ADX Energy has been awarded a new offshore gas exploration permit in the Sicily Channel, Italy, boasting significant prospective resources and strategic proximity to key infrastructure. The company plans further seismic work and drilling to unlock the permit’s potential.
- ADX awarded 100% interest in C.R150.AU Exploration Permit offshore Italy
- Prospective gas resources estimated at 369 billion cubic feet from five prospects
- Shallow water depths and proximity to TRANSMED pipeline enhance economic viability
- High-quality historic seismic and well data underpin exploration confidence
- Shareholder webinar planned for early September to discuss permit potential
New Frontier in the Sicily Channel
ADX Energy Ltd, through its wholly owned subsidiary Audax Energy S.r.l., has officially secured the C.R150.AU Exploration Permit in the Sicily Channel offshore Italy. This marks a significant expansion for ADX into a region with a promising shallow water gas play, supported by a wealth of historic seismic and drilling data. The permit area is strategically located near existing producing fields such as Lippone-Mazara and Argo-Cassiopea, which have demonstrated stacked gas reservoirs and strong production rates.
Substantial Prospective Resources and Favorable Conditions
The company estimates prospective resources of 369 billion cubic feet (BCF) of gas across five high-graded prospects within the permit. These figures, while prospective and subject to further appraisal, reflect the potential scale of the opportunity. The shallow water depths, mostly less than 100 metres, and relatively modest drilling depths (under 2000 metres) reduce operational complexity and costs. Moreover, the permit’s proximity to the onshore Mazara tie-in point, connected to the TRANSMED pipeline, offers a direct route to Italy’s gas network, enhancing the commercial attractiveness of any discovery.
Geological Confidence Backed by Data
ADX’s confidence is bolstered by high-quality historic 2D seismic data and well results, including the Nilde-2 well which recovered sweet biogenic gas (99% methane). The geological setting is analogous to nearby producing fields, with stacked sandstone reservoirs offering multiple pay zones. The availability of this data not only accelerates the exploration timeline but also reduces risk, as the company can leverage existing knowledge rather than starting from scratch.
Economic and Fiscal Advantages
The permit benefits from favorable fiscal terms, including a 10% royalty and a 28% corporate tax rate, which are competitive within the Mediterranean region. Additionally, Italy’s current gas pricing environment is robust, with prices around EUR 34.2 per megawatt-hour (approximately US$11.7 per thousand cubic feet), reflecting strong demand and limited domestic supply. These factors collectively improve the economic viability of potential discoveries in the permit area.
Looking Ahead
ADX plans to undertake further seismic acquisition and reprocessing, alongside prospect maturation and drilling activities to validate and advance the permit’s potential. The company has scheduled a shareholder webinar in early September to provide more detailed commercial and technical insights. This move into the Sicily Channel aligns with ADX’s broader strategy of leveraging regional expertise, as demonstrated by its previous Mediterranean projects, and positions the company to capitalize on Europe’s growing demand for secure gas supplies.
Bottom Line?
ADX’s Sicily Channel permit acquisition could be a pivotal step in expanding its European gas footprint amid rising energy demand.
Questions in the middle?
- What is the timeline and capital expenditure forecast for seismic and drilling activities in the permit?
- How will ADX navigate potential regulatory and operational challenges in the Italian offshore environment?
- What are the next steps for converting prospective resources into reserves with commercial viability?