cent of the Anshof well drilling cost up to a limit of EUR 1.8 million (A$2.8 million) in exchange for a 20 per cent stake in the Anshof prospect Area
- Xstate may choose to fund 40 per cent of a second well on Anshof or the Anshof Farm-in Area in exchange for a 20 per cent interest in the whole Anshof Farm-in Area
- ADX Executive Chairman Ian Tchacos says the deal represents a vote of confidence in the prospect
- Shares in ADX Energy were down 8.33 per cent to 1.1 cents on the market today
ADX Energy (ADX) has inked a farm-in agreement with Xstate Resources (XST) to fund a portion of drilling at the Anshof prospect of the ADX-AT-II exploration licence in Upper Austria.
According to the deal, Xstate will cover 40 per cent of the Anshof well drilling cost up to a limit of EUR 1.8 million (A$2.8 million) in exchange for a 20 per cent stake in the Anshof Prospect Area.
Xstate may choose to fund 40 per cent of a second well on Anshof or the Anshof Farm-in Area in exchange for a 20 per cent interest in the whole Anshof Farm-in Area.
Following the completion of the Anshof exploratory well, Xstate has up to three months to chose to participate in the full Anshof Farm-in Area by making a commitment to the second well funding.
ADX and Xstate have agreed to engage in a production sharing contract (PSC) and a joint operating agreement (JOA) to cover the conduct of ongoing operations and the sharing of output after acquiring a participation interest in the Anshof Prospect and the Anshof Prospect Area.
The farm-in HOA incorporates the PSC and JOA concepts.
ADX Executive Chairman Ian Tchacos said the deal represents a vote of confidence in the prospect.
“The farm-in carry and Xstate’s ongoing participation in Anshof will assist ADX to rapidly progress and fund the development of any discovery as well as any ongoing appraisal drilling thereby accelerating the pathway to cash flow,” he said.
Upon fulfilment of Xstate’s obligations, including second well funding, Xstate will own a 20 per cent participation interest in both the Anshof Prospect Area and the Anshof Farm-in Area. ADX will have an 80 per cent stake in both the Anshof Prospect Area and the Anshof Farm-in Area.
ADX will also maintain a 100 per cent stake in the remaining ADX-AT-II exploration licence as well as the whole ADX-AT-I exploration licence.
Andrew Childs, Non-Executive Director of ADX Energy, is also the Executive Chairman of Xstate. Mr Childs reported his conflict at the start of this process and recused himself from all board meetings.
ADX plans to spud the Anshof well in December 2021.
Shares in ADX Energy were down 8.33 per cent to 1.1 cents on the market today.
