ADX Energy (ASX:ADX) confirms 29 Bcf of drill-ready shallow gas prospects in Upper Austria

What resource potential and project scope has ADX Energy identified in the ADX-AT-I and ADX-AT-II licences?

ADX Energy Ltd confirmed in its June 19, 2025, ASX release that it has matured seven drill-ready prospects across its ADX-AT-I and ADX-AT-II licences in Upper Austria, all targeting shallow biogenic methane gas accumulations in the Miocene-age Hall Formation. These prospects represent a combined mean prospective resource of 29 Bcf, net to ADX, with geological success probabilities ranging from 51% to 81%.

The company has prioritized a modular, cluster-based development strategy, beginning with the GOLD cluster, which includes three of the highest-confidence prospects—GOLD, GRAB, and ZAUN—within the ADX-AT-II licence area where ADX holds a 100% working interest. The additional PIC and STEY prospects lie outside the defined shallow gas area but remain within ADX-operated licences. Meanwhile, the HOCH and SCHOE targets are housed in the ADX-AT-I acreage, where ADX maintains a 50% operating interest alongside its joint venture partner MND.

All prospects are situated in proximity to existing gas infrastructure, enabling rapid tie-ins and low-cost commercialisation pathways.

How has ADX Energy leveraged seismic data and AI analytics to unlock untapped gas potential in Upper Austria?

ADX Energy’s competitive edge in Upper Austria lies in its exclusive access to one of the most extensive seismic and well databases in the region, a legacy asset base previously held by RAG and OMV. ADX has systematically integrated more than 3,200 square kilometers of 3D seismic data and nearly 1,000 historical well records, spanning from the 1980s through the 2010s, and reprocessed this data using modern imaging and machine learning technologies.

According to the June 2025 update, the firm employed AI-assisted stratigraphic modeling (via PaleoScan™), Amplitude Versus Offset (AVO) seismic analysis, and advanced attribute calibration to map new stratigraphic traps. These methods enabled ADX to not only identify prospects in underappreciated zones but also gain formal government approval in April 2025 to expand the licence boundaries of ADX-AT-I and ADX-AT-II to fully capture the shallow gas potential.

Institutional investors and technical analysts have cited this approach as a strong indicator of de-risked exploration, given the analog ties to 83 known gas fields in the Hall Formation, which have collectively produced 232 Bcf to date.

What is the development plan for the GOLD cluster and how does ADX plan to optimize infrastructure?

ADX Energy plans to begin its multi-well campaign with the GOLD cluster, focusing initially on the GOLD (A & C) sands, which hold a combined mean prospective resource of 7.1 Bcf and geological success rates of 77% and 81% respectively. The target depth for the wells is less than 900 meters true vertical depth (TVD), allowing the use of cost-efficient slim-hole well designs and mobile carrier rigs with small surface footprints.

A single successful well in the GOLD cluster will initially feed into a dedicated 140,000 cubic meter/day gas processing facility. This standalone infrastructure will include a two-phase separator, gas adsorption system, metering station, and a 4.5-kilometer pipeline connecting to Austria’s regional gas grid. In the event of multi-well success, ADX intends to expand this system to support 280,000 cubic meters/day, double the processing capacity, and increase pipeline diameter from 6 inches to 8 inches.

Capital efficiency remains a central theme. The GOLD-1 well is expected to drill in approximately nine days, with completion adding another two days in the success case. Permitting, which takes 3–5 months post-rig contracting, is already underway with the goal of operational readiness by late Q4 2025.

Further cost savings may be achieved if ADX finalises favourable access terms to a third-party wet gas pipeline located less than 1 kilometre from the GOLD cluster site.

How is ADX Energy approaching farmout deals to fund exploration while retaining operational control?

To finance its multi-well shallow gas program without overextending its balance sheet, ADX Energy has initiated farmout discussions targeting its 100%-owned acreage in ADX-AT-II. The company has already received regulatory endorsement for its standard partnership structure, which is designed to accommodate both energy sector participants and institutional investors.

This structure allows for partial asset divestments while enabling ADX to maintain operational control and technical oversight—an arrangement it has successfully implemented in prior transactions in Austria.

According to the June release, land has already been secured for the HOCH and SCHOE wells, with additional discussions ongoing to finalise drill plans for these assets under the ADX-AT-I joint venture. Analysts expect formalised farm-in agreements to materialise ahead of the scheduled late-2025 drilling window.

What are the future prospects for expanding ADX Energy’s shallow gas portfolio in Upper Austria?

Beyond the seven confirmed drill-ready prospects, ADX Energy Ltd is advancing work on four additional shallow gas targets located within the recently varied Shallow Gas Area of its ADX-AT-I licence, where it holds a 50% operating interest. These prospects are currently in the late stages of seismic interpretation and risk assessment, with the company aiming to mature them to drill-ready status by the end of the third quarter of 2025. Simultaneously, ADX is undertaking technical evaluations of deeper zones within the same play window, specifically targeting the Base Hall and Upper Puchkirchen formations, which have also yielded hydrocarbons historically. These efforts are designed to unlock dual-zone gas potential and maximize well economics through multi-target drilling.

The Hall Formation’s geological characteristics—including stacked, thin turbiditic sands and basin-floor fans—provide a strong analogue for repeatable success. This depositional uniformity, combined with high porosity, sweet dry gas, and rapid production rates, offers a compelling exploration and development profile. The reliability of seismic amplitude responses and AVO signatures seen across the basin further bolsters confidence in identifying and derisking new leads.

ADX currently holds an inventory of over 30 leads and prospects across its Upper Austrian acreage, including both shallow and deeper formations. This provides a robust runway for future drilling campaigns beyond the initial cluster developments. Analysts suggest that if the Q4 2025 drilling proves commercially successful, ADX may pursue a rolling development model, deploying similar modular infrastructure and expanding its shallow gas production footprint incrementally over several years.

From a macroeconomic standpoint, Austria’s urgent need to increase domestic gas output—driven by declining imports and EU-wide decarbonisation efforts—makes ADX’s shallow gas play strategically significant. The established regional gas distribution grid, coupled with government openness to exploration investment, creates a favourable environment for fast-track approvals and monetisation.

Strategically, ADX Energy is positioning itself as a technically agile mid-cap gas producer with scalable, low-emission assets tailored to Europe’s evolving energy matrix. Unlike more capital-intensive deep or offshore gas projects, ADX’s shallow gas model aligns with investor appetite for cost-efficient, near-term production. Should market conditions remain favourable—particularly with elevated spot and contract gas prices linked to continued geopolitical uncertainty or LNG supply constraints—analysts believe ADX could unlock considerable shareholder value through a combination of production ramp-up, asset farmouts, and potential re-ratings.