ADX Energy Secures US$2m Investment for Romanian Appraisal Program

ADX Energy Ltd (ASX Code: ADX) announced that it has signed an agreement with Reabold Resources Plc (LSE AIM:RBD) (Reabold) to invest US$ 2 million in the recently incorporated Danube Petroleum Limited (Danube), currently a wholly owned ADX subsidiary, which (upon completion of transfers) will hold ADX’ 50% interest in the Parta exploration license (“Parta”), and 100% participating interest in the upcoming Parta Appraisal Program. The Appraisal Program comprises two redrill wells planned in the second half of 2018 to test 33 BCF of prospective and contingent resources defined on recently acquired 3D seismic, spread over a total of 5 gas reservoirs. Upon completion of the US$ 2 million investment Reabold will hold a 29% shareholding in Danube.

Upon completion of the transfer of the Parta exploration and appraisal interests to Danube, ADX will hold 3,759,400 shares in Danube valued at 1GBP per share (US$ 5,000,000 value) and Reabold will subscribe to a total of 1,503,759 shares in two tranches:

  • 375,940 new shares at 1 GBP per share (US$ 500,000)
  • 1,127,819 at 1 GBP per share (US$ 1,500,000) upon the issue by ADX (in its capacity as Operator) of an Authorisation for Expenditure (AFE) for the drilling of the first appraisal well. The funds will be held in an escrow account until the AFE is issued.

Reabold has an option to subscribe to a further 375,940 shares in Danube at 1 GBP per share that expires in 6 months following the completion of the transaction.

ADX has appointed Mr Philip Haydn Slater and Mr Ian Tchacos to the Board of Danube. Reabold has the right to appoint a director to the Board of Danube.

It is the intention of ADX to source a further US$ 2 to 3 million investment in Danube by mid 2018, which will provide sufficient funding to drill a second well in the Parta appraisal program. This will also satisfy ADX’s commitment under the agreement with Reabold to subscribe to or procure an investment into Danube Petroleum of at least £375,940 to fund the agreed work program at 1GBP per share or greater.


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