ADX Energy Lifts Revenue 71 Percent on Rising Prices and Advances HOCH-1 Testing

Revenue Surge Despite Slight Production Dip

ADX Energy (ASX:ADX) reported a 2% decline in average net production to 197 barrels of oil equivalent per day (BOEPD) for the quarter ended 30 June 2026. Yet, the company's sales revenue soared 71% to A$3.6 million, reflecting a 30% jump in Brent oil prices to US$104.52 per barrel and a 47% rise in European gas prices to EUR48.7 per MWh. This pricing environment has materially boosted ADX’s cash flow, even as production volumes remained largely flat.

HOCH-1 Gas Discovery Advances with Multi-Zone Testing

The standout operational highlight was the HOCH-1 shallow gas discovery well in Upper Austria, which successfully tested its first gas zone at a stable flow rate of 2.7 million standard cubic feet per day (MMSCFPD), equivalent to 450 BOEPD. ADX plans to test up to five additional gas zones within HOCH-1 in the coming quarter, aiming to potentially lift production from this well to between 5 and 6 MMSCFPD (800 to 1,000 BOEPD). This could translate into a 150% production increase and substantially higher revenues for ADX at its 50% economic interest. The company is targeting follow-up drilling at the GOLD-1 and SCHOE-1 shallow gas prospects later this year, with GOLD-1 farmout discussions underway to share drilling costs and risks. These developments position ADX to build on the HOCH momentum and advance towards cash flow independence.

Vienna Basin Production Boost and Near-Field Oil Prospects

Post-quarter, ADX lifted Austrian production by 35% to 285 BOEPD through behind pipe perforations in two Vienna Basin wells. This operational improvement, combined with strong commodity prices, should support revenue growth in the September quarter. Meanwhile, near-field appraisal and exploration around the Anshof oil field are progressing, with the PERG oil prospect nearing drilling readiness in early 2027. ADX holds 100% interest in PERG, which boasts prospective resources exceeding 7 million barrels of oil equivalent, attracting multiple farminee interests. The company is also planning an infill drilling program targeting two wells in the Vienna Basin fields in 2027, leveraging low royalties and existing infrastructure to enhance production economics.

Sicily Channel Exploration Validated by Independent Review

ADX’s offshore Sicily Channel permit continues to attract attention following an independent review by RISC Advisory Pty Ltd, which affirmed the validity of the biogenic gas play and endorsed ADX’s resource estimation methods. The permit holds mean prospective gas resources of 619 billion cubic feet (BCF), with ongoing seismic data acquisition and processing planned to refine prospectivity. The Sicily Channel’s proximity to European gas infrastructure, including the Transmed pipeline, enhances its strategic value amid tightening gas markets.

Capital Raise to Fund Growth and Exploration

To support its ambitious drilling and testing programs, ADX completed a placement in July raising A$3.58 million at A$0.02 per share, including free-attaching options exercisable at A$0.03. The funds will finance multi-zone gas testing at HOCH-1, follow-up shallow gas drilling in Austria, ongoing production optimisation, and Sicily Channel exploration. Board participation in the raise totals A$145,000, pending shareholder approval. This capital injection is critical given the company’s restricted cash position of A$2.2 million at quarter-end, down 55% from the prior quarter due to capex spending of A$3.03 million primarily on HOCH-1 activities.

Ongoing Challenges and Litigation in Romania

ADX’s Romanian operations remain mired in regulatory dispute over the expired Parta exploration licence, with claims of EUR4.2 million by the national regulator rejected by ADX. Litigation is ongoing to overturn these claims, with ADX reserving rights to counterclaim for losses exceeding EUR10 million. The Iecea Mare production licence, however, remains unaffected and operational. This legal uncertainty contrasts with the company’s progress in Austria and Italy but underscores the risks inherent in its portfolio.