Energy Co. Triples Welchau Gas Resources With Deeper Duplex Array Discovery, Eyes FY26 Well Re-Entry Catalyst
Research Report

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Disclosures for Auctus Advisors, ADX Energy Ltd., March 3, 2026

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In a research note dated March 3, 2026, analyst Stephane Foucaud of Auctus Advisors LLP raised his target price on ADX Energy Ltd. (ADXRF:OTCMKTS; ADX:ASX) from AU$0.21 to AU$0.22 per share, maintaining a Buy-equivalent stance.

The revision follows a material upgrade to prospective resource estimates at the company's Welchau prospect in Austria, which now incorporates the deeper Duplex Array 2 gas-condensate interval. ADX shares trade at AU$0.03, implying a potential return to target of 588%.

Resource Upgrade: Welchau Duplex Arrays 1 & 2

The central development in this report is a greater than threefold increase in Welchau's prospective resource estimates. The newly incorporated Duplex Array 2 gas-condensate interval is estimated to contain between 165 and 262 bcf of prospective gas (P50 to Pmean), alongside 5.8 to 9.2 million barrels of associated condensate. Combined across both Duplex Arrays 1 and 2, total prospective resources are now assessed at 230 to 387 bcf of gas plus 8.1 to 13.6 million barrels of condensate on a P50-to-Pmean basis — representing a 3.5x increase versus prior estimates. Auctus notes that the deeper resources could be accessed by extending the existing Welchau-1 wellbore by only approximately 600 metres to reach the shallower duplex.

Two Re-Entry Options; Significant Unrisked NAV

ADX has two potential re-entry options for the Welchau-1 well. The first is a sidetrack to test the up-dip oil target, which carries an unrisked NAV of approximately AU$0.16 per share. The second option is to deepen the existing wellbore to appraise the Duplex Array 1 and 2 gas-condensate interval, with a combined unrisked NAV of AU$0.64 per share. Auctus assumes one of these activities will take place around FY26. A very high risk factor of 10% is currently applied to these prospects, reflecting their exploratory nature. Foucaud notes:

"With the Strait of Hormuz closed and Qatar LNG flows constrained, European natural-gas prices have spiked, creating a more favourable backdrop for junior E&Ps with European gas exposure such as ADX Energy."

Near-Term Catalyst: HOCH Shallow-Gas Spud (April)

ADX plans to spud the HOCH shallow-gas prospect in April. This prospect carries a 57% chance of success and an unrisked NAV of AU$0.01 per share. While modest relative to the Welchau opportunity, it provides a near-term operational milestone for investors.

Valuation

Auctus' total unrisked valuation for ADX, based on its 2P reserves and the Austrian shallow-gas play, is approximately AU$0.08 per share. The firm's risked net asset value (ReNAV) of AU$0.23 per share encompasses: (1) producing assets, (2) shallow-gas targets, (3) Welchau-1, and (4) the Italian permit, on anticipated farm-out terms. The unrisked NAV per share stands at AU$2.017, with the P/Unrisked NAV ratio at 0.0x at the current share price. The diluted share count is 875 million shares, with a market capitalisation of approximately US$18 million and an enterprise value of US$23 million for FY26e.

Key NAV components from the NAV table include: Welchau Deep gas prospect (Duplex Array 1) at AU$0.045/share (25% GCoS); Welchau Deep gas prospect (Duplex Array 2) at AU$0.046/share (10% GCoS); Welchau Updip Oil at AU$0.048/share (30% GCoS); and the Italian C.R150.AU gas prospective resources at AU$0.034/share (25% GCoS).

Financial Metrics

ADX's production for FY26e is forecast at 270 boe/d (total, 6:1 mcf = 1 boe), comprising 247 bbl/d of oil and liquids and 0.1 mmcfd of natural gas. Cash flow from operations is forecast at negative US$1 million in FY26e, with net capex of US$5 million. Net debt is forecast at US$4 million for FY26e. CFPS on a diluted basis is projected at negative US$0.01 per share for FY26e. Proved plus probable reserves stand at 5 mmboe. The EV per boe (2P) is US$4.68 for FY26e.