ADX Energy Ltd
ABN 50 009 058 646
ANNUAL REPORT
31 DECEMBER 2020
ADX ENERGY LTD
CONTENTS
Contents
Page
Corporate Directory………………………………………………………………………………………………………… 2
Chairman’s Report………………………………………………………………………………………………………….. 3
Operations Report…………………………………………………………………………………………………………… 7
Reserves Report……………………………………………………………………………………………………………… 18
Directors’ Report……………………………………………………………………………………………………………… 22
Auditors’ Independence Declaration to the Directors…………………………………………………… 36
Directors’ Declaration……………………………………………………………………………………………………… 37
Consolidated Statement of Profit or Loss and Other Comprehensive Income………………….. 38
Consolidated Statement of Financial Position………………………………………………………………….. 39
Consolidated Statement of Changes in Equity…………………………………………………………………. 40
Consolidated Statement of Cash Flows……………………………………………………………………………. 41
Notes to the Financial Statements…………………………………………………………………………………… 42
Auditor’s Report………………………………………………………………………………………………………………. 82
Additional Shareholder Information………………………………………………………………………………… 86
Tenement Schedule…………………………………………………………………………………………………………. 89
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ADX ENERGY LTD
CORPORATE DIRECTORY
Directors
Ian Tchacos (Executive Chairman)
Paul Fink (Technical Director / CEO)
Andrew Childs (Non-Executive Director)
Edouard Etienvre (Non-Executive Director)
Company Secretaries
Peter Ironside
Amanda Sparks
Registered and Principal Office
Suite 14, 210 Bagot Road
Subiaco, Western Australia 6008
Telephone:
Web Page: www.adxenergy.com.au
Email: admin@adxenergy.com.au
+61 8 9381 4266
Share Registry
Computershare Investor Services Pty Ltd
45 St Georges Terrace
Perth, Western Australia 6000
Telephone: +61 8 9323 2001
Facsimile: +61 8 9323 2033
Solicitors
Steinepreis Paganin
Level 4, Next Building
16 Milligan Street
Perth Western Australia 6000
Bankers
Commonwealth Bank of Australia
1254 Hay Street
West Perth Western Australia 6005
Stock Exchange Listing
Australian Stock Exchange
2 The Esplanade
Perth Western Australia 6000
ASX Code: ADX
Auditors
Rothsay Auditing
Level 1, Lincoln Building
4 Ventnor Avenue
West Perth Western Australia 6005
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ADX ENERGY LTD
CHAIRMAN’S REPORT
Dear Shareholders,
The acquisition of the Gaiselberg and Zistersdorf oil and gas fields in Austria in December 2019 from RAG Exploration &
Production GmbH (RAG E&P) was a transformative step for the Company. ADX achieved the goal of becoming a material
European producer, however the last year has presented an extraordinary set of challenges for ADX due to the COVID-19
Pandemic. Brent crude oil price plunged from above US$ 63.50 per barrel in January 2020 to under US$ 18.55 per barrel
during April 2020. The deterioration in oil price resulted in a dramatic drop in oil revenue which would have been a major
setback for the ambitious growth plans of the Company without the timely hedging of oil production.
ADX Austrian asset position showing producing fields within the OMV dominated Vienna Basin in the East and the Upper Austria AGS
concessions (orange) adjacent to the RAG oil and gas fields in the Molasse Basin east of Munich
The unprecedented effects of the COVID-19 Pandemic during the past year have required the Company’s management to
implement a number of risk mitigation measures including hedging approximately 80% of the oil production and
minimising discretional oil field capital expenditures. In conjunction with the measures to maximise revenue, ADX has been
able to receive financial assistance from the Austrian government including a low interest and security light loan which
allowed the Company to continue to execute its growth strategy in Austria.
Despite COVID-19 Pandemic related local lockdowns and border closures, field oil production remained unaffected due to
the implementation of appropriate work practices and workforce isolation measures by our local ADX management. Unlike
many other jurisdictions where oil sales were impaired, in Austria oil sales were not impacted due to the priority given to
local crude production in the local OMV refinery near Vienna.
Production rates from Gaiselberg and Zistersdorf oil fields during the year were in line with the most likely expectation
based on an independent reserves assessment conducted by ERCE Equipoise Pte Ltd announced in November 2020. Sales
during the year averaged 285 barrels of oil equivalent per day. The results of a base line independent reserves review
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ADX ENERGY LTD
CHAIRMAN’S REPORT
announced in November 2020, detailed in the Operations Report, exceeded ADX prepurchase developed reserves
assessment.
An important element of the transaction with RAG E&P was a Data User Agreement providing ADX with access to RAG’s
exploration data (including 3650 km2 of modern 3D seismic) in Upper Austria. Securing access to this very valuable exploration
data base in Upper Austria surrounding RAG’s core production fields was an important advantage for ADX which provided the
basis for securing exploration licenses in Upper Austria in December 2020. The Upper Austria exploration licenses have
positioned ADX with a ready to drill prospect inventory mapped on modern 3D seismic in a highly prospective and prolific
producing basin (with a 48% historical exploration success ratio in the area).
In addition to securing the ready to drill exploration licenses in Upper Austria, ADX has entered in to binding agreements to
secure access to RAG E&P’s Upper Austria oil and gas gathering, processing and export infrastructure based on firm tariffs.
These access arrangements ensure greater economic certainty and short payback time for development of hydrocarbons
discovered and appraised in the exploration licenses ranging from relatively small appraisal targets to large exploration
prospects.
ADX producing fields in the Vienna Basin as well as the Upper Austria exploration licenses provide multiple, complimentary
opportunities to enhance the Company’s asset base by implementing carbon abatement and renewable technologies
including but not limited to hydrogen (H2) storage, CO2 sequestration and geothermal energy. The combination of
overlapping renewable power generation, onshore reservoirs and production infrastructure in a highly supportive jurisdiction
in the heart of the European Union with its world leading green energy subsidies programs provides an excellent set of
circumstances for renewable project formation.
Photograph showing ADX Gaiselberg and Zistersdorf Field infrastructure proximal to the largest wind farms in Austria suitable for
generating green hydrogen
A key success factor enabling the expansion in the Austrian business has been our highly experienced and well connected
technical, operating and management team in Austria. This has allowed the Company to efficiently manage its Vienna basin
oil fields, assess and secure growth opportunities such as ADX Upper Austrian exploration licenses and undertake
collaborative negotiations with RAG in relation access to their infrastructure in Upper Austria. The Company’s current asset
position is the culmination of over 18 months of technical work, commercial discussions and relationship building with RAG
and the Austrian designated authorities.
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ADX ENERGY LTD
CHAIRMAN’S REPORT
ADX production and management personnel at the Gaiselberg & Zistersdorf field
In contrast to Austrian operating conditions, Romania were severely affected by the COVID-19 Pandemic. Following the
successful drilling, evaluation and suspension of Iecea Mica-1 (IMIC-1) well in September 2019, the completion and testing
of the well was delayed until July 2020 due to the COVID-19 Pandemic related border closures that prevented some
essential equipment and operational services to be imported within the planned timelines. The IMIC-1 well was tested and
subsequently acidized, however, the test results of the main gas reservoir target to date have been below expectation and
further analysis is ongoing to determine the future potential of the reservoir tested to date, other reservoirs encountered
and deeper exploration potential in the well. The analysis of the IMIC-1 results as well as other prospects defined on
recently reprocessed 3D seismic will determine the ongoing appraisal operations utilising the IMIC-1 well and further
opportunities in the Iecea Mare production license.
Location of ADX projects and offices in Europe
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ADX ENERGY LTD
CHAIRMAN’S REPORT
No exploration or appraisal activities were conducted in ADX offshore licenses in Italy or Tunisia during 2020. Activities
relating to the Nilde Oil Field Redevelopment Project in the d 363C.R-.AX permit, offshore Italy, were suspended following
the legislation passed on the 4 th of February 2019 by the Italian Parliament to suspend exploration operations in all permits.
Due to the COVID-19 Pandemic the suspension of exploration and appraisal activities in Italy are expected to be extended
until late 2021. In September 2019, ADX announced activities in Tunisia were being suspended in favour of the
abovementioned more stable and fiscally attractive jurisdictions. During late 2020 ADX finalised arrangements for
withdrawal from Tunisia, deregistered the ADX subsidiary which was the permit holder and closed its branch office.
Despite challenging market conditions for the oil and gas industry in 2020, the Company has continued to build its financial
capability in line with the expansion of its asset base. The rescheduling and deferment repayments under the A$ 3.5 million
loan notes issued in December 2019 to fund the acquisition of the Gaiselberg and Zistersdorf production assets has enabled
ADX to meet its immediate asset objectives and position the Company for further growth opportunities in Austria. The
Company raised A$ 2.38 million of additional equity and secured A$ 1.32 million of debt during the year. After year-end
ADX raised a further A$ 3.0 million pursuant to an over-subscribed Share Purchase Plan announced in December 2020.
The expansion of the Company’s activities in Europe has come at a time where the COVID-19 Pandemic has limited travel
to and from Europe. The combination of a strong team on the ground in Austria supported by a capable corporate,
commercial and finance team in Australia as well as Board representation in the UK with extensive finance capability has
enabled the Company to function efficiently in challenging times.
In summary, your Company has made excellent progress in the development of its full upstream life cycle portfolio in Austria
where it has a unique position as the only foreign producer and explorer as well as leveraging its ideally positioned asset
base to enter the hydrogen and renewable energy business in Europe with minimal initial expenditure and enormous
opportunity. It is only just becoming apparent that well positioned oil and gas companies have both the assets and the skills
to become major players in the green revolution and decarbonisation especially in Austria where there is a commitment to
a six-fold expansion of renewable energy and Europe where over € 150 billion have been committed to finance a hydrogen-
based energy landscape. The ability to utilise our oil and gas fields’ reservoirs once depleted for renewable energy storage
such as hydrogen creates an exciting new business opportunity as well as potentially adding significant value to assets that
would otherwise be abandonment liabilities later in field life, i.e in approximately 10 to 14 years from now.
ADX has developed a very unique position in Austria becoming only one of three production operators and one of two
exploration operators in a small country with excellent fiscal terms and licensing conditions coupled with extensive oil and
gas infrastructure where over 1 billion barrels of oil and approximately 3 Tcf of gas have been discovered. Our focus in the
coming year will be on exploring our “drill ready” portfolio in Upper Austria, extending our production and reserves base in
the Vienna basin, seeking further production opportunities and working with our highly experienced hydrogen expert,
Horváth & Partners to build a viable hydrogen business with the view of establishing ADX as a provider of large-scale
hydrogen and green gas underground storage.
On behalf of the Board of ADX I would like to thank our Shareholders for their ongoing support. We look forward to
reporting on the Company’s activities as we continue to transform ADX into a material European onshore producer and
renewable energy project developer.
IAN TCHACOS
Executive Chairman
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ADX ENERGY LTD
OPERATIONS REPORT
Operations Review
Activities Overview
During the year ended 31 December 2020, ADX has concentrated its activities on production operations at the Gaiselberg
and Zistersdorf fields in in the Vienna Basin, Austria, securing exploration licenses in Upper Austria, commencing feasibility
studies in relation to utilising depleted reservoirs at Gaiselberg and Zistersdorf for hydrogen storage and appraisal operations
in Romania. ADX has established itself as an onshore European producer, developer and explorer in Austria as well as a
potential participant in the European low carbon economy.
ADX’s Austrian based technical team has been central to the Company’s success becoming one of only three production
operators and one of only two exploration operators in Austria. In Romania, ADX is credentialed as a both a production and
exploration operator. Importantly ADX has also developed an operational and technical hub in Austria with the necessary
skills to manage its production operations in Austria, complimentary carbon abatement and renewable technologies as well
as appraisal operations in nearby Romania and the implementation of further new ventures initiatives in Austria.
In Romania, the focus was on testing the IMIC-1 appraisal well within the Iecea Mare production license, preparations for
the IMIC-2 appraisal well and preparations for the acquisition of a 3D seismic program within the Parta exploration permit.
Asset Activities Summary
Gaiselberg and Zistersdorf Production Assets, Vienna Basin - Onshore Austria
ADX is operator and holds a 100% interest in the production licenses
Production and Revenues
During the year, production operations at Gaiselberg and Zistersdorf have continued with low downtime and stable
production rates averaging approximately 285 barrels of oil equivalent per day (“BOEPD”). Due to the low oil price,
investments in the field have been limited to improvement in reliability and field life extension such as well workovers and
successful rectification of process disruptions primarily due to emulsion formation.
Sales revenues during the year totalled €3,277,105. Revenues peaked in January 2020 at € 430,000 per month with a Brent
crude oil price of US$ 63.50 per barrel and dropped to a low €144,000 per month when Brent oil price was at a low of US$
18.95 per barrel in April 2020. The monthly average sales revenue during the year was approximately € 274,000 per month.
The drop in sales revenue during the year was partially compensated by revenues from hedging contracts of € 337,000
from March 2020 onwards.
During 2020, ADX focussed on establishing and ensuring the profitability of its new production business by maintaining
high levels of production uptime and remaining financially robust despite the adverse effects of the COVID-19 Pandemic.
ADX has been able to execute planned well workover jobs as well as a number of facilities enhancements and maintenance
programs required to maintain and enhance field production.
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ADX ENERGY LTD
OPERATIONS REPORT
Winter production operations at Gaiselberg and Zistersdorf
In order to ensure operational continuity and the safety of its personnel, ADX initiated COVID-19 Pandemic precautions
including subdivision of field operations into two separated shifts to ensure continued operations, maintenance work and
workover work. All workspaces were set up to allow individual personal isolation. As a result of the precautions taken there
was no interruption to production, well work or facility enhancement projects.
Reserves reporting for Gaiselberg and Zistersdorf fields
ADX’s technical team has undertaken a base line reserves assessment for Gaiselberg and Zistersdorf. A Competent Person’s
Report (“CPR”) was subsequently undertaken by Independent Consultants ERCE. ERCE was engaged to audit the developed
Reserves held by ADX. The effective date of the CPR was 31 December 2019. The developed Reserves have been classified
as producing and non-producing. The developed producing Reserves comprise oil and gas quantities from existing
producing wells and non-producing developed Reserves from behind pipe reservoirs which will become producing reserves
once perforated to access and produce proven oil and gas reservoirs has been made.
The results of the CPR were announced on the ASX on 5 November 2020. Based on the results of the CPR developed reserves
for the fields exceed ADX prepurchase expectation for 1P (Proven) and 2P (Proven and Probable) developed Reserves by 13%
and 4% respectively.
The unaudited estimated remaining 2P developed Reserves of 0.98 MMboe at 31 December 2018 was announced by ADX
on 2 July 2019. Field production between 31 December 2018 to 31 December 2019 was 0.12 MMboe. The audit work
validates ADX reserves expectation of long-life oil and gas production from the fields which is further supported by ongoing
production trends with highly predictable slow decline production rates.
The CPR was prepared in accordance with the June 2018 SPE/WPC/AAPG/ SPEE/SEG/SPWLA/EAGE Petroleum Resources
Management System (PRMS) as the standard for classification and reporting.
Reserves and production development studies
In addition to the base line assessment, a number of geological and reservoir engineering studies are being conducted with
a view to optimising field depletion from developed Reserves as well as identifying additional reserves potential which
cannot be accessed by the current production wells (undeveloped Reserves).
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ADX ENERGY LTD
OPERATIONS REPORT
ADX is utilising recently available state of the art 3D seismic to assess undeveloped Reserves and appraisal opportunities
within the fields area. The review is utilising recently acquired and reprocessed 3D seismic. The outcome of this work will
be to better define development drilling opportunities within the Fields (Neogene reservoirs) as well as deeper appraisal
opportunities in the proven but not yet fully developed Flysch reservoirs (Paleogene and Cretaceous age).
The figure below is a cross section of a 3D seismic cube image showing on the hanging wall (right side) the younger highly
productive Miocene & Pliocene (“Neogene”) age oil & gas reservoirs (approximately 50 productive reservoirs) and on the
footwall (left) the proven but underdeveloped Mesozoic Upper Cretaceous “Flysch” sandstone reservoirs.
The combination of low risk, long life developed production, high quality oil, low production royalties (less than 1%), shallow
reservoirs (less than 1500m on average) as well as efficient and well-maintained production infrastructure which is
connected to the OMV refinery by export pipeline makes additions to the Field reserves potentially highly profitable (refer
to location map further below).
ADX expects to mature development drilling as well as appraisal opportunities during the coming year which will be
reported to Shareholders at the appropriate time. The increasing oil price trend substantially increases the economic
potential of these undeveloped Reserves, appraisal and production growth opportunities.
.
Cross section of Gaiselberg and Zistersdorf (“RAG Wells”) utilising a 3D seismic cube image. Main oil and gas production is from
Neogene, the older Upper Cretaceous “Flysch” sandstones are oil and gas producing but are still under-developed.The production
license outlines are shown in blue and yellow color on the rendered surface map
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ADX ENERGY LTD
OPERATIONS REPORT
Location map showing Gaiselberg and Zistersdorf fields proximity to Vienna where
the OMV refinery is located and other fields in the basin held by OMV
Hydrogen and CO2 Storage Feasibility Studies
Oil and gas fields, such as ADX’ Zistersdorf and Gaiselberg fields with reservoirs and infrastructure located near sources of
renewable electricity which can be used for the production of hydrogen through electrolysis, are ideally positioned to
economically, reliably and safely store hydrogen. ADX fields are also connected to gas export infrastructure which can be
utilised for hydrogen injection and transportation.
There is increasing potential funding, subsidies and carbon credits for CO2 storage and renewable technologies in Europe. In
Austria alone the currently available 3.8 GW of wind and solar energy capacity is planned to be increased to 21 GW by 2030
according to European Union (EU) guidelines, which is expected to create significant excess energy for green hydrogen
generation and high demand for energy storage in general.
Based on the economic and physical fundamentals outlined above ADX undertook technical studies to identify depleted
reservoirs within the ADX fields at Zistersdorf and Gaiselberg which provide an excellent opportunity to develop a hydrogen
storage business.
After year-end ADX announced entering into a consulting agreement with Horváth & Partners (Horváth) to support ADX
for pre-feasibility studies in relation to hydrogen storage.
Horváth have a significant track record in the hydrogen business, starting with projects in Germany where strategies for
hydrogen subsurface storage were developed for salt caverns in Northern Germany. Horváth are also part of the “Evety”
Joint Venture (JV). JV partner “OGE” is Germany’s largest gas transmission operator with a network of 12,000 km in
Germany alone. The other partner “TÜV SÜD” is a German globally active company with over 25,000 employees who
optimise leading edge plant technology and complex systems. Their core business today is technical innovation in the fields
of autonomous driving, renewable energy and hydrogen.
The objective of the Horváth studies is building a viable hydrogen business establishing ADX as a provider of large-scale
hydrogen and green gas underground storage. The first phase of the study during the first half of 2021 seeks to reach the
following milestones:
Establish partnerships with major green energy providers such as the wind power operators next to the Gaiselberg and
Zistersdorf fields;
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ADX ENERGY LTD
OPERATIONS REPORT
Determine the technical viability of reservoirs within ADX’ fields as large-scale subsurface hydrogen storage facilities;
The potential of converting green hydrogen and carbon dioxide into green methane which can be sold through the gas
pipeline infrastructure as well as pure hydrogen;
Form a joint venture with one or several nearby green energy providers to access European Green Energy
Transformation funding; and
Establish the technical viability of underground energy storage at the ADX fields and ADX as a certified participant in
Europe’s rapidly expanding energy storage market.
The potential for hydrogen storage is created by anticipated exponential growth in wind and solar energy production in
Austria as a result of the recently ratified government directive for a 6 times increase in power generation (source: Austrian
Power Grid AG). It is anticipated that during summer the renewable energy facilities will create an excess capacity of
around 2 TWh per month. This energy has then to be either “destroyed” or exported at great cost if no large scale energy
storage is available.
In the anticipated second phase studies ADX and Horváth intend to establish a detailed business plan and financing plan
for the large-scale expansion and establishment of a profitable and growing energy storage and green gas business which
may be linked to carbon dioxide sequestration.
The ability to potentially utilise the ADX fields for renewable energy storage can create a new business opportunity as well
as adding significant value to an asset that would otherwise be an abandonment liability later in field life.
Upper Austria Exploration Licenses, Molasse Basin - Onshore Austria
ADX is operator and holds a 100% interest in the exploration licenses ADX-AT-1 and ADX-AT-2.
ADX submitted applications during the year and engaged in discussions with the responsible Austrian authorities for the
award of two exploration, production and geothermal concessions (“AGS”) in Upper Austria (Molasse Basin). This has
resulted in the finalisation of a formal application document defining mutually agreed terms and conditions in accordance
with fiscal and legal framework. In January 2021 ADX announced the execution of cconcession agreements for exploration,
production and gas storage in Upper Austria (Upper Austria AGS) between ADX and Federal Ministry responsible for Mining
(“BMLRT”) on behalf of the Republic of Austria.
The signing of the Upper Austria AGS followed a comprehensive federal approval process including the Finance Ministry
which demonstrates Austria’s continued commitment to domestic energy sector investment. Austria’s energy policy is
premised on a preference for oil and gas produced in country where strict greenhouse gas emissions and environmental
standards can be guaranteed. This provides a further future market advantage when carbon border taxes will be
introduced for less environmentally sustainable imported products.
The signing of the Upper Austria AGS is the culmination of over 18 months of technical work, commercial discussions and
relationship building with RAG E&P and the Austrian designated authorities.
The key attributes of the Upper Austria AGS licenses are as follows:
ADX technical evaluation of high graded areas has been enabled by access to a 3D seismic data set with US$ 100 million
replacement value;
Low risk appraisal and high impact exploration prospects have been matured that are proximal to infrastructure where
historical exploration success rates of approximately 48% have been recorded over a number of different play types;
The areas include a drill ready portfolio including the availability of multiple drill sites ready for appraisal and
exploration operations;
The majority of the portfolio is proximal to existing infrastructure which enables rapid and cost-effective
commercialisation;
A high impact, low cost, shallow gas thrust imbricates play has been identified on 3D seismic and gas related
geophysical anomalies;
Several prospects in the portfolio have dual hydrocarbon and geothermal objectives in geothermal reservoirs that are
proven in the area where extensive development has already taken in the basin in nearby Germany; and
Strong demand for geothermal developments adds further value potential and risk diversification to portfolio.
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ADX ENERGY LTD
OPERATIONS REPORT
Prospect Inventory
The drill ready exploration prospect inventory for the Upper Austria AGS licenses is summarised in the prospective resources
histogram below - showing the best technical case prospective resources (“Resources”) for each prospect. The prospects
range from just over 1 to over 20 MMBOE Resources. The average prospect Resource size is 5.8 MMBOE. Prospects less than
1 MMBOE are profitable due to proximity to modern infrastructure. The larger prospects exceeding a 5 MMBOE Resources
if successful are highly valuable in an onshore setting proximal to infrastructure. Refer to ASX releases 30 November 2020
when above resource estimates were first announced and 30 March 2021 when the resource estimates were subsequently
revised.
5.8 mmboe average
prospect size
Resource Size Distribution for top ten matured exploration prospects (lognormal fit)
where
denotes an oil prospect and
denotes a gas prospect
The recent historical exploration success ratio utilising 3D seismic has been approximately 48%. The licenses also include
lower risk appraisal opportunities or RAG field extensions within ADX exploration license areas. ADX is fortunate to have
an experienced and successful exploration team that has successfully worked the basin for RAG prior to joining ADX.
Upper Austria AGS License Terms
The total term for the Upper Austria AGS is 16 years without any relinquishment and the first 4 year firm period
commencing 1st January 2021. ADX has entered a 2 well drilling commitment, however the minimum financial obligation
to keep the licenses in good standing is € 2.2 million for the first period.
Licensing System
Austria does not have a typical open door licensing round system for obtaining oil and gas rights, however the concession
agreement negotiations with the respective Mining Authorities and the subsequent speedy government ratification process
which required finance ministry approvals has highlighted the efficiency and the government support for oil and gas activities
and investment. The acceptance of ADX as an oil and gas operator and producer in Lower Austria was a key milestone and
pre-condition for achieving the historic award of oil and gas concessions in Austria, where only OMV and RAG have been the
only companies to undertake exploration operations for almost a century.
A significant advantage of the system is the ability to make exploration and production area extensions, part relinquishments
and secure drilling location approvals in relatively short time frames of a few months.
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ADX ENERGY LTD
OPERATIONS REPORT
Infrastructure Access Agreement
In December 2020 ADX signed an infrastructure agreement with RAG E&P, a wholly owned subsidiary of RAG Austria AG,
covering principal legal and commercial terms for guaranteed access to a modern and extensive oil and gas infrastructure
system. The agreements provide attractive commercial terms for the access of future ADX oil and gas production from the
Upper Austria AGS concessions which surround the producing fields and infrastructure owned and operated by RAG E&P.
The agreement provides greater economic certainty for development of hydrocarbons discovered and appraised in the
concessions ranging from relatively small appraisal prospects to large exploration prospects. It is envisaged that the
arrangements will be beneficial for both parties ensuring that hydrocarbons from the basin can be produced efficiently and
cost effectively by utilising available capacity and maximising throughput through RAG E&P’s facilities, thereby lowering
the production costs for both parties.
Map showing ADX Upper Austria AGS exploration areas proximal to RAG’s infrastructure and fields. The round green dots indicate a
rich portfolio of oil and gas prospects and leads covered by 3D seismic (dark grey areas)
Farmout Process
The combination of a multi prospect portfolio, mature and drill ready prospect inventory focused on proven exploration
plays with certainty of access to infrastructure on beneficial terms is expected to be attractive for prospective farminees
who are seeking a rapid pathway from exploration or appraisal drilling to production cash flow. ADX will commence a
systematic farmout process by the end of the first quarter of 2021. The process has already commenced with a number of
interested companies approaching ADX ahead of the formal farmout process planned to start in Q2 2021.
ADX is confident of being able to complete a successful farmout process because it can offer interested investors or
companies competitive advantages compared to other opportunities available on the market, such as a “drill ready”
prospect and appraisal portfolio fully covered by modern 3D seismic with very fast development and financial pay out times
in case of a discovery, and of additional importance, the portfolio is well balanced and catering for a range of different risk
appetites.
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ADX ENERGY LTD
OPERATIONS REPORT
New Venture Opportunities – Upper Austria
In addition to the above-mentioned license applications ADX continued to pursue further collaboration opportunities
pursuant to a non-binding letter of intent with RAG (seller of Gaiselberg and Zistersdorf fields) in relation to other
production assets in Upper Austria.
ADX is also reviewing further appraisal, exploration and brownfield redevelopment opportunities in Upper Austria. Having
established an AGS concession in Upper Austria ADX has identified a number of both exploration and production
rejuvenation growth opportunities which can be secured by extending ADX current Upper Austria AGS areas.
Iecea Mare Production License and Parta Exploration License - Onshore Romania
ADX holds a 49.2% shareholding in Danube Petroleum Limited (Danube). The remaining shareholding in Danube is held by
Reabold Resources Plc. Danube via its‘ wholly owned subsidiary, ADX Energy Panonia srl, holds a 100% interest in the Parta
Exploration license (including a 100% interest in the Parta Appraisal Sole Risk Project) and a 100% interest in the Iecea Mare
Production license. ADX is the operator of the permit pursuant to a Services Agreement with Danube
The IMIC-1 well was successfully drilled and evaluated in September 2019. Well logging results and subsequent
interpretation by two independent expert companies, including wireline logging contractor Weatherford identified three
potential gas pay zones within well IMIC-1. ADX suspended the well for production testing and production operations.
ADX prepared for the well test of IMIC-1 in the second quarter of 2020, having subsequently obtained all regulatory
approvals and contracts signed for long lead items, well testing equipment and a workover rig. ADX also progressed the
preparations for design, planning and drilling of IMIC-2, which is located approximately 2km northeast of the successful
IMIC-1 well.
Due to the COVID -19 Pandemic Romania’s borders were closed from March to late June 2020, restricting access to essential
personnel and imported goods. As a result of the border closures, a number of oil field services could not be accessed
during this period which delayed a number of planned appraisal and exploration activities.
The timing of the IMIC-1 testing program was initially determined by the time required to manufacture and deliver well down
hole well equipment which enabled the well to be completed and tested as a future production well without further
intervention. Work over rig mobilisation commenced on the 19 June 2020 in preparation for production testing the IMIC-1
well.
The testing programme included the installation of permanent production tubing and flow control equipment in the well
prior to perforation and production testing of the well. Well production equipment was run into the well and perforated
to initiate flow from the Lower Pannonian “Pa IV” gas reservoir (the Pa V and Pa III potential gas reservoirs were not
perforated during the program). Testing concentrated on the PA IV sand which is a proven reservoir and appeared to have
the greatest reserves potential of the 3 reservoir intervals intersected in the IMIC-1 well.
Testing operations yielded some well production inflow of gas based on wellhead pressure measurements at surface
following well perforation and confirmed from subsequent down hole sampling, however gas flow to surface from the well
was not achieved during the first test.
The flow test results from the first test suggest reservoir damage and mud filtrate build up around the well bore given that
the IMIC-1 well encountered good reservoir porosity (20% within the net pay gas zone) and gas saturations in the Pa IV
sandstone reservoir based on electric wireline logs and gas shows (gas inflow to the drilling mud) while drilling late last
year. In addition, well test results from the nearby historic well drilled in the mid 80’s flowed at up to 1 MMSCFPD and
subsequent rock typing analysis from cuttings from IMIC-1 drilling together with modern petrophysical analysis from the
well logs indicated good Pa IV gas reservoir permeability.
In early September 2020, ADX undertook acidisation of the Pa IV gas interval resulting in gas flow to surface confirming
excellent dry gas quality (methane) and a significantly faster pressure build up than previously observed. The failure to flow
at commercial gas rates without any well stimulation is interpreted as drilling and completion induced localised reservoir
damage rather than an intrinsic reservoir quality issue of the Pa IV reservoir. The well was placed under pressure build up
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ADX ENERGY LTD
OPERATIONS REPORT
observation and built up very quickly to a bit over 160 bar wellhead pressure caused by gas inflow with significantly less
associated water volumes compared to the first build up tests.
ADX together with locally experienced well testing and engineering companies such as Tacrom have designed a potential
skin frac job to test the concept of increasing the effective near wellbore flow area of the Pa IV reservoir perforation in
discovery well IMIC-1.
The completed operational execution program also foresees a relatively low-cost option to perforate the slightly deeper PA
V reservoir zone which was a proven oil producer in the ADX Iecea Mare production license just a few kilometres further
north (IM-30 well, 2.5 km north of IMIC-1) and is gas and condensate bearing in well IMIC-1 (ASX release from 29 August
2019).
Prior to a final decision on well stimulation operations and the drilling of the nearby IMIC-2 prospect ADX has completed the
reprocessing of the Iecea Mare 3D seismic and commenced a detailed and integrated technical evaluation of the remaining
prospectivity of the area covered by the 3D seismic. The figure below shows a comparison example of the newly reprocessed
(PreSTM) seismic relative to the original data. While the improvements in the shallower section – including the IMIC-1 Pa IV
reservoir- are good, the deeper Miocene to basement section has significantly improved. Both the Badenian and basement
are proven reservoirs in the area and hence a prospectivity upgrade is expected once the ongoing technical evaluation based
on IMIC-1 well results and the newly reprocessed 3D seismic has been completed.
3D reprocessing (right hand seismic section) has resulted in significant improvements especially in the deeper prospective section
The integrated interpretation of the Iecea Mare 3D seismic area with a special focus on IMIC-1 results, implications for
planned IMIC-2 well and remaining (deeper) prospectivity has commenced during the last quarter 2020 and is expected to
be completed during the first half of 2021.
As a subsequent event, ADX also has completed AVO 3D processing to further derisk gas prospects already identified on the
original 3D data.
- 15 -
ADX ENERGY LTD
OPERATIONS REPORT
Parta license exploration
Despite COVID-19 related delays and restrictions on personnel movements, ADX made good progress with Hungarian based
seismic contractor AGS (Viking) to acquire 3D seismic during Q3 2020. All key landowner and necessary authority permits
were obtained, with the final environmental permits expected received during the third quarter of 2020.
While all landowner, local authority and environmental permits were obtained for the approximately 100 square km survey,
the survey had to be cancelled because the 3D funding farminee Parta Energy Ltd, a wholly owned subsidiary of Tamaska Oil
& Gas (“Tamaska”) had informed ADX on extremely short notice that it would not proceed with the farmin transaction. This
came as a surprise to ADX and its Hungarian seismic contractor who had already mobilised to Romania for the survey on
good faith (refer to ASX announcement from 8 September 2020).
ADX has continued discussions with the seismic contractor to seek cost efficient options for a later survey start up and is also
in discussions with the Romanian authorities to consider the unforeseeable event caused by the surprise withdrawal of
funding partner Tamaska for an additional license extension of the current period. ADX is also engaging with landowners and
local authorities to extend all necessary permits.
Tamaska Farmin Agreement Payment Default
As a result of default by Parta Energy Pty Ltd (PE) (being a wholly owned subsidiary of ASX listed Tamaska) in relation to a
farmin obligation pursuant to a farmin agreement between ADX Energy Panonia Srl, Danube and PE (“Farmin Agreement”),
ADX has had to put on hold the mobilisation of the 3D exploration seismic crew and has minimised ongoing financial
exposure in relation to the 3D exploration seismic program operations with the seismic contractor.
ADX has prepared all supporting evidence and a writ of summons with a reputed Perth-based law firm to pursue on behalf
of Danube what ADX is advised is a fair claim of damages caused by Tamaska’s default.
Way Forward
The planned activities for 2021 include the remapping of reprocessed Iecea Mare 3D seismic data set, the further evaluation
of Iecea Mica-1 (IMIC-1) well test results and evaluation of proposal for an acid frac program based on the encouragingly
fast pressure build up seen for the Pa IV reservoir and the progress of appropriate legal recourse in relation to the default
under the Farmin Agreement by Tamaska.
In addition to the above activities a third party review of the Parta prospectivity, especially within the planned 3D area is
underway with a view to a renewed farmout effort for the Parta license.
Nilde Oil Field Redevelopment d 363C.R-.AX PERMIT - Offshore Italy
ADX is operator and holds 100% interest in the d 363C.R-.AX Exploration Permit
ADX has commenced a process with the Italian Designated Authority to convert the exclusively awarded application to a
ratified license. This process was commenced after the award by the Ministry of Industry.
No further activities have been undertaken since ADX was advised on the 4th of February 2019 that the Italian Parliament
passed legislation to suspend exploration activities in all permits that have been approved or are in the process of being
approved for a period of up to 18 months to enable the government authorities to evaluate the suitability of exploration
areas for sustainable hydrocarbon exploration and production activities. Due to the COVID-19 Pandemic the suspension of
exploration activities is expected to be extended until late 2021.
ADX has been informally advised by the Italian Licensing Authorities that it has demonstrated sufficient financial capability
for the ratification of the permit upon resumption of oil and gas activities following earlier announced farmin by SDP Services
Limited.
- 16 -
ADX ENERGY LTD
OPERATIONS REPORT
Kerkouane Permit, Offshore Tunisia
On September 2019 ADX announced that it had declared force majeure in relation to the Dougga project due to the
unexpected termination of a drilling contract by Noble Services International Limited for the Globe Trotter II drill ship
contracted for the drilling of the Dougga Sud appraisal well. Activities in Tunisia were subsequently suspended in favour of
the abovementioned more stable and fiscally attractive jurisdictions. During 2020, ADX completed a withdrawal from Tunisia,
deregistered the ADX subsidiary which was the permit holder and closed its branch office.
Summary of Planned Activities during 2021
The Company plans to focus its operating activities during 2021 primarily in Austria and to a lesser extent in Romania.
Austrian planned activities are summarised as follows:
Ongoing well workover work on the Zistersdorf and Gaiselberg fields to enhance production rates;
Ongoing geotechnical evaluation utilising a newly processed 3D seismic data set as well as engineering and planning
work with a view to maturing sidetrack and infill development wells in the Zistersdorf and Gaiselberg fields as well as
appraisal opportunities in the underdeveloped Flysch reservoirs;
Undertake an independent reserves review for the Zistersdorf and Gaiselberg fields following completion of the
current Zistersdorf and Gaiselberg field technical review utilising the new 3D seismic data set;
Complete prefeasibility studies, develop a joint venture with green power producers and establish a business case for
H2 storage at the Gaiselberg and Zisterdorf fields;
Progress a farmout in relation to the Upper Austria AGS exploration and appraisal licenses with a view to drilling an
exploration well during the second half 2021; and
Ongoing pursuit of further collaboration opportunities pursuant to a non-binding letter of intent with RAG in relation
to other assets in Upper Austria.
Romanian planned activities are summarised as follows:
Remapping of reprocessed Iecea Mare 3D seismic data set to determine the potential of IMIC-1 and IMIC-2 for further
appraisal and other potential targets within the Iecea Mare production license;
Further evaluation of IMIC-1 well test results and evaluation of proposal for an acid frac program based on the
encouragingly fast pressure build up seen for the Pa IV reservoir;
Progress an appropriate legal recourse in relation to the default under the Farmin Agreement by Tamaska; and
Review the Parta prospect portfolio with a third party especially on the planned Parta 3D area with a view to a renewed
farmout process for Parta.
- 17 -
ADX ENERGY LTD
RESERVES REPORT
ADX purchased the Gaiselberg and Zistersdorf oil and gasfields in the Vienna basin, Austria in December 2019 from RAG
Exploration & Production GmbH.
A Competent Person’s Report (“CPR”) was undertaken by Independent Consultants ERCE Equipoise Pte Ltd (ERCE). ERCE was
engaged to undertake an audit for the developed Reserves held by the ADX Energy Ltd Group (ADX) at the Zistersdorf Field
and Gaiselberg Field in the Vienna Basin, Austria. The effective date of the CPR was 31 December 2019 (the “Effective Date”).
The developed Reserves have been classified as producing and non-producing. The developed producing Reserves comprise
oil and gas quantities from existing producing wells and non-producing developed Reserves from behind pipe reservoirs which
will become developed producing Reserves once perforated to access and produce proven oil and gas reservoirs.
The following Reserves are an independently audited estimate of developed Reserves announced on the ASX on 5 November
2020. The Company intends to undertake an independent audit on an annual basis.
A summary of the Austrian licence interests held by ADX is summarised below.
Note:
Both licence areas are covered by an Austrian mining law by which production rights are granted indefinitely.
2020 Reserves Audit Results
The following tables are the results of ERCE’s independent audit of the quantities of oil and gas to be produced from existing
wells from ADX licence interests in the Vienna basin, as of 31 December 2019.
The aggregate oil and gas developed (developed producing and developed non-producing) Reserves both in total and
attributable to ADX’s working interests, are shown below.
Results extracted from ERCE’s developed Reserves CPR as of 31 December 2019
Notes
1. Company Working Interest Reserves are based on the working interest share of the field gross Reserves and are prior to
deduction of any royalties.
2. Developed Producing Reserves comprise production from existing producing wells.
3. Developed Non-Producing Reserves comprise production from future completions of behind pipe reservoirs.
4. Totals may not sum arithmetically due to rounding.
- 18 -
BlockWorking InterestLicence ExpiryField(s)Zistersdorf Field100%NAZistersdorfGaiselberg Field100%NAGaiselbergADXs Licence Interests, Vienna Basin, Austria1P2P3P1P2P3PDeveloped Producing0.340.530.860.340.530.86Developed Non- Producing0.160.280.50.160.280.5Total0.50.811.360.50.811.36ADX Developed Oil Reserves as of 31 December 2019Gross Oil Reserves (MMstb)Working Interest Oil Reserves (MMstb)
ADX ENERGY LTD
RESERVES REPORT
Results extracted from ERCE’s developed Reserves CPR as of 31 December 2019
Notes
1. Company Working Interest Reserves are based on the working interest share of the field gross Reserves and are prior to
deduction of any royalties.
2. Developed Producing Reserves comprise production from existing producing wells.
3. Developed Non-Producing Reserves comprise production from future completions of behind pipe reservoirs.
4. Totals may not sum arithmetically due to rounding.
Results extracted from ERCE’s developed Reserves CPR as of 31 December 2019
Notes
1. Company Working Interest Reserves are based on the working interest share of the field gross Reserves and are prior to
deduction of any royalties.
2. Developed Producing Reserves comprise production from existing producing wells.
3. Developed Non-Producing Reserves comprise production from future completions of behind pipe reservoirs.
4. Totals may not sum arithmetically due to rounding.
5. 1 MMboe - million of barrels of oil equivalent including solution gas. Barrels of oil equivalent calculated based on: 5,841
standard cubic feet (scf) = 1 boe
6. The term Barrels of Oil Equivalent (BOE) allows for a single value to represent the sum of all the hydrocarbon products
that are forecast as resources. Gas quantities are converted to an oil equivalent based on a conversion factor that is
recommended to be based on a nominal heating content or calorific value equivalent to a barrel of oil.
2020 Oil and Gas Production
The following table shows oil and gas production from the Gaiselberg and Zistersdorf fields during the 2020 Calendar Year.
- 19 -
1P2P3P1P2P3PDeveloped Producing0.190.320.590.190.320.59Developed Non- Producing0.090.180.310.090.180.31Total0.280.50.90.280.50.9ADX Developed Gas Reserves as of 31 December 2019Gross Gas Reserves (Bscf)Working Interest Gas Reserves (Bscf)1P2P3P1P2P3PDeveloped Producing0.370.580.960.370.580.96Developed Non- Producing0.180.310.550.180.310.55Total0.550.901.510.550.901.51ADX Developed Oil Equivalent Reserves as of 31 December 2019Gross Oil Equivalent Reserves (MMboe)Working Interest Oil Equivalent Reserves (MMboe)
ADX ENERGY LTD
RESERVES REPORT
2020 Year End Reserves Reconciliation.
The following tables summarise ADX’s unaudited estimates of developed Reserves as of 31 December 2020, based on the
ERCE’s audited developed Reserves as of 31 December 2019 less production from the Gaiselberg and Zistersdorf fields
during the intervening period.
Above results are ADX‘s unaudited developed reserves as of 31 December 2020
Notes
1. Company Working Interest Reserves are based on the working interest share of the field gross Reserves and are prior
to deduction of any royalties.
2. Developed Producing Reserves comprise production from existing producing wells.
3. Developed Non-Producing Reserves comprise production from future completions of behind pipe reservoirs.
4. Totals may not sum arithmetically due to rounding.
Above results are ADX‘s unaudited developed reserves as of 31 December 2020
Notes
1. Company Working Interest Reserves are based on the working interest share of the field gross Reserves and are prior
to deduction of any royalties.
2. Developed Producing Reserves comprise production from existing producing wells.
3. Developed Non-Producing Reserves comprise production from future completions of behind pipe reservoirs.
4. Totals may not sum arithmetically due to rounding.
Above results are ADX‘s unaudited developed reserves as of 31 December 2020
Notes
1. Company Working Interest Reserves are based on the working interest share of the field gross Reserves and are prior
to deduction of any royalties.
2. Developed Producing Reserves comprise production from existing producing wells.
3. Developed Non-Producing Reserves comprise production from future completions of behind pipe reservoirs.
4. Totals may not sum arithmetically due to rounding.
5. 1 MMboe - million of barrels of oil equivalent including solution gas. Barrels of oil equivalent calculated based on:
5,841 scf = 1 boe
6. The term Barrels of Oil Equivalent (BOE) allows for a single value to represent the sum of all the hydrocarbon products
that are forecast as resources. Gas quantities are converted to an oil equivalent based on a conversion factor that is
recommended to be based on a nominal heating content or calorific value equivalent to a barrel of oil.
- 20 -
1P2P3P1P2P3PDeveloped Producing0.250.440.770.250.440.77Developed Non- Producing0.160.280.50.160.280.5Total0.410.721.270.410.721.27Working Interest Oil Reserves (MMstb)ADX Developed Oil Reserves as of 31 December 2020Gross Oil Reserves (MMstb)1P2P3P1P2P3PDeveloped Producing0.120.250.520.120.250.52Developed Non- Producing0.090.180.310.090.180.31Total0.210.430.830.210.430.83ADX Developed Gas Reserves as of 31 December 2020Gross Gas Reserves (Bscf)Working Interest Gas Reserves (Bscf)1P2P3P1P2P3PDeveloped Producing0.270.480.860.270.480.86Developed Non- Producing0.180.310.550.180.310.55Total0.440.791.410.440.791.41Gross Oil Equivalent Reserves (MMboe)Working Interest Oil Equivalent Reserves (MMboe)ADX Developed Oil Equivalent Reserves as of 31 December 2020
ADX ENERGY LTD
RESERVES REPORT
Petroleum Resources Management System
All reserves are estimated by deterministic estimation methodologies consistent with the definitions and guidelines in the
Society of Petroleum Engineers (SPE) 2007 Petroleum Resources Management System (PRMS)
PRMS Reserves Classifications Used
1P Denotes low estimate of Reserves (i.e., Proved Reserves). Equal to P1.
2P Denotes the best estimate of Reserves. The sum of Proved plus Probable Reserves.
3P Denotes high estimate of Reserves. The sum of Proved plus Probable plus Possible Reserves.
1. Developed Reserves are quantities expected to be recovered from existing wells and facilities.
a. Developed Producing Reserves are expected to be recovered from completion intervals that are open and
producing at the time of the estimate.
b. Developed Non-Producing Reserves include shut-in and behind-pipe reserves with minor costs to access.
2. Undeveloped Reserves are quantities expected to be recovered through future significant investments.
A. Proved Reserves are those quantities of Petroleum that, by analysis of geoscience and engineering data, can be
estimated with reasonable certainty to be commercially recoverable from known reservoirs and under defined technical
and commercial conditions. If deterministic methods are used, the term “reasonable certainty” is intended to express a
high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least
a 90% probability that the quantities actually recovered will equal or exceed the estimate.
B. Probable Reserves are those additional Reserves which analysis of geoscience and engineering data indicate are less
likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. It is equally likely
that actual remaining quantities recovered will be greater than or less than the sum of the estimated Proved plus Probable
Reserves (2P). In this context, when probabilistic methods are used, there should be at least a 50% probability that the
actual quantities recovered will equal or exceed the 2P estimate.
C. Possible Reserves are those additional Reserves that analysis of geoscience and engineering data suggest are less likely
to be recoverable than Probable Reserves. The total quantities ultimately recovered from the project have a low probability
to exceed the sum of Proved plus Probable plus Possible (3P) Reserves, which is equivalent to the high-estimate scenario.
When probabilistic methods are used, there should be at least a 10% probability that the actual quantities recovered will
equal or exceed the 3P estimate. Possible Reserves that are located outside of the 2P area (not upside quantities to the 2P
scenario) may exist only when the commercial and technical maturity criteria have been met (that incorporate the possible
development scope). Standalone Possible Reserves must reference a commercial 2P project.
Persons compiling information about Hydrocarbons. Pursuant to the requirements of the ASX Listing Rule 5.31, the
unaudited technical and reserves information contained in this report has been prepared under the supervision of Mr Paul
Fink. Mr Fink is Technical Director of ADX Energy Limited, is a qualified geophysicist with 23 years of technical, commercial
and management experience in exploration for, appraisal and development of oil and gas resources. Mr. Fink has consented
to the inclusion of this information in the form and context in which it appears. Mr. Fink is a member of the EAGE (European
Association of Geoscientists & Engineers) and FIDIC (Federation of Consulting Engineers).
ERCE has conducted an independent audit of the developed Reserves, as of 31 December 2019, and consented to the
inclusion of information specified as ERCE audited values in this report.
- 21 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Your Directors present their report for the year ended 31 December 2020.
DIRECTORS
The names and particulars of the Directors of the Company in office during the year and up to the date of this report were
as follows. Directors were in office for the entire year unless otherwise stated.
Ian Tchacos
B.Eng (Mech.)
Executive Chairman (Appointed 2 March 2010)
Mr Tchacos was appointed as Non Executive Chairman of ADX on 2 March 2010 and appointed as Executive Chairman on
28 September 2015. He is a Petroleum Engineer with over 30 years international experience in corporate development
and strategy, mergers and acquisitions, petroleum exploration, development and production operations, commercial
negotiation, oil and gas marketing and energy finance. He has a proven management track record in a range of
international oil company environments. As Managing Director of Nexus Energy he was responsible for this company’s
development from an onshore micro cap explorer to an ASX top 200 offshore producer and operator.
Other directorships of listed companies in the last three years: 3D Oil Limited (current) and Xstate Resources Limited (until
26 November 2019).
Paul Fink
MSc (Geophysics)
Executive Director (Appointed 25 February 2008)
Mr Fink has over 25 years of petroleum exploration and production industry experience in technical and management
positions. He is a graduate from the Mining University of Leoben, Austria and started his career as a seismic data processing
geophysicist and then worked predominantly on international exploration and development projects and assignments in
Austria, Libya, Bulgaria, UK, Australia and Pakistan as Exploration and Reservoir Manager for OMV. In 2005 Paul started his
own petroleum consultancy working on projects in Romania and as Vice President for Focus Energy, leading their highly
successful exploration and development campaign in Western India. Paul was a key team member for the resulting highly
successful IPO on the London Stock Exchange (Indus Gas) which lead to a market capitalisation of over GBP 1.5 MM , partly
due to 3rd party reserves audits managed by Paul.
Other directorships of listed companies in the last three years: Nil.
Andrew Childs
BSc (Geology and Zoology)
Non-Executive Director (Appointed 11 November 2009)
Mr Childs graduated from the University of Otago, New Zealand in 1980 with a Bachelor of Science in Geology and Zoology.
Having started his professional career as an Exploration Geologist in the Eastern Goldfields of Western Australia, Mr Childs
moved to petroleum geology and geophysics with Perth based Ranger Oil Australia (later renamed Petroz NL). He gained
technical experience with Petroz as a Geoscientist and later commercial experience as the Commercial Assistant to the
Managing Director. Mr Childs is Chairman of Sacgasco Limited and Managing Director of Petroleum Ventures Pty Ltd.
Other directorships of listed companies in the last three years: Sacgasco Limited and Xstate Resources Limited (both
current).
Edouard Etienvre
MSc (Management)
Non-Executive Director (Appointed 7 January 2020)
Mr Etienvre is an energy and natural resources executive and entrepreneur with over 15 years of experience in the oil and
gas, mining, shipping and offshore facilities sectors initially with banks including sell-side equity research and reserve-based
lending. More recently his experience has included positions with private and public E&P companies, ship owners and
offshore facilities owners, mining companies and a mid-size trading group managing investments in companies active in
the oil and gas sector. Mr Etienvre has extensive commercial, business development, risk assessment, management and
project management experience and expertise including deal sourcing, transaction structuring, commercial negotiations
and financing including debt, equity, off-take finance, vendor finance and reverse take-overs with TSX-V and LSE listed
companies.
Other directorships of listed companies in the last three years: Nil.
- 22 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Previous Director - Philip Haydn-Slater (resigned 7 April 2020)
Non Executive Director (Appointed 21 July 2017, Resigned 7 April 2020)
Mr Haydn-Slater was co-founder and director of HD Capital for over 5 years and has worked throughout his 36-year career
within institutional sales for a number of well-known financial institutions. Prior to HD Capital, Philip spent eight years as
Head of Corporate Broking at WH Ireland Ltd in their London office. There he was responsible for originating and managing
the sales process for a significant number of transactions, including flotations and secondary placings for corporate clients
on AIM and other international exchanges. Philip’s expertise was mainly focused on deals pertaining to the extractive
industries and he continues to maintain a focus on oil and gas and mining. During his career, Philip has worked in both
London and Sydney for financial organisations that include ABN Amro, Bankers Trust, James Capel & Co and Bain Securities
(Deutsche Bank) Sydney.
Previous Director - Robert Brown (resigned 7 January 2020)
M.Eng (Chem.) C.Eng MIChemE GAICD
Non-Executive Director (Appointed 17 October 2016, Resigned 7 January 2020)
Mr Brown is Perth based and has 25 years of petroleum industry experience in technical, managerial and leadership
positions. He is a Master in Engineering graduate of Leeds University in Chemical Engineering. Rob has worked in the
North Sea, South America, India, North America, SE Asia, West Africa and Australia. He has been responsible for highly
successful operations, projects and developments and has proven experience of delivering against challenging capital,
schedule and operating metrics with Amoco, Schlumberger, Lasmo, Cairn and Tullow. Rob is an adjunct lecturer in process
design and safety, a WA SPE Board Member and a regulatory specialist.
COMPANY SECRETARIES
Peter Ironside B.Com, CA
Appointed 8 March 1995
Mr Ironside has a Bachelor of Commerce Degree and is a Chartered Accountant and business consultant with over 40
years’ experience in the exploration and mining industry. Mr Ironside has a significant level of accounting, financial
compliance and corporate governance experience including corporate initiatives and capital raisings. Mr Ironside has been
a Director and/or Company Secretary of several ASX listed companies including Integra Mining Limited and Extract
Resources Limited (before $2.18bn takeover) and is currently a non-executive director of Zamanco Minerals Limited and
Stavely Minerals Limited.
Amanda Sparks B.Bus, CA, F.Fin
Appointed 6 October 2015
Ms Amanda Sparks is a Chartered Accountant with over 30 years of resources related financial experience, with explorers
and producers. Ms Sparks has extensive experience in company secretarial, financial management, capital raisings,
corporate transactions, corporate governance and compliance for listed companies and is currently a non-executive
director of Stavely Minerals Limited.
MEETINGS OF DIRECTORS
During the year, 3 meetings of directors were held. The number of meetings attended by each director during the year is
as follows:
Name of Director
I Tchacos
P Fink
A Childs
E Etienvre
P Haydn-Slater
R Brown
Meeting
Held
3
3
3
2
1
1
Meetings
Attended
3
3
2
2
-
-
In addition, ADX had 17 circular resolutions signed by all directors during the year.
- 23 -
ADX ENERGY LTD
DIRECTORS’ REPORT
DIRECTORS’ INTERESTS IN SHARES AND OPTIONS
The following table sets out each director’s relevant interest in shares and options in shares of the Company as at the date
of this report.
Shares
Ordinary fully paid shares
Options
Unlisted Options, Ex Price $0.013, Expiry 26/6/2021
Unlisted Options, Ex Price $0.008, Expiry 15/6/2021
Unlisted Options, Ex Price $Nil, Expiry 31/5/2022
Unlisted Options, Ex Price $Nil, Expiry 31/5/2023
Unlisted Options, Ex Price $Nil, Expiry 31/10/2023
Unlisted Options, Ex Price $Nil, Expiry 31/1/2024
Unlisted Options, Ex Price $Nil, Expiry 26/6/2024
Unlisted Options, Ex Price $Nil, Expiry 31/7/2024
Unlisted Options, Ex Price $Nil, Expiry 31/10/2024
Unlisted Options, Ex Price $Nil, Expiry 31/1/2025
Total Options
I Tchacos
P Fink
A Childs
E Etienvre
62,303,958
73,010,542
25,388,524
1,976,956
-
1,000,000
6,354,086
10,864,955
3,954,545
4,106,250
6,000,000
6,078,125
5,116,071
7,250,000
50,724,032
-
1,000,000
-
-
-
-
6,578,571
3,373,438
3,354,910
2,632,811
16,939,730
-
-
-
-
-
-
-
-
-
-
-
5,000,000
-
-
-
-
-
-
-
-
-
5,000,000
CORPORATE INFORMATION
Corporate Structure
ADX Energy Ltd is a limited liability company that is incorporated and domiciled in Australia. ADX Energy Ltd has prepared
a consolidated financial report incorporating the entities that it controlled during the year as follows:
ADX Energy Ltd
AuDAX Energy Srl
Bull Petroleum Pty Ltd
Terra Energy Limited
ADX VIE GmbH
Danube Petroleum Limited
ADX Energy Panonia Srl
Alpine Oil & Gas Pty Ltd
-
-
-
-
-
-
-
-
parent entity
100% owned Italian controlled entity
100% owned Australian controlled entity (dormant)
100% owned UK controlled entity
Terra Energy Limited owns 100% of this Austrian controlled entity
49.18% owned UK controlled entity
Danube Petroleum Limited owns 100% of this Romanian controlled entity
100% owned Australian controlled entity (wound-up in December 2020)
Principal Activity
The principal activities of the Group during the year were oil and gas production, appraisal and exploration.
Operations review
Refer to the Operations Review preceding this report.
- 24 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Summary of Financial Position, Asset Transactions and Corporate Activities
A summary of key financial indicators for the Group, with prior year comparison, is set out in the following table:
Cash and cash equivalents held at year end
Net profit/(loss) for the year after tax
Non-controlling interest in loss for the year
Included in loss for the year:
Operating revenue
Cost of sales – operating costs
Cost of sales – depreciation/amortisation
Exploration expensed
Basic profit/(loss) per share from continuing operations
Net cash (used in) operating activities
Net cash (used in) investing activities
Net cash from financing activities
During the year:
Consolidated
Consolidated
31 December 2020 31 December 2019
$
2,144,469
(4,486,676)
(206,611)
6,833,016
(5,035,455)
(3,004,005)
(1,231,427)
(0.25) cents
(1,451,154)
(3,777,049)
2,302,214)
$
4,953,759
(1,086,908)
(107,208)
1,114,613
(649,340)
(229,714)
(328,630)
(0.077) cents
(3,326,352)
(8,240,477)
13,092,221
- Exploration expenditure was $1,231,427. This was expenditure primarily for new ventures ($1,097,916), Tunisia
$68,692, Italy $7,140 and Romania $57,679.
- Production from ADX’s Zistersdorf and Gaiselberg Fields in Austria was as follows:
Crude Oil Sold (Barrels)
Gas Sold (Boe)
Total Oil Equivalent (Boe)
Average Production Rate (Boepd)
31 December
2020
92,487
31 December
2019
8,555
11,717
104,204
285
935
9,490
316
Convertible Loan Facilities
On 14 January 2020, $1,050,000 of ADX’s convertible loan facilities were converted to 149,999,995 shares (at
$0.007/share). The remaining loan facility of $50,000 was repaid in cash.
Borrowings
During the year, ADX secured EUR 1.13 million funding for its wholly owned Austrian subsidiary ADX VIE GmbH via a
program of Austrian state financing from Austria Wirtschafts (“Economy”) Service (AWS) and Volksbank Wien AG
(Volksbank) which is ADX local commercial bank. The loan guarantee is provided by the Austrian state.
The facility consists of two parts:
EUR 500,000, zero interest, repayment starts 30 June 2022 and ends latest 31 December 2024. ADX VIE has
drawn these funds in August 2020; and
EUR 630,000, 1% interest, same repayment terms as above. ADX VIE has drawn EUR 330,000 of these funds
during the year.
- 25 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Collateral of EUR 120,000 is held in an ADX account with Volksbank.
The use of funds is very flexible including all ADX VIE operating costs, capital costs and servicing of existing debts.
The additional source of funding enables ADX to continue to build its Austrian business activities during a challenging
period. Key investment initiatives being pursued by ADX in Austria that this funding has assisted or will assist are as follows;
Ongoing production and reliability enhancements at the Company’s Zistersdorf and Gaiselberg producing fields
(Z&G);
Geotechnical work to enhance the current field reserves position at Z&G as well as the maturing for drilling of the
large but underdeveloped resource potential (Mesozoic deep water Flysch reservoirs) that can be accessed from
the existing Z&G production footprint;
Securing a highly prospective appraisal and exploration acreage position surrounding RAG’s producing oil and gas
fields in Upper Austria; and
Pursuing further production acquisitions in Austria where ADX can enhance its production position within or in
very close proximity to its exploration and appraisal acreage.
The AWS funding program has been initiated as a result of the COVID-19 pandemic in conjunction with commercial banks
to help companies with robust business models to exit the crisis in a strong position for the ongoing growth of their
business. In order to secure Austrian state guaranteed AWS funding it was necessary for ADX to demonstrate the ongoing
viability of its business because AWS funding is not available for struggling companies or companies without a business
model likely to succeed in the future.
Other Loans
On 23 November 2020, ADX announced an amendment to the repayment terms of the Company’s A$ 3.5 million loan
notes (“Loan Notes”). The repayment of the A$ 3.5 million principal will now be repaid in two tranches – Tranche 1 of A$
1.75 million to be repaid semi-annually with 4 equal payments over a period of 2 years commencing from 26 May 2021
and ending on 26 November 2022; and Tranche 2 of A$ 1.75 million repayable as a bullet payment at the end of 2 years
on 26 November 2022.
The variation to the terms of the Loan Notes was necessary as a result of the COVID-19 pandemic which caused a significant
deterioration in oil prices. The Company will cancel existing options previously issued in relation to the Loan Notes (having
been granted a waiver of ASX Listing Rule 6.23.3) and, subject to shareholder approval, grant to the Loan Note holders 2
equal tranches of 67,500,000 options each, one tranche with an exercise price of A$ 0.01 maturing on 26 May 2022 and
the other tranche with an exercise price A$ 0.015 maturing on 26 November 2023 respectively. The changes to the terms
of the options were approved by Shareholders at the Company’s general meeting held on Friday 19 February 2021.
Placement and Share Purchase Plan
On 15 December 2020, ADX announced that it had successfully completed a placement to sophisticated investors to raise
A$ 1.3 million at A$ 0.006 per share. One unlisted Placement Option was issued for every two Placement Shares at a strike
price of A$ 0.008 per share with an expiry date of 15 June 2021.
At the same time, ADX announced a share purchase plan (“SPP”) allowing shareholders to invest on same terms as
Placement. The share purchase plan closed on 29 January 2021, oversubscribed, with subscriptions totalling $3 million
being accepted. One free attaching unlisted option was granted for every two (2) shares issued under the SPP (“SPP
Options”). The exercise price of the SPP Options is A$ 0.008 with an expiry date of 15 June 2021.
Funds raised by the Placement and the SPP will be used to supplement ADX’s cash requirements for the Company’s key
projects as well as growth opportunities in Austria and for working capital purposes. The Austrian growth opportunities
include the payment of a bank guarantee to the Austrian Mining Authority for the recently announced Molasse basin
exploration and appraisal licenses in Upper Austria as well as well work overs on its producing Gaiselberg and Zistersdorf
fields in the Vienna basin.
- 26 -
ADX ENERGY LTD
DIRECTORS’ REPORT
DIVIDENDS
No dividends were paid or declared during the year. The Directors do not recommend payment of a dividend.
ENVIRONMENTAL ISSUES
The Company’s environmental obligations are regulated by the laws of the countries in which ADX has operations. The
Company has a policy to either meet or where possible, exceed its environmental obligations. No environmental breaches
have been notified by any governmental agency as at the date of this report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Company during the year are detailed in the Operations Report and Financial
Summary in this report.
FUTURE DEVELOPMENTS
The Company intends to continue its production operations in Austria and continue its’ exploration and development
programme on its existing permits, and to acquire further suitable permits for exploration and development. Additional
comments on likely developments are included in the Operations Report.
SHARES UNDER OPTION
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Total Options
Number
345,495,007
5,000,000
67,500,020
67,500,020
6,354,086
10,864,955
3,954,545
4,106,250
12,578,571
9,451,563
8,470,981
9,882,811
551,158,809
Exercise Price
0.8 cents
1.3 cents
1.0 cents
1.5 cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Expiry Date
15/06/2021
26/06/2021
26/05/2022
26/11/2023
31/05/2022
31/05/2023
31/10/2023
31/01/2024
26/06/2024
31/07/2024
31/10/2024
31/01/2025
No optionholder has any right under the options to participate in any other share issue of the Company or any other related
entity. No share options were exercised by employees or Key Management Personnel during the year.
INDEMNIFICATION AND INSURANCE OF OFFICERS
The Company has paid a premium to insure the Directors and Officers of the Company and its controlled entities. Details of
the premium are subject to a confidentiality clause under the contract of insurance.
The liabilities insured are costs and expenses that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of entities in the group.
- 27 -
ADX ENERGY LTD
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The Directors present the 2020 Remuneration Report, outlining key aspects of ADX’s remuneration policy and framework,
together with remuneration awarded this year.
The report is structured as follows:
A. Key management personnel (KMP) covered in this report
B. Remuneration policy, link to performance and elements of remuneration
C. Contractual arrangements of KMP remuneration
D. Remuneration awarded
E. Equity holdings and movement during the year
F. Other transactions with key management personnel
G. Use of remuneration consultants
H. Voting of shareholders at last year’s annual general meeting
A. KEY MANAGEMENT PERSONNEL COVERED IN THIS REPORT
For the purposes of this report key management personnel of the Group are defined as those persons having authority
and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including
any Director (whether Executive or otherwise).
Key Management Personnel during the Year
Directors
Ian Tchacos
Paul Fink
Andrew Childs
Edouard Etienvre
Philip Haydn-Slater
Robert Brown
-
-
-
-
-
-
Executive Chairman
Executive Director
Non-Executive Director
Non-Executive Director (appointed 7 January 2020)
Non-Executive Director (resigned 7 April 2020)
Non-Executive Director (resigned 7 January 2020)
B. REMUNERATION POLICY, LINK TO PERFORMANCE AND ELEMENTS OF REMUNERATION
The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with achievement of strategic objectives and
the creation of value for shareholders.
The Board ensures that executive reward satisfies the following key criteria for good reward corporate governance
practices:
Competitiveness and reasonableness;
Acceptability to shareholders;
Transparency; and
Capital management.
Remuneration Philosophy
The performance of the Company depends upon the quality of its Directors and Executives. To prosper, the Company must
attract, motivate and retain highly skilled Directors and Executives.
To this end, the Company embodies the following principles in its remuneration framework:
provide competitive rewards to attract high calibre Executives; and
if required, establish appropriate, demanding performance hurdles in relation to variable Executive remuneration.
The Group has structured an executive framework that is market competitive and complementary to the reward strategy
for the organisation.
- 28 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Both Executive and Non-Executive Directors may elect, subject to Shareholder approval, to reduce their cash director fees
and consulting fees in lieu of Shares in accordance with the Company’s Directors’ Share Plan (Salary Sacrifice). The Shares
are issued on a quarterly basis according to the Directors’ fees owing to each of the Directors at that time, at an issue price
of no less than the volume weighted average sale price of Shares sold on ASX during the 90 days prior to the expiration of
the corresponding calendar quarter in which the Directors’ fees were incurred. The Executive Directors may also elect,
subject to Shareholder approval, to reduce their cash consulting fees in lieu of Options in accordance with the Company’s
Performance Rights and Option Plan. The Options are issued on a quarterly basis according to the consulting fees owing to
each of the Directors at that time, using a deemed price of no less than the volume weighted average sale price of Shares
sold on ASX during the 90 days prior to the expiration of the corresponding calendar quarter in which the consulting fees
were incurred.
Remuneration Committee
Due to the limited size of the Company and of its operations and financial affairs, the use of a separate remuneration
committee is not considered efficient for ADX. The Board has taken a view that the full Board will hold special meetings or
sessions as required. The Board are confident that this process for determining remuneration is stringent and full details
of remuneration policies and payments are provided to shareholders in the annual report and on the web. The Board has
adopted the following policies for Directors’ and executives’ remuneration.
Non-Executive directors’ remuneration
Non-executive Directors’ fees are paid within an aggregate limit which is approved by the shareholders from time to time.
Retirement payments, if any, are agreed to be determined in accordance with the rules set out in the Corporations Act as
at the time of the Director’s retirement or termination. Non-executive Directors’ remuneration may include an incentive
portion consisting of options or similar instruments, as considered appropriate by the Board, which may be subject to
shareholder approval in accordance with ASX listing rules.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned
amongst Directors is reviewed annually. The Board considers the amount of Director fees being paid by comparable
companies with similar responsibilities and the experience of the Non-executive Directors when undertaking the annual
review process. Fees for Non-Executive directors are not linked to the performance of the Group.
Executive Director Remuneration
In determining the level and make-up of Executive remuneration, the Board negotiates a remuneration to reflect the
market salary for a position and individual of comparable responsibility and experience. Remuneration is compared with
the external market by reviewing industry salary surveys and during recruitment activities generally. If required, the Board
may engage an external consultant to provide independent advice in the form of a written report detailing market levels
of remuneration for comparable Executive roles.
Remuneration consists of a fixed remuneration and may include a long term incentive portion as considered appropriate.
Executives remuneration is currently a fixed consulting fee based on a daily rate for actual days worked.
Long term incentives granted to Executives are delivered in the form of options. The option incentives granted are aimed
to motivate Executives to pursue the long term growth and success of the Company within an appropriate control
framework and demonstrate a clear relationship between key Executive performance and remuneration. Director options
are granted at the discretion of the Board and approved by shareholders. Performance hurdles are not attached to vesting
periods; however the Board may determine appropriate vesting periods to provide rewards over a period of time to key
management personnel. During the year there were no performance related payments made.
C. CONTRACTUAL ARRANGEMENTS OF KMP REMUNERATION
On appointment to the board, all Non-Executive directors enter into a service agreement with the Company in the form of
a letter of appointment. The letter summarises the board policies and terms, including compensation, relevant to the office
of director. Non-Executive Directors are paid a fee of $33,000 pa, inclusive of any superannuation if applicable. In
accordance with the Company’s Directors’ Share Plan (Salary Sacrifice), part may be paid in cash, and part in shares.
- 29 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Remuneration and other terms of employment for the executive directors and the other key management personnel are
also formalised in consultancy agreements. The major provisions of the agreements relating to remuneration are set out
below.
Name
I Tchacos – Executive Chairman
– Technical Consultancy
I Tchacos – Executive Chairman
– Corporate Consultancy
Term of
agreement
Term of 2 years
commencing 1
July 2020
Ongoing
P Fink – Executive Director –
Consultancy with ADX Energy
Ltd
Term of 2 years
commencing 1
July 2020
P Fink – Executive Director –
Consultancy with ADX VIE
GmbH
E Etienvre – Non-Executive
Director – Consultancy with
ADX Energy Ltd
No written
agreement
Base annual remuneration inclusive of
superannuation at 31/12/20
Technical consulting - $1,500 per day (cash)
Corporate consulting - $500/month (cash)
plus options subject to Board and Shareholder
approval for additional work at a value of
$1,500 per day
In addition, I Tchacos receives Directors fees
of $25,000 pa. 80% paid in cash, 20% paid in
equity (subject to Shareholder approval)
Retainer of $500 per month (cash) plus
consulting at $1,500 per day
(50% cash and 50% equity (options), subject to
shareholder approval)
Termination
benefit
2 months (up
to $18,000)
2 months (up
to $18,000)
2 months (up
to $18,000)
In addition, P Fink receives Directors fees of
$25,000 pa. 80% paid in cash, 20% paid in
equity (subject to Shareholder approval)
Consulting at EUR 900 per day.
None
Term of 2 years
commencing 1
July 2020
Consulting at $1,500 per day
(50% cash and 50% equity (shares), subject to
shareholder approval)
1 month (up
to $7,500)
In addition, E Etienvre receives non-executive
Directors fees of $33,000 pa. 61% paid in cash,
39% paid in equity (subject to Shareholder
approval). E Etienvre also receives Director
fees from 49% owned subsidiary, Danube
Petroleum Ltd of GBP 12,000 per annum.
- 30 -
ADX ENERGY LTD
DIRECTORS’ REPORT
D. REMUNERATION OF KEY MANAGEMENT PERSONNEL
Details of the remuneration of each Director and named executive officer of the Company, including their personally-related
entities, during the year was as follows:
Post Employment
Share Based
Share Based
Share Based
2020
Directors
I Tchacos
P Fink
A Childs
E Etienvre(2)
R Brown(2)
P Haydn-Slater(2)
TOTAL 2020
Cash salary,
directors fees
and consulting
fees, including
accruals*
$
255,301
297,417
30,137
82,082
330
16,948
682,215
Superannuation
$
Shares (in lieu of
cash fees) (1)
$
Options (in lieu of
cash consulting fees)
(1)
$
Options
(sign-on) (3)
$
Total
$
2,665
-
2,863
-
55
-
5,583
3,750
3,750
-
9,505
250
-
17,255
114,281
89,775
-
-
-
-
204,056
-
-
-
14,688
-
-
14,688
375,997
390,942
33,000
106,275
635
16,948
923,797
(1) Share based payments. These represent the amount expensed in the year for shares issued under the Directors Share Plan (Salary
Sacrifice) and Options in lieu of cash consulting fees.
(2) Edouard Etienvre was appointed 7 January 2020. Robert Brown resigned 7 January 2020, and Philip Haydn-Slater resigned 7 April
2020.
(3) Other Options. These represent the amount expensed for options granted and vested in the year.
* Includes accruals of fees paid subsequent to year end via equity.
2019
Directors
I Tchacos
P Fink
A Childs
R Brown
P Haydn-Slater
TOTAL 2019
Cash salary,
directors fees
and consulting
fees, including
accruals*
$
248,846
246,625
21,350
21,350
30,396
568,567
Post Employment
Share Based
Share Based
Superannuation
$
Shares (in lieu of
cash fees) (1)
$
Options (in lieu of
cash consulting fees)
(1)
$
Total
$
2,470
-
1,900
1,900
-
6,270
3,750
3,750
9,750
9,750
24,750
51,750
126,001
125,625
-
-
-
251,626
381,067
376,000
33,000
33,000
55,146
878,213
There were no performance related payments made during the year. Performance hurdles are not attached to
remuneration options; however the Board determines appropriate vesting periods to provide rewards over a period of
time to key management personnel.
Share-based Compensation
Shares:
The Company’s Directors’ Share Plan (Salary Sacrifice), allows for shares to be issued on a quarterly basis according to the
Directors’ fees owing to each of the Directors at that time, at an issue price of no less than the volume weighted average
sale price of Shares sold on ASX during the 90 days prior to the expiration of the corresponding calendar quarter in which
the Directors’ fees were incurred. The shares are issued after Shareholder approval.
- 31 -
ADX ENERGY LTD
DIRECTORS’ REPORT
The following shares were granted as equity compensation benefits (in lieu of cash remuneration) to Directors during the
year.
In lieu of part remuneration for
the quarter ended
31/12/2019
31/3/2020
30/6/2020
30/9/2020
31/12/2020
Date Issued
13/01/2020
26/06/2020
5/11/2020
5/11/2020
Issued Subsequent to Year End
5/02/2021
Summarised as:
Director
Ian Tchacos
Paul Fink
Andrew Childs
Edouard Etienvre
Robert Brown
Philip Haydn-Slater
Issued during the year
Options:
Number of Shares
1,760,714
786,481
958,332
821,427
4,326,954
958,332
2020
Number of Shares
690,475
690,475
325,000
1,435,290
360,714
825,000
4,326,954
Value based on
90 Day VWAP $
17,500
5,505
5,750
5,750
34,505
5,750
2020
$
5,000
5,000
3,250
9,505
3,500
8,250
34,505
The Executive Directors may also elect, subject to Shareholder approval, to reduce their cash consulting fees in lieu of
Options in accordance with the Company’s Performance Rights and Option Plan. The Options are issued on a quarterly
basis according to the consulting fees owing to each of the Directors at that time, using a deemed price of no less than the
volume weighted average sale price of Shares sold on ASX during the 90 days prior to the expiration of the corresponding
calendar quarter in which the consulting fees were incurred.
The following options were granted as equity compensation benefits (in lieu of cash remuneration) to Directors during the
year.
Date Issued
13/01/2020
26/06/2020
5/11/2020
5/11/2020
Number of Options
8,793,750
12,578,571
9,451,563
8,470,981
39,294,865
Value based on
90 Day VWAP $
87,938
88,050
56,709
59,297
291,994
In lieu of part remuneration for
the quarter ended
31/12/2019
31/3/2020
30/6/2020
30/9/2020
Issued Subsequent to Year End
5/02/2021
9,882,811
59,297
31/12/2020
Summarised as:
Director
Ian Tchacos
Paul Fink
2020
Number of Options
21,300,446
17,994,419
39,294,865
2020
$
155,344
136,650
291,994
No other options were granted as equity compensation benefits to Directors and other Key Management Personnel.
- 32 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Shares issued to Key Management Personnel on exercise of compensation options
During the year to 31 December 2020, 32,405,165 compensation options exercised by Directors or other Key Management
Personnel (2019: nil). A summary of options exercised by Directors is as follows:
Ian Tchacos
Unlisted Options
Paul Fink
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Total exercised
Number
Exercise Price
Expiry Date
6,616,071
Nil cents
31/7/2023
3,415,961
7,208,036
6,182,143
4,295,454
4,687,500
32,405,165
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
31/5/2022
31/5/2023
31/7/2023
31/10/2023
31/01/2024
E. EQUITY HOLDINGS AND MOVEMENTS DURING THE YEAR
(a) Shareholdings of Key Management Personnel
Year ended
31 Dec 2020
I Tchacos
P Fink
A Childs
E Etienvre
R Brown
P Haydn-Slater
Balance at
beginning of
the year
Options
exercised
Granted as
remuneration
Conversion of
Notes
On-market
Trades
(purchases)
On-market
Trades
(sales)
Resignation of
Director
44,646,223
6,616,071
34,342,470
25,789,094
25,375,630
-
7,289,551
15,038,930
-
-
-
-
690,475
690,475
325,000
1,435,290
-
825,000
7,142,856
1,000,000
7,142,857
2,837,313
-
-
-
-
-
-
448,394
(760,500)
-
-
-
-
-
-
-
-
-
-
(7,289,551)
(15,863,930)
Balance at
end of the
year
60,095,625
70,802,209
25,388,524
1,435,290
-
-
126,692,804
32,405,165
3,966,240
14,285,713
4,285,707
(760,500)
(23,153,481)
157,721,648
(b) Option holdings of Key Management Personnel
Year ended
31 Dec 2020
Balance at
beginning of
the year
Granted as
remuneration
Granted upon
appointment
Options
exercised
Options
expired
I Tchacos
P Fink
A Childs
E Etienvre
R Brown
P Haydn-Slater
27,789,657
21,300,446
21,101,594
17,994,419
-
-
-
-
-
-
-
-
-
-
-
5,000,000
-
-
(6,616,071)
(25,789,094)
-
-
-
-
48,891,250
39,294,865
5,000,000
(32,405,165)
Balance at
end of the
year
42,474,032
13,306,919
-
5,000,000
-
-
60,780,951
-
-
-
-
-
-
-
Not
exercisable
-
-
-
-
-
-
-
Exercisable
42,474,032
13,306,919
-
5,000,000
-
-
60,780,951
F. OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
On 16 July 2019, ADX finalised Convertible Loan Facility Agreements (‘Convertible Notes’) which were convertible to shares
in ADX to raise A$1,205,000. Included in this new funding was $150,000 provided equally by ADX’s Directors Ian Tchacos,
Paul Fink and previous director, Robert Brown. On 13 January 2020, the Directors’ convertible loan facilities were
converted at $0.007 to 21,428,570 shares.
- 33 -
ADX ENERGY LTD
DIRECTORS’ REPORT
G. USE OF REMUNERATION CONSULTANTS
No remuneration consultants were engaged by ADX during the year.
H. VOTING OF SHAREHOLDERS AT LAST YEAR’S ANNUAL GENERAL MEETING
The Company received more than 98.7% of “yes” votes on its Remuneration Report for the 2019 year. The Company did
not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
END OF THE AUDITED REMUNERATION REPORT
SUBSEQUENT EVENTS
Concession Agreements
On 11 January 2021, ADX announced that it had executed concession agreements with the Federal Ministry responsible
for Mining (“BMLRT”) on behalf of the Republic of Austria which ratified the exploration, production and gas storage
concession agreements (“AGS”) negotiated earlier in the year with the responsible BMLRT for Upper Austria. The total
term for the Upper Austria AGS is 16 years without any relinquishment and the first 4 year firm period commencing 1st
January 2021. ADX has entered a 2 well drilling commitment, however the minimum financial obligation to keep the
licenses in good standing is EUR 2.2 million for the first period.
Hydrogen Storage
On 20 January 2021, ADX announced that it had entered an agreement with Horváth & Partners (Horváth) to undertake a
pre-feasibility assessment for hydrogen (H2) storage at ADX’s Gaiselberg and Zistersdorf fields in the Vienna Basin as well as
the creation of a profitable hydrogen business model which will be complimentary and synergistic with ADX’s current oil and
gas energy business (Hydrogen Study). The Hydrogen Study is expected to be undertaken in two phases. The first is to
establish the feasibility of the Fields for hydrogen storage and or green gas production, establish a joint venture partnership
with renewable energy producers proximal to the fields and determine the availability of feasibility project funding. The
second phase will be to establish a detailed business and finance plan for a future project.
Share Purchase Plan Closed Over Subscribed
On 3 February 2021, ADX announced its Share Purchase Plan (SPP), which closed on Friday, 29 January 2021, was significantly
oversubscribed, with the Company receiving applications totalling approximately A$3.6 million, well in excess of the targeted
amount of A$1 million. The Company scaled-back applications to a total of $3 million. Under the SPP, each Eligible
Shareholder was entitled to subscribe for up to A$30,000 of new fully paid ordinary shares in the Company at the issue price
of A$0.006 per share, subject to scale back. The SPP formed part of the capital raising as announced on 15 December 2020,
which also comprised a Placement to institutional and sophisticated investors raising A$1.3 million at A$0.006 per share.
In addition, one (1) free attaching unlisted option was issued for every two (2) shares issued under the SPP (“SPP Options”).
The exercise price of the SPP Options is A$0.008 with an expiry date of 15 June 2021.
Loan Note Options
On 19 February 2021, 135,000,005 unlisted options with an exercise price of $0.018, expiring 26/11/2021 were cancelled.
The Company was granted a waiver of ASX Listing Rule 6.23.3 to permit the Company to cancel the existing 135,000,005
options issued to Loan Note Holders (as approved by Shareholders on 6 December 2019) and issue 135,000,040 new,
replacement options (as approved by Shareholders on 19 February 2021).
- 34 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Exercise of Unlisted Options
The following unlisted options have been exercised at $0.008/share since year end:
On 25 February 2021, 21,653,334 unlisted options (raising $173,227); and
On 22 March 2021, 7,210,470 unlisted options (raising $57,684).
-
-
COVID-19
The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the potential future
impact after the reporting date. The situation is rapidly developing and is dependent on measures imposed by the
governments, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic
stimulus that may be provided.
There are no other matters or circumstances that have arisen since 31 December 2020 that have or may significantly affect
the operations, results, or state of affairs of the Group in future years.
CORPORATE GOVERNANCE
The Directors of the Company support and adhere to the principles of corporate governance, recognising the need for the
highest standard of corporate behaviour and accountability. Please refer to the Company’s website for details of corporate
governance policies:
http://adx-energy.com/en/investors/corporate-governance.php
AUDIT INDEPENDENCE AND NON-AUDIT SERVICES
Auditor’s independence - section 307C
The Auditor’s Independence Declaration is included on page 36 of this report.
Non-Audit Services
There were no non-audit services provided during the year.
Signed in accordance with a resolution of the Directors.
Ian Tchacos
Executive Chairman
Dated this 31st day of March 2021
- 35 -
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001
As lead auditor of the review of ADX Energy Ltd for the year ended 31 December 2020,
I declare that, to the best of my knowledge and belief, there have been:
• no contraventions of the auditor independence requirements of the Corporations
Act 2001 in relation to the audit; and
• no contraventions of any applicable code of professional conduct in relation to the
audit.
This declaration is in respect of ADX Energy Ltd and the entities it controlled during the
year.
Rothsay Auditing
Daniel Dalla
Director
31 March 2021
Liability limited by a scheme approved under Professional Standards Legislation
ADX ENERGY LTD
DIRECTORS’ DECLARATION
1.
In the opinion of the directors:
a)
The financial statements and notes are in accordance with the Corporations Act 2001, including:
i)
ii)
giving a true and fair view of the Group’s financial position as at 31 December 2020 and of its performance
for the year then ended; and
complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001; and
iii) complying with International Financial Reporting Standards (IFRS) as stated in note 1 of the financial
statements; and
b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
2.
This declaration has been made after receiving the declarations required to be made to the directors in accordance
with Section 295A of the Corporations Act 2001 for the year ended 31 December 2020.
This declaration is signed in accordance with a resolution of the Board of Directors.
Ian Tchacos
Executive Chairman
Dated this 31st day of March 2021
- 37 -
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
ADX ENERGY LTD
Operating revenue
Cost of sales
Gross profit
Other income
Other Expenses:
Administration, staff and corporate expenses,
net of recoveries from exploration projects
Exploration expensed
Finance costs
Loss on windup of subsidiary
Reversal of provision for abandonment
Loss on disposal of plant and equipment
Consolidated
Year ended
31 Dec 2020
$
6,833,016
(8,039,460)
(1,206,444)
454
Year ended
31 Dec 2019
$
1,114,613
(879,054)
235,559
17,209
(2,902,152)
(796,005)
(1,231,427)
(286,051)
(51,885)
258,184
(26,602)
(328,630)
(167,089)
-
-
-
Note
2
2
2
2
13
Profit/(loss) before income tax
(5,445,923)
(1,038,956)
Income tax benefit/(expense)
Profit/(loss) after income tax
Profit/(loss) is attributable to:
Owners of ADX Energy Ltd
Non-Controlling Interest
4
959,247
(47,952)
(4,486,676)
(1,086,908)
(4,280,065)
(206,611)
(979,700)
(107,208)
16
(4,486,676)
(1,086,908)
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Hedge accounting
Income tax relating to items of other comprehensive income/(loss)
139,113
(250,470)
-
(701,030)
-
-
Other comprehensive income/(loss) for the year, net of tax
(111,357)
(701,030)
Total comprehensive profit/(loss) for the year
(4,598,033)
(1,787,938)
Total comprehensive loss is attributable to:
Owners of ADX Energy Ltd
Non-Controlling Interest
(4,375,599)
(222,434)
(1,540,778)
(247,160)
(4,598,033)
(1,787,938)
Earnings per share for loss attributable to the ordinary equity
holders of the Company:
Basic earnings/(loss) per share
5
Cents Per
Share
(0.25)
Cents Per
Share
(0.077)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
- 38 -
ADX ENERGY LTD
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
ASSETS
Current Assets
Cash and cash equivalents
Other receivables
Inventories
Total Current Assets
Non-Current Assets
Other receivables
Oil and gas properties
Right of Use Assets
Deferred tax assets
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Current tax liabilities
Borrowings
Lease liabilities – right of use assets
Provisions
Total Current Liabilities
Non-Current Liabilities
Deferred tax liabilities
Borrowings
Lease liabilities – right of use assets
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Consolidated
31 December
2020
$
31 December
2019
$
Note
6
7
8
7
9
10
4
11
12
10
13
4
12
10
13
2,144,469
1,619,229
999,446
4,763,144
190,914
23,952,807
484,880
1,404,728
26,033,329
4,953,759
3,452,921
315,164
8,721,844
37,516
23,006,244
-
337,074
23,380,834
30,796,473
32,102,678
1,948,686
-
902,654
121,870
294,585
3,267,795
556,141
3,945,489
364,524
13,969,628
18,835,782
2,182,032
64,339
2,850,000
-
457,728
5,554,099
468,449
1,750,000
-
13,810,164
16,028,613
22,103,577
21,582,712
8,692,896
10,519,966
Equity
Issued capital
Reserves
Accumulated losses
Capital and reserves attributable to owners of ADX Energy Ltd
Non-controlling interests
Total Equity
14
15
16
74,334,593
6,419,852
(80,898,819)
(144,374)
8,837,270
71,889,435
6,189,581
(76,618,754)
1,460,262
9,059,704
8,692,896
10,519,966
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
- 39 -
ADX ENERGY LTD
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Issued
Capital
$
Reserves
$
Accumulated
Losses
$
Non-
controlling
Interest
Total
Equity
$
At 1 January 2019
69,070,587 6,404,365
(75,639,054)
3,419,316
3,255,214
Loss for the year
Other comprehensive income/(loss)
Total comprehensive loss for the year, net of tax
-
-
-
-
(979,700)
(107,208)
(1,086,908)
(561,078)
-
(139,952)
(701,030)
(561,078)
(979,700)
(247,160)
(1,787,938)
Transactions with owners in their capacity as
owners:
Issue of share capital
Cost of issue of share capital
Share based payments
3,116,194
(297,346)
-
-
-
346,294
2,818,848
346,294
-
-
-
-
5,887,548
9,003,742
-
-
(297,346)
346,294
5,887,548
9,052,690
As at 31 December 2019
71,889,435 6,189,581
(76,618,754)
9,059,704
10,519,966
At 1 January 2020
71,889,435 6,189,581
(76,618,754)
9,059,704
10,519,966
Loss for the year
Other comprehensive income/(loss)
Total comprehensive loss for the year, net of tax
-
-
-
-
(4,280,065)
(206,611)
(4,486,676)
(95,534)
-
(15,823)
(111,357)
(95,534)
(4,280,065)
(222,434)
(4,598,033)
Transactions with owners in their capacity as
owners:
Issue of share capital
Cost of issue of share capital
Share based payments
2,570,927
(125,769)
-
-
-
325,805
2,445,158
325,805
-
-
-
-
-
-
-
-
2,570,927
(125,769)
325,805
2,770,963
As at 31 December 2020
74,334,593 6,419,852
(80,898,819)
8,837,270
8,692,896
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
- 40 -
ADX ENERGY LTD
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
Cash flows from operating activities
Receipts in the ordinary course of activities
Payments to suppliers and employees, including for
exploration expensed
Government subsidies
Interest received
Interest paid
Income tax paid
Consolidated
Year ended
31 Dec 2020
$
Year ended
31 Dec 2019
$
Note
7,657,058
79,031
(9,035,377)
(3,406,490)
195,050
454
(268,339)
-
-
1,309
-
(202)
Net cash flows used in operating activities
6(i)
(1,451,154)
(3,326,352)
Cash flows from investing activities
Payments for production permit acquired
Payments for oil and gas properties
Payments for exploration appraisal/development
Payments made on behalf of joint operation partners
and operations
Receipts from exploration partners and operations
Receipts – farmout
Refund – Austrian final acquisition price
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of shares and options
Payment of share issue costs
Proceeds from issue of shares in subsidiary
Convertible loan note facilities
Convertible loan note repayments
Loan note facilities
Bank loans
Secured for bank loans
Net cash flows from financing activities
Net increase in cash and cash equivalents held
Net foreign exchange differences
Add opening cash and cash equivalents brought forward
-
(1,531,228)
(2,447,818)
(48,762)
(3,692,702)
(4,803,227)
-
(583,132)
-
-
201,997
(3,777,049)
591,229
296,117
-
(8,240,477)
1,330,000
(107,361)
-
(50,000)
2,797,019
(297,346)
5,887,548
1,205,000
-
-
3,500,000
1,320,489
(190,914)
2,302,214
(2,925,989)
116,699
4,953,759
-
-
13,092,221
1,525,392
129,138
3,299,229
Closing cash and cash equivalents at the end of the year
6
2,144,469
4,953,759
The above consolidated statement of cashflows should be read in conjunction with the accompanying notes.
- 41 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(i)
Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and authoritative pronouncements of
the Australian Accounting Standards Board. The financial report has also been prepared on a historical cost basis.
ADX Energy Ltd is a for-profit entity for the purpose of preparing the financial statements.
The financial report is presented in Australian dollars, which is the group’s presentation currency.
Functional and presentation currency
The functional currency of the parent entity is Australian Dollars. ADX has identified Australian dollars as its
functional currency on the basis that all fundraising is in Australian dollars, and loans to subsidiary companies are
made from Australian dollars.
ADX’s subsidiaries have the following functional currencies:
AuDAX Energy Srl – EUR
Bull Petroleum Pty Ltd – AUD
Terra Energy Limited – GBP
ADX VIE GmbH – EUR
Danube Petroleum Limited – GBP
ADX Energy Panonia Srl – EUR
The presentation currency of the Group is Australian dollars.
Going Concern
The financial statements have been prepared on the basis that the Company will continue to meet its commitments
and can therefore continue normal business activities and realise assets and settle liabilities in the ordinary course
of business.
As a producer in Austria, the Group expects to generate cash flows, however with a focus on exploration and
development in other parts of Europe, the Group may need additional cashflows to finance these activities. As a
consequence, the ability of the Company to continue as a going concern may require additional capital fundraising,
farmouts of projects or other financing opportunities. The Directors believe that the Company will continue as a
going concern. As a result the financial information has been prepared on a going concern basis. However, should
fundraising, farmouts or any alternative financing opportunities be unsuccessful, the Company may not be able to
continue as a going concern. No adjustments have been made relating to the recoverability and classification of
liabilities that might be necessary should the Company not continue as a going concern.
(ii)
Statement of Compliance
The financial report complies with Australian Accounting Standards and International Financial Reporting Standards
(IFRS).
- 42 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
(iii) Adoption of new and revised standards
Early adoption of accounting standards
The Group has not elected to apply any pronouncements before their operative date in the annual reporting year
beginning 1 January 2020.
New and amended standards adopted by the Group
There were no material new or amended standards implemented that had a material impact on the financial
statements during the year.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020.
The Conceptual Framework contains new definition and recognition criteria as well as new guidance on
measurement that affects several Accounting Standards. Where the Group has relied on the existing framework in
determining its accounting policies for transactions, events or conditions that are not otherwise dealt with under
the Australian Accounting Standards, the Group may need to review such policies under the revised framework.
The application of the Conceptual Framework did not have a material impact on the Group's financial statements.
(iv)
Significant Accounting Estimates and Judgements
Significant accounting judgements
In the process of applying the Group’s accounting policies, management has made the following judgments, apart
from those involving estimations, which have the most significant effect on the amounts recognised in the financial
statements.
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of
future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of certain assets and liabilities within the next annual reporting year are:
Share-based payment transactions
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined using the value of the services, or a Black-Scholes
model.
Coronavirus (COVID-19) Pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or
may have, on the Group based on known information. Currently there is no significant impact upon the financial
statements or any significant uncertainties with respect to events or conditions which may impact the Group
unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Commitments - Exploration
The Group has certain minimum exploration commitments to maintain its right of tenure of its permits. These
commitments require estimates of the cost to perform exploration work required under these permits.
Deferred Appraisal Costs
The Group capitalises acquisition expenditure and appraisal costs relating to its permits where it is considered likely
to be recoverable or where the activities have not reached a stage which permits a reasonable assessment of the
existence of reserves. While there are certain areas of interest from which no reserves have been extracted, the
Directors are of the continued belief that such expenditure should not be written off since exploration activities in
such areas have not yet concluded.
- 43 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
(v)
Basis of consolidation
The consolidated financial statements comprise the financial statements of ADX Energy Ltd (“Company” or “Parent
Entity”) and its subsidiaries as at 31 December each year (the Group). Subsidiaries are all entities over which the
group has control. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if and only if the Group has:
-
-
-
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities
of the investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.
The financial statements of the subsidiaries are prepared for the same period as the parent entity, using consistent
accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profit and losses resulting from intra-group transactions have been eliminated in full. Subsidiaries are
fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the
date on which control is transferred out of the Group. Control exists where the company has the power to govern
the financial and operating policies of an entity so as to obtain benefits from its activities.
The acquisition of subsidiaries has been accounted for using the purchase method of accounting. The purchase
method of accounting involves allocating the cost of the business combination to the fair value of the assets acquired
and the liabilities and contingent liabilities assumed at the date of acquisition. Accordingly, the consolidated financial
statements include the results of subsidiaries for the period from their acquisition.
(vi)
Business combinations
The purchase method of accounting is used to account for all business combinations regardless of whether equity
instruments or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued or
liabilities incurred or assumed at the date of exchange plus costs directly attributable to the combination. Where
equity instruments are issued in a business combination, the fair value of the instruments is their published market
price as at the date of exchange, adjusted for any conditions imposed on those shares. Transaction costs arising on
the issue of equity instruments are recognised directly in equity.
All identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The excess of the cost of the business combination over
the net fair value of the Group's share of the identifiable net assets acquired is recognised as goodwill. If the cost of
acquisition is less than the Group's share of the net fair value of the identifiable net assets of the subsidiary, the
difference is recognised as a gain in the income statement, but only after a reassessment of the identification and
measurement of the net assets acquired.
- 44 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
(vii)
Foreign currency translation
The presentation currency of the Group is Australian Dollars. The functional currency of ADX Energy Ltd is Australian
Dollars. ADX’s subsidiaries have the following functional currencies:
Danube Petroleum Limited – GBP
Bull Petroleum Pty Ltd – AUD
Terra Energy Limited – GBP
AuDAX Energy Srl – EUR
ADX VIE GmbH – EUR
ADX Energy Panonia Srl – EUR
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies are converted at the rate
of exchange ruling at the balance sheet date.
As at the reporting date the assets and liabilities of the subsidiaries are translated into the presentation currency of
ADX Energy Ltd at the rate of exchange ruling at the balance sheet date and the income statements are translated
at the weighted average exchange rates for the year.
The exchange differences arising on the retranslation are taken directly to a separate component of equity. On
disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign
operation is recognised in the income statement.
(viii) Other taxes
Revenues, expenses and assets are recognised net of the amount of Goods & Services Tax (GST) except:
when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the Statement of Financial Position.
Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified
as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from,
or payable to, the taxation authority.
- 45 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 2 –INCOME AND EXPENSES
Revenue
Revenue is recognised when or as the Group transfers control of goods or services to a customer at the amount to
which the Group expects to be entitled. If the consideration promised includes a variable component, the Group
estimates the expected consideration for the estimated impact of the variable component at the point of recognition
and re-estimated at every reporting period. Revenue from the sale of oil and gas is recognised and measured in the
accounting period in which the goods and/or services are provided based on the amount of the transaction price
allocated to the performance obligations. The performance obligation is the supply of oil and gas over the contractual
term; the units of supply represent a series of distinct goods that are substantially the same with the same pattern of
transfer to the customer. The performance obligation is considered to be satisfied as the customer receives the supply
through the pipeline, based on the units delivered. Hence revenue is recognised over time.
Exploration, evaluation and appraisal expenditure
Exploration expenditure is expensed to the profit or loss statement as and when it is incurred and included as part of
cash flows from operating activities.
Evaluation/appraisal and development expenditure is capitalised to the Statement of Financial Position as oil and gas
properties. Evaluation/appraisal is deemed to be activities undertaken following a discovery from the beginning of
appraisal and pre-feasibility studies conducted to assess the technical and commercial viability of extracting a resource
before moving into the Development phase. The criteria for carrying forward the costs are:
- Such costs are expected to be recouped through successful development and exploitation of the area of interest,
or alternatively by its sale; or
- evaluation activities in the area of interest which has not yet reached a state which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in, or in relation to, the area are continuing.
Costs carried forward in respect of an area of interest which is abandoned are written off in the year in which the
abandonment decision is made.
Consolidated
Year Ended
31 Dec 2020
$
Year Ended
31 Dec 2019
$
5,076,159
308,124
567,317
195,050
686,366
756,477
39,239
-
-
318,897
6,833,016
1,114,613
5,035,455
2,786,536
217,469
8,039,460
649,340
212,374
17,340
879,054
OPERATING REVENUE
Oil sales
Gas sales
Hedging gains, net
Government subsidies
Other operating revenue (including reimbursements)
COST OF GOODS SOLD
Operating costs
Depreciation
Amortisation of asset retirement obligation assets
- 46 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Consolidated
Year Ended
31 Dec 2020
$
Year Ended
31 Dec 2019
$
Note
NOTE 2 –INCOME AND EXPENSES - continued
OTHER EXPENSES – Administration and corporate expenses:
Share based payments – in lieu of cash remuneration
Share based payments – in lieu of other services
Share based payments – other
Less: prior period accrued share based payments
Add: accrued share based payments issued/to be issued after
period end
Net foreign exchange losses/(gains)
Operating lease rental expense
Depreciation – right of use assets
Other administration, personnel and corporate expenses
3(a)
Less: project cost recoveries
OTHER EXPENSES – Finance costs:
Interest expense
Accretion
Right of use assets – interest
Borrowing costs
NOTE 3 – EQUITY-BASED PAYMENTS
412,922
70,000
14,688
497,610
(115,994)
502,470
58,000
-
560,470
(155,651)
111,681
115,994
16,680
69,743
121,220
3,621,197
4,322,137
(508,351)
64,306
-
2,133,944
2,210,712
(1,419,985)
(1,414,707)
2,902,152
796,005
213,278
70,207
2,566
-
74,073
5,516
-
87,500
286,051
167,089
Equity settled transactions:
The Group provides benefits to executive directors, employees and consultants of the Group in the form of share-based
payments, whereby those individuals render services in exchange for shares or rights over shares (equity-settled
transactions).
When provided, the cost of these equity-settled transactions with these individuals is measured by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value of options is determined either using
a Black-Scholes model, or in the case of consulting by directors, the number of options granted will be determined by
dividing the Directors’ consulting fees that the Company has agreed to pay to the Related Parties via equity using a deemed
price based on the volume weighted average sale price of Shares sold on ASX during the 90 days prior to the expiration of
the corresponding calendar quarter in which the Directors’ consulting fees were incurred. In valuing equity-settled
transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of
ADX Energy Ltd (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance and/or service conditions are fulfilled, ending on the date on which the relevant individuals become
fully entitled to the award (the vesting date).
- 47 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 3 – EQUITY-BASED PAYMENTS – continued
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
(i)
(ii)
(iii)
the grant date fair value of the award;
the extent to which the vesting period has expired; and
the number of awards that, in the opinion of the Directors of the Company, will ultimately vest taking into
account such factors as the likelihood of non-market performance conditions being met.
This opinion is formed based on the best available information at reporting date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon
a market condition.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. If an equity-settled award is forfeited, any expense previously
recognised for the award is reversed. However, if a new award is substituted for a cancelled award and designated as a
replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification
of the original award, as described in the previous paragraph.
(a) Value of equity based payments in the financial statements
Consolidated
Year Ended
31 Dec 2020
$
Year Ended
31 Dec 2019
$
Note
Expensed against issued capital:
Share-based payments – Options in lieu of capital raising costs
Expensed in the profit and loss:
Share-based payments – Options to Directors on appointment
Shares and Options issued in lieu of fees:
3(b)(i)
Share-based payments – Shares Issued to Directors
Share-based payments – Options Issued to Directors
3(b)(ii)
Share-based payments – Shares Issued to Co Secs and consultants 3(b)(iii)
3(b)(iv)
Share-based payments – Shares Issued for other services
18,409
14,688
34,505
291,994
86,422
70,000
497,609
-
-
86,250
346,294
69,926
58,000
560,470
(b) Summary of equity-based payments granted during the year:
(i)
Shares pursuant to ADXs’ Directors’ Share Plan, approved by Shareholders on 26 June 2020 as follows:
Date Issued
13/01/2020
26/06/2020
5/11/2020
5/11/2020
Issued Subsequent to
Year End
5/02/2021
Number of
Shares
1,760,714
786,481
958,332
821,427
4,326,954
Value based on
90 Day VWAP $
17,500
5,505
5,750
5,750
34,505
In lieu of part remuneration for
the quarter ended
31/12/2019
31/03/2020
30/06/2020
30/09/2020
958,332
5,750
31/12/2020
- 48 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 3 – EQUITY-BASED PAYMENTS – continued
(b) Summary of equity-based payments granted during the year - continued:
Summarised as:
Director
Ian Tchacos
Paul Fink
Andrew Childs
Edouard Etienvre
Rob Brown*
Philip Haydn-Slater
Issued during the year
2020
Number of
Shares
690,475
690,475
325,000
1,435,290
360,714
825,000
4,326,954
2020
Remuneration
waived $
5,000
5,000
3,250
9,505
3,500
8,250
2019
Number of
Shares
679,110
679,110
1,765,690
-
1,765,690
4,482,142
2019
Remuneration
waived $
6,250
6,250
16,250
-
16,250
41,250
34,505
9,371,742
86,250
* Shares were issued in lieu of remuneration after Rob Brown had resigned as a Director of ADX.
(ii)
Options pursuant to ADXs’ Performance Rights and Option Plan, approved by Shareholders on 26 June 2020
as follows:
Date Issued
13/01/2020
26/06/2020
5/11/2020
5/11/2020
Issued Subsequent to
Year End
5/02/2021
Summarised as:
Director
Ian Tchacos
Paul Fink
Number of
Options
8,793,750
12,578,571
9,451,563
8,470,981
39,294,865
Value based on
90 Day VWAP $
87,938
88,050
56,709
59,297
291,994
In lieu of part remuneration for
the quarter ended
31/12/2019
31/03/2020
30/06/2020
30/09/2020
9,882,811
59,297
31/12/2020
2020
Number of
Options
21,300,446
17,994,419
39,294,865
2020
Remuneration
waived $
155,344
136,650
2019
Number of
Options
21,435,571
17,685,633
2019
Remuneration
waived $
194,344
151,950
291,994
39,121,204
346,294
(iii)
Shares to consultants and company secretaries in lieu of remuneration:
Date Issued
13/01/2020
26/06/2020
5/11/2020
5/11/2020
Number of Shares
1,116,736
3,340,214
3,934,150
4,781,018
Value based on
90 Day VWAP $
10,806
23,243
22,661
29,712
In lieu of part remuneration for
the quarter ended
31/12/2019
31/03/2020
30/06/2020
30/09/2020
13,172,118
86,422
Issued Subsequent to
Year End
5/02/2021
4,388,536
24,368
31/12/2020
- 49 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 3 – EQUITY-BASED PAYMENTS – continued
(b) Summary of equity-based payments granted during the year - continued:
(iv)
On 26 June 2020, ADX granted 5,000,000 unlisted options to Director Edouard Etienvre, as approved by
Shareholders on 26 June 2020. The options have an exercise price of 1.3 cents and expire 26 June 2021.
The assessed fair values of the options were determined using a Black-Scholes option pricing model, taking
into account the exercise price, term of option, the share price at grant date and expected price volatility of
the underlying share, expected dividend yield and the risk-free interest rate for the term of the option. The
inputs to the model used were:
Grant date
Option exercise price ($)
Expected life of options (years)
Dividend yield (%)
26/06/2020
0.013
1
-
Expected volatility (%)
Risk-free interest rate (%)
Underlying share price ($)
Value of Option ($)
131.66
0.24
0.008
0.0029375
The expected life of the options is based on historical data and is not necessarily indicative of exercise
patterns that may occur. The expected volatility reflects the assumption that the historical volatility is
indicative of future trends, which may also not necessarily be the actual outcome. No other features of
options granted were incorporated into the measurement of fair value.
(v)
On 18 December 2020, ADX granted 7,900,000 options to the lead manager of ADX’s Placement in accordance
with the Lead Managers Mandate. Value $18,409. These options have an exercise price of 0.8 cents and
expire 15 June 2021.
(vi)
On 18 December, ADX issued 11,666,666 shares ($70,000) in consideration for investor relation services.
(c) Weighted average exercise price
The following table shows the number and weighted average exercise price (“WAEP”) of share options granted as share
based payments.
12 Months to
31 December
2020
Number
12 Months to
31 December
2020
WAEP $
12 Months to
31 December
2019
Number
12 Months to
31 December
2019
WAEP $
Outstanding at the beginning of year
48,891,251
Granted during the year
Granted during the year
Granted during the year
Granted during the year
Granted during the year
Granted during the year
Lapsed during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at year end
8,793,750
12,578,571
9,451,563
8,470,981
5,000,000
7,900,000
-
(32,405,165)
68,680,951
68,680,951
Nil
Nil
Nil
Nil
Nil
0.013
0.008
-
Nil
0.0019
0.0019
18,770,047
18,072,991
12,798,214
8,249,999
-
-
-
0.012
Nil
Nil
Nil
-
-
-
(9,000,000)
0.025
-
48,891,251
48,891,251
-
Nil
Nil
The weighted average share price for options exercised during the year was nil (2019: nil).
- 50 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 3 – EQUITY-BASED PAYMENTS – continued
(d) Weighted average fair value
The weighted average fair value of equity-based payment options granted during the year was $0.0062 (2019: $0.0089).
(e) Range of exercise price
The range of exercise price for options granted as share based payments outstanding at the end of the year was $nil to
$0.008 (2019: $nil).
(f) Weighted average remaining contractual life
The weighted average remaining contractual life of share based payment options that were outstanding as at the end of
the year was 2.83 years (2019: 3.33 years).
NOTE 4 - INCOME TAX EXPENSE
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint
operations, and the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in
joint operations, in which case a deferred tax asset is only recognised to the extent that it is probable that the
temporary difference will reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax
asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
- 51 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 4 - INCOME TAX EXPENSE - continued
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority. The amount of benefits brought to account or which may be realised in the future is based on
the assumption that no adverse change will occur in income legislation and the anticipation that the Group will derive
sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility
imposed by the law.
(a) Income Tax Expense
The reconciliation between tax expense and the product of
accounting profit/(loss) before income tax multiplied by the
Company’s applicable income tax rate is as follows:
Profit/(loss) for year before tax
Prima facie income tax (benefit) @ 30%
Tax effect of non-deductible items
Tax rate differential
Translation differences
Deferred tax assets not brought to account
Income tax expense/(benefit) attributable to operating result
(b) Deferred tax assets not recognised relate to the following:
Consolidated
Year Ended
31 Dec 2020
$
Year Ended
31 Dec 2019
$
(5,445,923)
(1,633,777)
206,112
196,481
21,865
250,072
(959,247)
(1,038,956)
(311,687)
171,604
-
-
188,035
47,952
Tax losses
13,992,715
14,479,373
These deferred tax assets have not been brought to account as it is not probable that tax profits will be available against
which deductible temporary differences can be utilised.
(c) Deferred tax assets and liabilities:
Deferred tax assets:
Temporary differences - Asset retirement obligations
Temporary differences - Tax losses
Temporary differences - Other
Deferred tax liabilities:
Temporary differences - Oil and gas properties
Temporary differences - Other
313,859
861,489
229,380
337,074
-
-
1,404,728
337,074
434,890
121,251
556,141
468,449
-
468,449
(d) Franking Credits
The franking account balance at year end was $nil (2019: $nil).
(e) Tax Consolidation Legislation
ADX Energy Ltd and its 100% owned Australian subsidiaries have not formed a tax consolidated group.
- 52 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 5 - EARNINGS PER SHARE
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs
of servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any
bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary
shares, adjusted for any bonus element.
Consolidated
Year Ended
31 Dec 2020
Cents
Year Ended
31 Dec 2019
Cents
Basic earnings/(loss) per share attributable to members of ADX Energy Ltd
(0.25)
(0.077)
Profit/(loss) attributable to ordinary equity holders of the Company used in
calculating:
- basic earnings per share
(4,280,065)
(979,700)
$
$
Weighted average number of ordinary shares outstanding during the year
used in the calculation of basic earnings per share
1,710,039,752
1,269,022,906
Number
of shares
Number
of shares
Diluted earnings per share is not disclosed because potential ordinary shares, being options granted, are not dilutive
and their conversion to ordinary shares would not demonstrate an inferior view of the earnings performance of the
Company.
- 53 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 6 - CASH AND CASH EQUIVALENTS
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as
described above.
Cash at bank and on hand
Consolidated
Year Ended
31 Dec 2020
$
Year Ended
31 Dec 2019
$
2,144,469
4,953,759
Cash includes $0.43 million held by 49.18% owned subsidiary Danube Petroleum Limited.
(i) Reconciliation of loss for the period to net cash flows used in operating
activities
Loss after income tax
Non-Cash Items:
Depreciation and amortisation
Loss on sale of plant and equipment
Foreign exchange losses/(gains)
Share-based payments expensed
Accretion
Change in assets and liabilities:
(Increase)/decrease in receivables
(Increase)/decrease in inventories
(Increase)/decrease in deferred tax assets
Increase/(decrease) in payables
Increase/(decrease) in income tax payable
Increase/(decrease) in lease liabilities
Increase/(decrease) borrowings
Increase/(decrease) in deferred tax liabilities
Increase/(decrease) in provisions
(4,486,676)
(1,086,908)
3,125,225
229,714
26,602
16,680
497,610
70,207
1,048,557
(205,226)
(1,067,654)
(327,885)
(64,339)
(119,706)
27,655
170,939
(163,143)
-
(508,351)
560,469
5,516
(2,731,435)
(315,164)
(337,074)
272,513
64,339
-
-
320,485
199,544
Net cash flows used in operating activities
(1,451,154)
(3,326,352)
(ii) Non-Cash Financing and Investing Activities
- As a result of adopting AASB 16, right of use lease asset additions for the year amounted to $606,100 (refer
note 10).
- Fees paid to the lead manager of the placement included share options valued at $18,409 (refer note 14).
-
In January 2020, $1,050,000 of convertible notes were converted to 149,999,995 shares ($0.007/share). Refer
to note 14.
There were no other non-cash financing or investing activities during the year (2019: none). Non-cash operating
activities, consisting of shares and options granted in lieu of remuneration are disclosed in note 3.
- 54 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 7 – OTHER RECEIVABLES
Receivables are initially recognised at fair value and subsequently measured at amortised cost, less provision for
doubtful debts. Current receivables for GST are due for settlement within 30 days and other current receivables
(including VAT) within 12 months.
Current
Trade and other debtors
GST/VAT refundable
Prepayments
Other
Total current receivables
Consolidated
Year Ended
31 Dec 2020
$
Year Ended
31 Dec 2019
$
560,518
789,214
65,898
203,599
1,249,621
1,555,530
588,548
59,222
1,619,229
3,452,921
Information about the impairment of trade and other receivables, their credit quality and the group’s exposure to
credit risk, foreign currency risk and interest rate risk can be found in note 23. Receivables do not contain past due or
impaired assets as at 31 December 2020 (2019: none).
Non-Current
Cash secured for bank loans
Other
EUR 120,000 is held as security for bank loans – refer note 12.
NOTE 8 – INVENTORIES
Consolidated
Year Ended
31 Dec 2020
$
Year Ended
31 Dec 2019
$
190,914
-
190,914
-
37,516
37,516
Inventories include hydrocarbon stocks, consumable supplies and maintenance and drilling spares. Inventories are
valued at the lower of cost and net realisable value. Cost is determined on a weighted average basis and includes direct
costs and an appropriate portion of fixed and variable production overheads where applicable. Inventories determined
to be obsolete or damaged are written down to net realisable value, being the estimated selling price less selling costs.
Consolidated
Year Ended
31 Dec 2020
$
772,163
20,964
206,319
999,446
Year Ended
31 Dec 2019
$
293,107
22,057
-
315,164
Drilling inventories
Oil and gas inventories
Materials and consumables
Total current inventories
- 55 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 9 – OIL AND GAS PROPERTIES
Oil and gas properties are stated at cost less accumulated depreciation and impairment charges. Oil and gas properties
include the costs to acquire, construct, install or complete production and infrastructure facilities such as pipelines,
capitalised borrowing costs, development wells and the estimated cost of dismantling and restoration. Subsequent
capital costs, including major maintenance, are included in the asset’s carrying amount only when it is probable that
future economic benefits associated with the item will flow to the Group and the cost of the item can be reliably
measured.
Oil and gas properties and other plant and equipment are depreciated to their estimated residual values at rates based
on their expected useful lives with a maximum period of 100 months . All items of oil and gas properties are
depreciated using the straight-line method over their useful life capped at 100 months. They are depreciated as
follows: • Buildings – 30 years; • Oil and Gas equipment – 8.3 years.
Consolidated
Year Ended
31 Dec 2020
$
Year Ended
31 Dec 2019
$
381,308
190,835
391,087
5,392,632
8,078,874
1,685,278
69,647
15,631
312,912
-
283,372
5,229,189
9,490,449
1,873,795
444,092
-
7,747,515
23,952,807
5,372,435
23,006,244
312,912
102,282
(39,252)
5,366
381,308
-
180,317
10,518
190,835
-
316,078
(3,166)
-
312,912
-
-
-
-
Austria
Buildings
Undeveloped land
Field office fixtures and equipment
Plant and machinery
Wells
Retirement obligation assets
Construction in progress
Rights and other intangible assets
Romania
Appraisal costs
Reconciliation of the carrying amount of oil and gas assets:
Buildings – opening balance
Additions
Depreciation
Translation differences
Undeveloped Land – opening balance
Additions
Translation differences
- 56 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Consolidated
Year Ended
31 Dec 2020
$
Year Ended
31 Dec 2019
$
-
286,339
(2,967)
-
283,372
-
5,293,876
-
(64,687)
-
5,229,189
-
9,632,004
283,372
153,249
(55,329)
9,795
391,087
5,229,189
789,490
291,754
1,785
(944,156)
24,570
5,392,632
9,490,449
189,120
142,815
(1,785)
(1,747,108)
(141,555)
5,383
-
8,078,874
9,490,449
1,873,795
56,313
(28,239)
(217,455)
864
-
1,891,135
-
(17,340)
-
1,685,278
1,873,795
444,092
56,053
(291,754)
(142,815)
4,071
69,647
-
444,092
-
-
444,092
NOTE 9 – OIL AND GAS PROPERTIES - continued
Field office fixtures and equipment – opening balance
Additions
Depreciation
Translation differences
Plant and machinery – opening balance
Additions
Transferred from Construction in Progress
Transferred from Wells
Depreciation
Translation differences
Wells – opening balance
Additions
Transferred from Construction in Progress
Transferred to Plant and Machinery
Depreciation
Translation differences
Retirement obligation assets – opening balance
Additions
Disposals
Amortisation
Translation differences
Construction in progress – opening balance
Additions
Transferred to Plant and machinery
Transferred to Wells
Translation differences
- 57 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 9 – OIL AND GAS PROPERTIES - continued
Rights and other intangible assets – opening balance
Additions
Depreciation
Translation differences
Appraisal costs – Romania – opening balance
Additions
Translation differences
(i) Acquisition of Austrian fields:
Consolidated
Year Ended
31 Dec 2020
$
Year Ended
31 Dec 2019
$
-
16,351
(679)
(41)
15,631
5,372,435
2,269,396
105,684
7,747,515
-
-
-
-
-
-
5,372,435
-
5,372,435
On 2 December 2019, ADX announced completion of the acquisition of the Zistersdorf and Gaiselberg oil and gas fields
located onshore in the Vienna Basin, Austria (Production Assets) as well as agreements for exploration data and access
arrangements to RAG’s production infrastructure in Upper Austria.
The final purchase price for the Production Assets was EUR 2,059,671 (A$3,362,291).
Final purchase price
Additional costs of the acquisition
Consists of:
Buildings
Field office fixtures and equipment
Plant and machinery
Wells
Retirement obligation assets
Inventories
Provision for asset retirement obligations
Deferred tax assets
Deferred tax liabilities
Other net current assets
Translation differences
- 58 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,362,291
364,620
3,726,911
316,078
286,339
5,293,876
9,632,004
1,891,135
22,057
(13,804,648)
323,208
(451,862)
152,714
66,010
3,726,911
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 10 – RIGHT OF USE ASSETS
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses,
adjusted for any remeasurement of lease liabilities. The cost of right-to-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease
incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the
lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated
useful life and the lease term. Right-of-use assets are subject to impairment.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases (ie: those leases that have a lease
term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease
of low-value assets recognition exemption to leases that are considered of low value. Lease payments on short-term
leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be
exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising
the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense
in the period on which the event or condition that triggers the payment occurs. In calculating the present value of lease
payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit
in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to
reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease
payments or a change in the assessment to purchase the underlying asset.
Non-Current Assets
Right of use assets - properties
Lease Liabilities
Current
Non-Current
Consolidated
Year Ended
31 Dec 2020
$
Year Ended
31 Dec 2019
$
484,880
121,870
364,524
486,394
-
-
-
-
- 59 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 11 – TRADE AND OTHER PAYABLES
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services
provided to the Group prior to the end of the year that are unpaid and arise when the Group becomes obliged to make
future payments in respect of the purchase of these goods and services.
Current
Trade creditors and accruals
Accrued interest payable
Hedging liabilities
Consolidated
Year Ended
31 Dec 2020
$
Year Ended
31 Dec 2019
$
1,595,757
17,260
335,669
2,109,711
72,321
-
1,948,686
2,182,032
The Group’s exposure to interest rate risk is discussed in Note 23.
NOTE 12 – BORROWINGS
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method. The
carrying amount of borrowings approximates their fair value.
Convertible Note Facilities
In the prior year, on 16 July 2019, ADX finalised Convertible Loan Facility Agreements (‘Convertible Notes’) which were
convertible to shares in ADX to raise A$1,205,000. Included in this new funding was $150,000 provided equally by
ADX’s Directors Ian Tchacos, Paul Fink and previous director, Robert Brown.
The key terms for the Convertible Notes were as follows:
1. Loan Term: 6 months commencing 12 July 2019, extendable by mutual agreement in writing at least 15 days
prior to expiry of Loan Term.
2. Loan Interest: 10% per annum; Payable at Termination.
3. Loan Conversion Rights: The lender has the option to convert part or all of the loan into ADX shares prior to
Termination. The conversion price is determined the lower of:
a. the share price used for any capital raising by issue of ADX shares during the term of the Loan
Agreement; and
b. A$0.007 per share.
4. Early Termination by ADX: ADX may terminate the loan at any time from 12 October 2019 to expiry by
repayment of Loan Amount plus accrued interest. ADX will provide the Lender with three (3) business days
notice prior to allow the Lender time to elect conversion.
If the price under 3(a) is less than A$0.007, then the conversion to shares was subject to Shareholder approval. All
conversion rights of Directors of ADX Energy Ltd and their related parties (including associates) are subject to
Shareholder approval.
During the 2019 year, $105,000 of these convertible loan facilities were converted at $0.007 to 14,999,996 shares.
In January 2020, $50,000 of these convertible loan facilities were repaid in cash, and the remaining $1,050,000 have
been converted at $0.007 to 149,999,995 shares.
- 60 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 12 – BORROWINGS - continued
Loan Notes
In the prior year, in November 2019, 35 loan notes of $100,000 each totalling A$ 3.5 million were issued. For each
Loan Note, ADX issued the subscriber 3,857,143 unlisted options (total 135,000,005 options), with an exercise price of
1.8 cents per option and expiring 26 November 2021. Interest is paid quarterly at 6% per annum.
On 23 November 2020, the Loan Note holders and ADX entered into a deed of variation (Deed of Variation). The
variation to the Loan Note terms was necessary as a result of the COVID-19 pandemic which caused a significant
deterioration in oil prices.
Under the original terms of the Loan Notes, 50% of the principal was to be repaid after 12 months, and the remainder
after 24 months. Under the Deed of Variation, the repayment period was extended and the principal amount of A$3.5
million has been split into 2 tranches where;
the first tranche of 50% of the principal amount will be repaid semi annually with 4 equal payments over 2
years commencing from 26 May 2021 and ending on 26 November 2022; and
the second tranche of 50% of the principal amount will be repayable as a bullet payment on 26 November
2022.
Interest will continue to accrue on the principal amount at a rate of six per cent (6%) per annum in accordance with
the original Loan Note terms.
The Company was granted a waiver of ASX Listing Rule 6.23.3 to permit the Company to cancel the existing 135,000,005
options issued to the Loan Note Holders (as approved by Shareholders on 6 December 2019) and issue 135,000,040
new, replacement options (Loan Note Options as approved by Shareholders on 19 February 2021) as follows:
tranche 1: 67,500,020 unlisted options with an exercise price of A$0.01 per option, expiring on 26 May
2022; and
tranche 2: 67,500,020 unlisted options with an exercise price of A$0.015 per option, expiring on 26
November 2023.
Bank Loans
As announced on 5 August 2020, ADX’s Austrian subsidiary, ADX VIE GmbH, secured banking facilities totalling EUR
1,130,000 from Volksbank and guaranteed by the Austria Wirtschafts (“Economy”) Service (the Innovation and Start
Up Financing bank of the Austrian state) (AWS), split between two loan facilities:
-
-
EUR 500,000: interest-free until 31 July 2022, at which point interest will be charged at Euribor plus 0.75%, with
the rate to be at least 0%; and
EUR 630,000: incurring interest at 1% per annum on the drawn down value.
The Collateral for the loan facilities is EUR 120,000 (held in an ADX VIE bank account with Volksbank).
The loan is repayable between 30 June 2022 and 31 December 2024.
Loan covenants restrict dividends and profit distributions but do not prevent payment of intercompany recharges
or loans. A negative pledge relating to other debt is limited to taking up further debt at a subsidiary level and does
not restrict servicing of existing debt.
As at the date of this report, EUR 830,000 (A$1,320,489) of loans have been drawn down.
- 61 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 12 – BORROWINGS - continued
Current
Convertible notes
Loan notes – interest bearing
Insurance funding – interest bearing
Non-Current
Loan notes – interest bearing
Bank loans – interest bearing
Bank loans – non-interest bearing
Consolidated
Year Ended
31 Dec 2020
$
Year Ended
31 Dec 2019
$
-
875,000
27,654
902,654
1,100,000
1,750,000
-
2,850,000
2,625,000
1,750,000
525,014
795,475
-
-
3,945,489
1,750,000
The Group’s exposure to liquidity and interest rate risk is discussed in Note 23.
NOTE 13 – PROVISIONS
Obligations associated with exploration, development and production assets are recognised when the Group has a
present obligation, the future sacrifice of the economic benefits is probable, and the provision can be measured
reliably. The determination of the provision requires significant judgement in terms of the best estimate of the costs
of performing the work required, the timing of the cash flows and the appropriate discount rate. A change in any, or a
combination of, the key assumptions used to determine the provision could have a material impact on the carrying
value of the provision.
On an ongoing basis, the restoration will be remeasured in line with the changes in the time value of money (recognised
as an expense and an increase in the provision), and additional disturbances recognised as additions to the provision.
Key Estimates and Judgements
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a
provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present
value of those cash flows (where the effect of the time value of money is material). Asset retirement obligation costs
will be incurred by the Group at the end of the operating life of some of the Group’s facilities and properties. The
Group assesses its asset retirement obligations provision at each reporting date. The ultimate asset retirement
obligations costs are uncertain and cost estimates can vary in response to many factors, including changes to relevant
legal requirements, the emergence of new restoration techniques or experience at other production sites. The
expected timing, extent and amount of expense can also change. Therefore, significant estimates and assumptions are
made in determining the provision for asset retirement obligations. As a result, there could be significant adjustments
to the provisions established which would affect future financial results. The provision at reporting date represents
management’s best estimate of the present value of the future asset retirement obligations costs required.
- 62 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 13 – PROVISIONS - continued
Current
Provision for employee entitlements
Provision for restoration – exploration assets
Non-Current
Consolidated
31 December
2020
$
31 December
2019
$
294,585
-
294,585
199,544
258,184
457,728
Provision for asset retirement obligations (ARO) – production assets
13,969,628
13,810,164
Reconciliation of the movement in restoration/ARO provisions:
Provision for restoration (current) – opening balance
Reversal of provision upon windup of subsidiary
Translation differences
258,184
(258,184)
-
-
283,844
-
(25,660)
258,184
Provision for asset retirement obligations (non-current) – opening balance
13,810,164
-
Additions – acquisition of Austrian fields (note 9(i))
-
13,804,648
Additions
Accretion
Translation differences
NOTE 14 – ISSUED CAPITAL
81,451
70,207
7,806
-
5,516
-
13,969,628
13,810,164
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds.
(a)
Issued Capital
Ordinary shares fully paid
(b) Movements in Ordinary Share Capital
Number of
Shares
Summary of Movements
1,525,312,281 Opening balance 1 January 2020
4,326,954
13,172,118
Issue of shares to Directors
Issue of shares to consultants and co secretaries
221,250,004 Placement at $0.006
11,666,666
32,405,165 Exercise of Unlisted Options
Issue of shares in lieu of services
166,666 Exercise of Listed Options
149,999,995 Conversion of convertible notes
Costs of share issues – cash
1,958,299,849 Closing Balance at 31 December 2020
- 63 -
74,334,593
71,889,435
Note
3(b)(i)
3(b)(ii)
14(b)(i)
14(b)(ii)
14(c)
14(c)
12
2020
$
71,889,435
34,505
86,422
1,327,500
70,000
-
2,500
1,050,000
(125,769)
74,334,593
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 14 – ISSUED CAPITAL - continued
Number of
Shares
Summary of Movements
1,207,970,915 Opening balance 1 January 2019
9,371,742
7,467,828
Issue of shares to Directors
Issue of shares to consultants and co secretaries
200,000,000 Placement at $0.01
79,701,800 Share Placement Plan at $0.01
5,800,000
Issue of shares in lieu of services
14,999,996 Conversion of convertible notes
Costs of share issues – cash
1,525,312,281 Closing Balance at 31 December 2019
2019
$
69,070,587
86,250
69,926
2,000,000
797,018
58,000
105,000
(297,346)
71,889,435
(i) On 18 December 2020, ADX issued 221,250,004 shares under a placement raising a total $1,327,500 before costs.
For every two shares subscribed for under the placement, ADX granted one free attaching unlisted Option
(exercisable at $0.008 each on or before 15 June 2021).
(ii) On 18 December 2020, ADX issued 11,666,666 shares ($70,000) in lieu of services for investor relations. For every
two shares, ADX granted one free attaching unlisted Option (exercisable at $0.008 each on or before 15 June
2021).
(c) Options on issue at year end
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Total Options
During the year:
Number
135,000,005
124,358,338
5,000,000
6,354,086
10,864,955
3,954,545
4,106,250
12,578,571
9,451,563
8,470,981
320,139,294
Exercise Price
$ 0.018
$ 0.008
$ 0.013
$ nil
$ nil
$ nil
$ nil
$ nil
$ nil
$ nil
Expiry Date
26/11/2021
15/6/2021
26/6/2021
31/5/2022
31/5/2023
31/10/2023
31/1/2024
26/6/2024
31/7/2024
31/10/2024
(i)
(ii)
39,294,865 unlisted options were granted as in lieu of remuneration to Directors Ian Tchacos and Paul Fink.
Refer note 3(b)(ii).
116,458,338 unlisted options were issued for every two shares subscribed for in the December 2020 placement
and with the December 2020 shares in lieu of services. Refer note 14(b).
7,900,000 unlisted options were issued to the lead broker in the December 2020 placement.
5,000,000 unlisted options were granted to Director Edouard Etienvre as a sign-on bonus. Refer note 3(b)(iv).
No unlisted options were cancelled (2019: nil).
95,000,621 Listed options lapsed.
166,666 Listed options were exercised (2019: nil).
(iii)
(iv)
(v)
(vi)
(vii)
(viii) 32,405,165 unlisted options were exercised by Directors (exercise price was nil).
- 64 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 14 – ISSUED CAPITAL - continued
(d) Terms and conditions of contributed equity
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at shareholders’ meetings. In the event of winding up of the Company, ordinary shareholders rank after all
other shareholders and creditors are fully entitled to any proceeds of liquidations.
(e) Capital management
When managing capital, management's objective is to ensure the entity continues as a going concern as well as
maintains optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a
capital structure that ensures the lowest cost of capital available to the entity.
Management may in the future adjust the capital structure to take advantage of favourable costs of capital and issue
further shares in the market. Management has no current plans to adjust the capital structure. There are no plans to
distribute dividends in the next year.
NOTE 15 - RESERVES
Share-based payments reserve
Foreign currency translation reserve
Hedging reserve – refer note 17
Option premium reserve
Asset revaluation reserve
Share-based payments reserve
Balance at the beginning of the year
Share-based payments (options granted)
Balance at the end of the year
Nature and purpose of the reserve:
The Share-based payments reserve is used to recognise the fair value of
options issued but not exercised.
Foreign currency translation reserve
Balance at the beginning of the year
Currency translation differences
Balance at the end of the year
Nature and purpose of the reserve:
Consolidated
31 December
2020
$
31 December
2019
$
4,961,047
(1,456,267)
(250,470)
2,915,542
250,000
4,635,242
(1,611,204)
-
2,915,542
250,000
6,419,852
6,189,581
4,635,242
325,805
4,961,047
4,289,948
346,294
4,635,242
(1,611,204)
154,937
(1,456,267)
(1,050,126)
(561,078)
(1,611,204)
The foreign currency translation reserve is used to record exchange differences arising from the translation of the
financial statements of foreign subsidiaries.
Nature and purpose of the other reserves:
(i)
Option premium reserve
The option premium reserve is used to accumulate proceeds received from the issuing of options.
- 65 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 15 – RESERVES - continued
Asset revaluation reserve
(ii)
The asset revaluation reserve is used to record increments and decrements in the value of non-current assets. This
reserve can only be used to pay dividends in limited circumstances.
NOTE 16 – NON-CONTROLLING INTERESTS
Non-Controlling Interests
Movement during the year:
Balance at the beginning of the year
Capital invested by non-controlling interests in subsidiary
Share of loss for the period
Share of other comprehensive loss
Balance at the end of the year
Consolidated
31 December
2020
$
8,837,270
31 December
2019
$
9,059,704
9,059,704
-
(206,611)
(15,823)
8,837,270
3,419,316
5,887,548
(107,208)
(139,952)
9,059,704
Non-controlling interests represent Reabold Resources Plc (LSE AIM:RBD) (Reabold) interest held in the Danube group.
The Danube Group consists of Danube Petroleum Limited (registered in England and Wales) and its wholly owned
Romanian subsidiary, ADX Energy Panonia Srl.
During the year, Reabold subscribed to the following additional shares in Danube:
2020
Date
Total for 2020
Subscriber
# Danube Shares
-
GBP
-
AUD Equivalent
-
2019
Date
10 May 19
16 September 19
1 October 2019
26 November 2019
2 December 2019
Subscriber
Reabold
Reabold
Reabold
Reabold
Reabold
16 September 19
21 October 2019
26 November 2019
ADX Energy Ltd
ADX Energy Ltd
ADX Energy Ltd
Total for 2019
# Danube Shares
375,940
237,838
572,973
200,000
1,427,604
2,814,355
158,559
381,982
241,928
782,469
3,596,824
GBP
375,940
237,838
572,973
240,000
1,713,124
3,139,875
158,559
381,982
290,314
830,855
3,970,730
AUD Equivalent
685,084
429,801
1,043,665
456,408
3,272,590
5,887,548
289,553
729,809
548,857
1,568,219
7,455,767
As at 31 December 2020, Reabold holds a 50.82% interest in Danube (2019: 50.82%). ADX Energy Ltd continues to
consolidate the Danube Group as it has control via day-to-day management, accounting and two out of three directors
on the board of Danube Petroleum Limited are directors of ADX Energy Ltd.
- 66 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 16 – NON-CONTROLLING INTERESTS - continued
Summarised financial information for Danube Petroleum Limited and its’ 100% owned subsidiary ADX Energy Panonia
SRL is as follows. The amounts disclosed are before inter-company eliminations:
Summarised Statement of Financial Position
Current assets
Current liabilities
Current net assets
Non-current assets
Non-current liabilities
Non-current net assets
Net Assets
Summarised Statement of Comprehensive Income
Revenue
Loss for the period
Other comprehensive income/(loss)
Total comprehensive loss
Loss allocated to Non-Controlling Interests
Other comprehensive loss allocated to Non-Controlling Interests
Summarised Statement of Cash Flows
Cashflows from/(used in) operating activities (including VAT paid)
Cashflows from/(used in) investing activities
Cashflows from financing activities
Net foreign exchange differences
Net increase/(decrease) in cash and cash equivalents
NOTE 17 – DERIVATIVE FINANCIAL INSTRUMENTS
The Group’s accounting policy for cash flow hedges are as follows:
Consolidated
31 December
2020
$
1,885,168
(322,253)
1,562,915
31 December
2019
$
4,360,724
(173,923)
4,186,801
14,701,065
12,514,869
-
-
14,701,065
12,514,869
16,263,980
16,701,670
-
(406,557)
(31,134)
(437,691)
(206,611)
(15,823)
-
(286,257)
(373,687)
(659,944)
(107,208)
(139,952)
(290,568)
(2,442,252)
94,587
(181,974)
(2,820,207)
(1,515,215)
(4,836,677)
7,455,767
(185,110)
918,765
Cash flow hedges are a derivative or financial instrument designated to hedge the exposure to variability in cash flows
attributable to a particular risk associated with an asset, liability or forecast transaction.
Measurement: Measured at fair value. The fair value of oil derivative contracts is determined by estimating the
difference between the relevant market prices and the contract price, for the volumes of the derivative contracts.
Recognition date: At the date the instrument is designated as a hedging instrument.
- 67 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 17 – DERIVATIVE FINANCIAL INSTRUMENTS
Changes in fair value: Changes in the fair value of derivatives designated as cash flow hedges are recognised
directly in other comprehensive income and accumulated in equity in the hedging reserve to the extent that the
hedge is effective. Ineffectiveness is recognised on a cash flow hedge where the cumulative change in the
designated component value of the hedging instrument exceeds on an absolute basis the change in value of the
hedged item attributable to the hedged risk. To the extent that the hedge is ineffective, changes in fair value are
recognised immediately in the income statement within other income or other expenses. Amounts accumulated
in equity are transferred to the income statement or the statement of financial position, for a non-financial asset,
at the same time as the hedged item is recognised. When a hedging instrument expires or is sold, terminated or
exercised, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing
in equity at that time remains in equity and is recognised when the underlying forecast transaction occurs. When
a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is
immediately transferred to the income statement.
Hedge effectiveness is determined at the inception of the hedge relationship, and through regular prospective
assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The
Group enters into hedge relationships where the critical terms of the hedging instrument match with the terms of the
hedged item, and so a qualitative assessment of effectiveness is performed. If changes in circumstances affect the
terms of the hedged item such that the critical terms no longer match with the critical terms of the hedging instrument,
the Group uses the hypothetical derivative method to assess effectiveness.
Hedging reserves
The hedging reserve includes the cash flow hedge reserve and the costs of hedging reserve. The cash flow hedge reserve
is used to recognise the effective portion of gains or losses on derivatives that are designated and qualify as cash flow
hedges. The group defers the changes in the forward element of forward contracts and the time value of option
contracts in the costs of hedging reserve.
Hedging Reserve (included in Reserves - note 14)
Balance brought forward
Change in value of hedging instruments recognised in Other
Comprehensive Income for the period
Less: Deferred tax
Balance at the end of the period
Consolidated
31 December
2020
$
31 December
2019
$
-
333,716
(83,246)
250,470
-
-
-
-
As at 31 December 2020, the following derivative financial instruments are in place:
Fixed price swaps for a fixed Brent crude oil price from January 2021 to April 2021 at USD 41.77 per barrel; and
Fixed price swaps for a fixed Brent crude oil price from January 2021 to June 2021 at USD 44.34 per barrel.
In total, ADX’s subsidiary, ADX VIE GmbH, has fixed price swaps in place for the period between 1 January 2021 and
30 April 2021 representing approximately 80% of its forecast proven (1P) production and fixed price swaps in place
for the period between 1 May 2021 and 30 June 2021 representing circa 40% of its forecast proven (1P) production.
Fixed Price Swaps
Barrels of Oil
(BBL)
Fixed Price
USD per BBL
January 2021 to April 2021
January 2021 to June 2021
12,216
17,925
USD 41.77
USD 44.34
- 68 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 18 – PARENT ENTITY INFORMATION
Statement of Financial Position information
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net Assets
Issued capital
Reserves
Accumulated losses
Profit and loss information
Profit/(loss) for the year
Comprehensive profit/(loss) for the year
Commitments and contingencies
There are no commitments or contingencies, including any guarantees
entered into by ADX Energy Ltd on behalf of its subsidiaries as at year end.
Company
31 December
2020
$
31 December
2019
$
1,614,042
1,605,631
(1,251,366)
(2,625,000)
1,680,370
4,121,993
(3,131,300)
(1,750,000)
(656,693)
921,063
74,334,593
8,126,590
71,889,435
7,800,785
(83,117,876)
(78,769,157)
(656,693)
921,063
(4,348,719)
(4,348,719)
(2,612,552)
(2,612,552)
Subsidiaries
Name of Controlled Entity
Class of Share
Place of
Incorporation
% Held by Parent Entity
AuDAX Energy Srl
Bull Petroleum Pty Ltd
Terra Energy Limited
ADX VIE GmbH
Danube Petroleum Limited
ADX Energy Panonia Srl
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Italy
Australia
UK
Austria
UK
Romania
31 December 2020
31 December 2019
100%
100%
100%
100%
100%
100%
Held 100% by Terra
Energy Limited
Held 100% by Terra
Energy Limited
49.18%
49.18%
Held 100% by
Danube Petroleum
Limited
Held 100% by
Danube Petroleum
Limited
Alpine Oil & Gas Pty Ltd
Ordinary
Australia
-
100%
Alpine Oil & Gas Pty Ltd was wound up in December 2020.
None of the above subsidiaries are audited by Rothsay Auditing.
Refer to note 16, non-controlling interests, for details on Danube Petroleum Limited Group.
- 69 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 19 – COMMITMENTS AND CONTINGENCIES
(a)
Operating leases (non-cancellable):
Within one year
Later than one year, not later than five years
Balance at the end of the year
Consolidated
31 December
2020
$
31 December
2019
$
16,952
-
16,952
17,628
1,352
18,980
These non-cancellable operating leases are for office premises and a photocopier.
Commitments and Contingencies for Oil and Gas Properties
(b)
In order to maintain current rights of tenure to exploration licenses the Company may be compelled to perform minimum
exploration activities to meet requirements specified by the relevant governments. These expenditure commitments may
be varied as a result of renegotiations, relinquishments, farm-outs or sales.
Parta Exploration License and Iecea Mare Production License - Romania
Ownership of Parta Exploration License and Iecea Mare Production License.
ADX holds a 49.2% shareholding in Danube Petroleum Limited (Danube). The remaining shareholding in Danube is held by
Reabold Resources Plc. Danube via its‘ wholly owned subsidiary, ADX Energy Panonia srl, holds a 100% interest in the Parta
Exploration license (including a 100% interest in the Parta Appraisal Sole Risk Project) and a 100% interest in the Iecea
Mare Production license. ADX is the operator of the permit pursuant to a Services Agreement with Danube.
Parta Exploration License
In December 2012, the Romanian Government ratified the concession agreement for ADX’s EX 10 Parta license (“Parta
Permit”). The committed work program agreed in June 2019 for the Parta Permit requires the acquisition of 60 km of 2D
and 100 km2 of 3D seismic and the drilling of two exploration wells. Total commitments are estimated at A$5.4 million
(EUR 3.5 million) for a 2 year period commencing 21 June 2019 following an extension agreed with NAMR.
ADX Energy Panonia SRL (“ADX Panonia”) share of this commitment is 100% following the non-performance of a farmin
commitment by Parta Energy Pty Ltd (“Parta Energy”) (being a wholly owned subsidiary of ASX listed Tamaska Oil and Gas
Limited (“Tamaska”)) to Fund 100 km2 of 3D seismic at an estimated cost of A$ 2.5 million which was contracted to be
funded by Tamaska.
To date approx. 100 km of 2D (surface) and 50 km2 of 3D (surface area) seismic has been acquired. The current license
validity is until 21 June 2021. In order to retain the license, ADX Panonia have committed to an additional 60 km of 2D
seismic and approximately 100 km2 of 3D seismic.
While all landowner, local authority and environmental permits had been obtained for the approx. 100 sqkm survey, the
survey had to be cancelled because the 3D funding farminee Parta Energy had informed ADX on extremely short notice
that it would not proceed with the farmin transaction. This came as a surprise to ADX and its Hungarian seismic contractor
who had already mobilised to Romania for the survey on good faith (refer to ASX announcement from 8 September 2020).
ADX has subsequently settled costs incurred with the seismic contractor and remains in discussion for a deferred survey
start. Extensions of landowner and authority permits are under negotiations and the Romanian Mining Authority NAMR
has been advised that due to unforeseen events including COVID-19 Pandemic related delays and the completely
unexpected default of Tamaska, an additional extension may be justified.
- 70 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 19 – COMMITMENTS AND CONTINGENCIES - continued
Tamaska Farmin Agreement Payment Default
As a result of default by Tamaska relation to a farmin obligation pursuant to a farmin agreement between ADX Energy
Panonia Srl, Danube and PE (“Farmin Agreement”), ADX has had to put on hold the mobilisation of the 3D exploration
seismic crew and has minimised ongoing financial exposure in relation to the 3D exploration seismic program operations
with the seismic contractor.
ADX has prepared all supporting evidence and a writ of summons with a reputed Perth-based law firm to pursue on behalf
of Danube what ADX is advised is a fair claim of damages caused by Tamaska’s default.
Iecea Mare Production License
In 2018, ADX acquired a 100% equity interest in the Iecea Mare Production license “License”. ADX has committed to pay
a 5% royalty for production from wells located within License. The current production license is valid until November 2034
and extensions are possible. The license does not carry any commitments, but an annual work-program will have to be
agreed with the Romanian government (via NAMR, the National Agency for Mineral Resources). ADX estimates the annual
cost for such activities may be approximately $50,000.
Data User Agreement –Austria
In December 2019, ADX entered into a Data User Agreement (DUA) with RAG Austria AG (RAG) for access to RAG
Exploration Data (including 3650 km2 of modern 3D seismic) in the Molasse Basin, in Upper Austria. Under the DUA, ADX
has exclusive access to 3D and 2D seismic and geological data from RAG for its exploration, production and gas storage
licenses (“AGS Licenses”) ratified on the 1st January 2021 with the Federal Ministry responsible for Mining (“BMLRT”) on
behalf of the Republic of Austria as an event subsequent to year end. ADX has agreed to pay RAG EUR 40,755 per annum
for exclusive rights to the data set covering the 450 km² AGS license areas for up to 5 years.
Upper Austria Exploration (AGS) Licenses – Austria
ADX executed concession agreements for exploration, production and gas storage in Upper Austria (Upper Austria AGS)
on the 8th of January 2021 between ADX and Federal Ministry responsible for Mining (“BMLRT”) on behalf of the Republic
of Austria. Following the execution of agreements, a payment of a EUR 330,000 was made in lieu of a bank guarantee to
cover federal exploration license fees.
The total term for the Upper Austria AGS is 16 years without any relinquishment and the first 4 year firm period
commencing 1st January 2021. ADX has entered a 2 well drilling commitment, however the minimum financial obligation
to keep the licenses in good standing is EUR 2.2 million for the first period.
Kerkouane Permit - Tunisia
ADX, via its previous wholly owned subsidiary Alpine Oil & Gas Pty Ltd (AOG), held a 100% interest and was the contractor
of the Kerkouane exploration permit offshore Tunisia. The Kerkouane permit contained the Dougga gas condensate
discovery. Discussions between AOG, ETAP and the DGE were ongoing in relation to the potential extension of Kerkouane
PSC which would provide the time required to appraise the Dougga discovery. Such a renewal was subject to the drilling
and testing of the Dougga Sud well.
In April 2019, the Company on behalf of AOG, engaged with the then highly experienced Chairman of ETAP with the view
to securing fiscal relaxation for the Dougga project. Early discussions focussed on a more collaborative basis between ADX
and ETAP with view to attracting capital for the project were promising. Regrettably the resignation of the then Chairman
of ETAP during the second quarter of 2019 resulted in the potential for further constructive discussions in relation to a
potential fiscal concession unlikely. As a result, ADX ability to securing a funding partner for Dougga was substantially
curtailed.
Previously, in October 2017, ADX on behalf of AOG secured an option to utilise the Noble Services International Limited
(Noble) Globetrotter II drilling rig to undertake the drilling and testing of the Dougga Sud – 1 appraisal well. The option
expired in June 2019 due to the extension of previous drilling options by other oil and gas operators in the Black sea and
the decision by Noble to demobilise the rig from the Mediterranean region to the Gulf of Mexico.
- 71 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 19 – COMMITMENTS AND CONTINGENCIES - continued
Given the water depth at Dougga of 330 metres it was unlikely that an alternate rig options would be available for the
foreseeable future. That being the case AOG has advised ETAP in relation to deferment of work program obligations due
to circumstances outside AOG’s control. Furthermore, AOG informed the Designated Authority that the non availability of
the drilling rig, owned by Noble, is a force majeure event. The designated Authority has in turn contested AOG’s
declaration of force majeure and was not prepared to enter into discussions on the matter with AOG local management.
As a result, ADX determined that AOG would be forced to forfeit the permit unless it contested the legal basis for forfeiture
due to force majeure with the Designated Authority. Such a legal process was subject to cost and risk in jurisdiction where
AOG was experiencing increasing difficulties in engagement with local Authorities. On that basis the Board of ADX took
the necessary steps to cease operations, to close the local office in Tunis and deregister AOG after the payment of all
outstanding liabilities in relation the Tunis office and local contractors. The deregistration process for AOG was completed
in December 2020.
Lambouka 1 Well -Tunisia
The Lambouka 1 well was abandoned in a manner that ensured isolation of subsurface hydrocarbon bearing reservoirs to
avoid the potential for leakage. The well was abandoned from a well safety, and integrity perspective fulfilling all Tunisian,
UKOAAA and also Norwegian abandonment requirements. The surface casing on the well was not cut down to the mud
line to enable the potential future re-entry to the well. The Company believes that existence of casing above the mud line
does not represent a maritime threat or a threat to fishing given the depth of approximately 700 meters. ETAP has
requested the visual inspection of the well to confirm there is no gas leakage. This work was intended to be accomplished
utilising a ROV (remote operated vehicle) deployed from a supply vessel during future well operations at an expected cost
of between US$ 50,000 to US$ 100,000. Given the forfeiture of the permit and the wind up of AOG this potential liability
is not considered likely.
(a)
Other contingencies
Id363 C.R-.AX license - Italy
ADX holds a 100% interest in the d363 C.R-.AX prospecting license which contains the Nilde Oil Re Development Project.
Subsequent to year end, ADX has completed submissions to the Italian licensing authorities (UFFICIO NAZIONALE
MINERARIO PER GLI IDROCARBURI E LE GEORISORSE or UNMIG) in order to convert the area to an exploration license.
Upon ratification of the prospecting license to an exploration license ADX will assume the commitment to purchase and
reprocess 300 Km of 2D seismic and drill one exploration well within 5 years. Upon ratification ADX intends to complete
the purchase of 2D seismic and undertake seismic reprocessing and make applications to UNMIG to drill an appraisal well
on the Nilde field in lieu of its exploration commitment.
As previously announced ADX completed a farmout with SDP Services Limited (“SDP”) where SDP can earn an interest of
50% interest in the d363 C.R-.AX Permit (License) containing the Nilde Oil Redevelopment Project by funding the work
program commitments of Audax Energy Srl (Audax) a wholly owned subsidiary of ADX up to a maximum of EUR 20.82
million. The transaction is conditional upon the Italian Licensing Authorities ratifying the License. Upon ratification of the
License SDP will receive 5% net profits royalty interest attributable to any future production from the Nilde Field. ADX will
remain operator of the license.
ADX was advised on the 4th of February 2019 that the Italian senate passed legislation to suspend exploration activities in
all permits that have been approved or are in the process of being approved for a period of up to 18 months (to
approximately August 2020) to enable the government authorities to evaluate the suitability of exploration areas for
sustainable hydrocarbon exploration and production activities. The Italian Senate has further advised that suspension will
be extended to the first quarter of 2021. Due to the COVID-19 Pandemic the suspension of exploration activities is expected
to be extended until the fourth quarter of 2021.
- 72 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 20 – KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Compensation of Key Management Personnel
Short-term employment benefits
Post-employment benefits
Share-based payment
Consolidated
31 December
31 December
2020
$
682,215
5,583
235,999
923,797
2019
$
568,567
6,270
303,376
878,213
(b) Other transactions and balances with Key Management Personnel
(i)
(ii)
(iii)
Mr Andrew Childs is the owner of Resource Recruitment. ADX Energy Ltd has an office rental agreement with
Resource Recruitment to rent office premises in Subiaco until 30 June 2020 at normal commercial rates. Rental
paid for the year (excluding GST) ended 31 December 2020 totalled $31,200 (2019: $31,200).
In the prior year, previous Director Mr Philip Haydn-Slater, through an entity controlled by Mr Haydn-Slater,
provides office premises in London at normal commercial rates to ADX’s subsidiary, Danube Petroleum
Limited. The rental is provided on a casual monthly basis. Rental paid for the year ended 31 December 2020
totalled $nil (2019: $6,432).
In the prior year, on 16 July 2019, ADX finalised Convertible Loan Facility Agreements (‘Convertible Notes’)
which were convertible to shares in ADX to raise A$1,205,000. Included in this new funding was $150,000
provided equally by ADX’s Directors Ian Tchacos, Paul Fink and previous director, Robert Brown. The key
terms for the Convertible Notes were as follows:
Loan Term: 6 months commencing 12 July 2019, extendable by mutual agreement in writing at least 15
days prior to expiry of Loan Term.
Loan Interest: 10% per annum; Payable at Termination.
Loan Conversion Rights: The lender has the option to convert part or all of the loan into ADX shares prior
to Termination. The conversion price is determined the lower of:
a. the share price used for any capital raising by issue of ADX shares during the term of the Loan
Agreement; and
b. A$0.007 per share.
On 20 September 2019, Shareholders approved the issue of the Convertible Notes to the Directors.
On 13 January 2020, each of those Directors converted their $50,000 to shares (7,142,857 shares at
$0.007/share). During the year, interest paid totalled $164.38 to Ian Tchacos, Paul Fink and Robert Brown
each (2019: $2,356, $2,356 and $2,219 respectively).
- 73 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 21 - AUDITORS' REMUNERATION
Amount paid or due and payable to the auditor for:
Auditing the financial statements, including audit review - current year audits
Other services
Total remuneration of auditors
NOTE 22 – SEGMENT INFORMATION
Consolidated
31 December
31 December
2020
$
2019
$
55,000
-
55,000
29,000
-
29,000
An operating segment is a component of an entity that engages in business activities from which it may earn revenues
and incur expenses (including revenues and expenses relating to transactions with other components of the same entity),
whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about
resources to be allocated to the segment and assess its performance and for which discrete financial information is
available. This includes start-up operations which are yet to earn revenues. Management will also consider other factors
in determining operating segments such as the existence of a line manager and the level of segment information
presented to the board of Directors.
Operating segments have been identified based on the information provided to the chief operating decision makers –
being the executive management team. The group aggregates two or more operating segments when they have similar
economic characteristics, and the segments are similar in each of the following respects:
- Nature of the work undertaken; and
- Geographic environment.
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately. However, an
operating segment that does not meet the quantitative criteria is still reported separately where information about the
segment would be useful to users of the Financial Statements.
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
Directors (the chief operating decision makers) in assessing performance and in determining the allocation of resources.
The operating segments are identified by management based on the geographical region. Discrete financial information
about each of these operating businesses is reported to the Board. The reportable segments are based on aggregated
operating segments determined by the similarity of economic environment, as these are the sources of the Group’s
major risks and have the most effect on the rates of return.
Reportable Operating Segments Identified
For management purposes, the Group has organised its operating segments into three reportable segments as follows:
Sicily Channel Offshore Exploration and Evaluation Segment: This segment includes assets and activities that are
associated with oil and gas exploration offshore Italy and Tunisia.
Romania Exploration and Appraisal/Development Segment: This segment includes assets and activities that are
associated with oil and gas exploration, appraisal and development in that region, and include the costs if the
parent entity, Danube Petroleum Limited.
Austria Production Segment: This segment includes assets and activities that are associated with oil and gas
production in that region.
- 74 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 22 – SEGMENT INFORMATION - continued
Management monitors the operating results of its business units separately for the purpose of making decisions about
resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss
and is measured consistently with operating profit or loss in the consolidated financial statements. However, the
Group’s financing (including finance income) is managed on a group basis and are not allocated to operating segments.
Accounting Policies
The accounting policies used by the Group in reporting segments internally are the same as those contained in note 1
to the accounts.
There have been no inter-segment transactions.
It is the Group’s policy that if items of revenue and expense are not allocated to operating segments then any associated
assets and liabilities are also not allocated to segments. This is to avoid asymmetrical allocations within segments which
management believe would be inconsistent.
The following items are not allocated to segments as they are not considered part of core operations of any segment
and are managed on a Group basis.
Interest revenue
Foreign currency gains/(losses)
Corporate costs
- 75 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 22 – SEGMENT INFORMATION - continued
Operating Segments
Year ended 31 December 2020
Revenue and income
Total segment revenue
Result
Segment result
Reconciliation of segment profit after tax to net profit
after tax:
Unallocated revenue and income
Foreign currency gains/(losses)
Unallocated expenditure
Net profit/(loss) after tax
Assets
Segment assets
Reconciliation of segment assets:
Unallocated cash
Other
Total assets
Liabilities
Segment liabilities
Reconciliation of segment liabilities:
Unallocated liabilities
Total liabilities
Sicily
Channel
$
Romania
$
Austria
(Production)
Total
Operations
$
$
-
-
6,833,016
6,833,016
6,833,016
(52,373)
(458,138)
(2,976,509)
(3,487,020)
26,148
(16,680)
(1,009,124)
(4,486,676)
(3,336,223)
9,611,753
14,870,055
21,145,585
1,561,591
8,089,297
30,796,473
(18,634)
(301,323)
(17,932,779)
(18,252,736)
(3,850,841)
(22,103,577)
Capital expenditure
Segment capital expenditure – oil and gas assets
Reconciliation of capital expenditure:
Unallocated additions
Total capital expenditure
-
7,747,515
16,690,172
24,437,687
-
24,437,687
- 76 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 22 – SEGMENT INFORMATION - continued
Operating Segments
Year ended 31 December 2019
Revenue and income
Total segment revenue
Result
Segment result
Reconciliation of segment profit after tax to net profit
after tax:
Unallocated revenue and income
Foreign currency gains/(losses)
Unallocated expenditure
Net profit/(loss) after tax
Assets
Segment assets
Reconciliation of segment assets:
Unallocated cash
Other
Total assets
Liabilities
Segment liabilities
Reconciliation of segment liabilities:
Unallocated liabilities
Total liabilities
Sicily
Channel
$
Romania
$
Austria
(Production)
Total
Operations
$
$
-
-
1,114,613
1,114,613
1,114,613
(209,248)
(180,987)
140,108
(250,127)
17,209
508,352
(1,362,342)
(1,086,908)
15,167
9,743,253
20,861,329
30,619,749
1,384,584
98,345
32,102,678
(275,698)
(173,922)
(16,250,618)
(16,700,238)
(4,882,474)
(21,582,712)
Capital expenditure
Segment capital expenditure – oil and gas assets
Reconciliation of capital expenditure:
Unallocated additions
Total capital expenditure
-
5,372,435
17,633,809
23,006,244
-
23,006,244
- 77 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 23 – FINANCIAL RISK MANAGEMENT
The Group is exposed to market risk (commodity, currency and interest rate risks), credit risk and liquidity risk. The Group’s
overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the financial performance of the Group. The Group uses different methods to measure different types
of risk to which it is exposed. ADX’s Board of Directors (‘Board’) is responsible for approving ADX’s policies on risk oversight
and management and ensuring management has developed and implemented effective risk management and internal
controls. Risk management is carried out by the senior executives under these policies which have been approved by the
Board. Management identifies, evaluates and, if necessary, hedges financial risks.
Commodity price risk
During the year the Group continued generating revenue from its Zistersdorf and Gaiselberg fields in Austria. With this oil
and gas production and sales, the group is exposed to the Brent Benchmark crude oil price and European gas price
fluctuations. Exposure to oil and gas price risk is measured by monitoring the Group’s forecast financial position and cash
flows with various assumptions. This analysis is regularly performed. Commodity prices’ hedging may be undertaken where
the Board of Directors determines that a hedging strategy is appropriate to mitigate potential periods of adverse
movements in commodity prices and protect forward cash flows to meet commitments. This will be balanced against the
desire to expose shareholders to oil price upside and the reliability of production forecasts.
In total, ADX’s subsidiary, ADX VIE GmbH, has fixed price swaps in place for the period between 1 January 2021 and 30
April 2021 representing approximately 80% of its forecast proven (1P) production and fixed price swaps in place for the
period between 1 May 2021 and 30 June 2021 representing circa 40% of its forecast proven (1P) production. Refer to note
17 for further information on derivatives.
Fixed Price Swaps
Barrels of Oil
(BBL)
Fixed Price
USD per BBL
January 2021 to April 2021
January 2021 to June 2021
12,216
17,925
USD 41.77
USD 44.34
The hedging program is designed to provide certainty of cash flows during a period of expected ongoing volatility.
Currency risk
The Group’s source currency for the majority of costs is in EUR. Operating revenue is invoiced in EUR but is indexed to
Dated Brent price (USD). Currency risk arises where the value of a financial instrument or monetary item fluctuates due
to changes in foreign currency exchange rates. The exposure to currency risk is measured using sensitivity analysis and
cash flow forecasting.
The Board has formed the view that in the ordinary course of business it would not be beneficial for the Group to purchase
forward contracts or other derivative financial instruments to hedge any currency risk. Currency risk for operating revenue
is hedged via hedging of the commodity as necessary (see section ‘Commodity price risk’).
During the year the company undertook capital raising activities via the issue of new shares on the ASX. These capital
raisings are priced and received in AUD. Over the time period of a capital raising there is some short-term exposure to
movements in the AUD to EUR exchange rates as part of the funds are used in Europe. At 31 December 2020, management
has assessed that the entity’s exposure to foreign exchange movements is immaterial due to revenues and costs primarily
in EUR and therefore no further analysis is provided. The Group manages its foreign exchange risk by constantly reviewing
its exposure to commitments payable in foreign currency and ensuring appropriate cash balances are maintained in EUR
and AUD, to meet current operational commitments.
- 78 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 23 – FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES - continued
Interest rate risk
At balance date the Group’s exposure to market risk for changes in interest rates relates primarily to the Company’s
borrowings. The Group constantly analyses its exposure to interest rates, with consideration given to potential renewal of
existing positions, the mix of fixed and variable interest rates and the period to which deposits may be fixed.
Given the very low interest rates for variable borrowings, the interest rate risk is considered immaterial.
Borrowings – fixed rate
Borrowings - variable
Borrowings – variable (currently non-interest bearing)
Total
Liquidity risk
31 December 2020
$
31 December 2019
$
3,527,654
525,014
795,475
4,848,143
4,600,000
-
-
4,600,000
Liquidity risk is the risk that Group will encounter difficulty in meeting obligations associated with financial liabilities that
are settled by delivering cash or another financial asset. The Group manages liquidity risk by continuously monitoring
forecast and actual cash flows with scenario analysis. As at reporting date the Group had sufficient cash reserves to meet
its current requirements.
The contractual maturity analysis of payables as at year end are:
31 December 2020
Trade and other payables
Current tax liabilities
Borrowings
Total
31 December 2019
Trade and other payables
Current tax liabilities
Borrowings
Total
Total
$
Less than 1
Year
$
Between 1-5
Years
$
1,948,686
-
4,848,143
1,948,686
-
902,654
-
-
3,945,489
6,796,829
2,851,340
3,945,489
2,182,032
64,339
4,600,000
2,182,032
64,339
2,850,000
-
-
1,750,000
6,846,371
5,096,371
1,750,000
- 79 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 23 – FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES - continued
Credit risk
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the
Group. The Group has adopted the policy of dealing with creditworthy counterparties and obtaining sufficient collateral or
other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group measures
credit risk on a fair value basis.
Significant cash deposits are with institutions with a minimum credit rating of AA (or equivalent) as determined by a
reputable credit rating agency e.g. Standard & Poor.
The Group has only one customer for operating revenue being a significant company in Austria. Revenue is received
monthly and hence the credit risk deemed very low.
The Group does not have any other significant credit risk exposure to a single counterparty or any group of counterparties
having similar characteristics.
NOTE 24 - SUBSEQUENT EVENTS
Concession Agreements
On 11 January 2021, ADX announced that it had executed concession agreements with the Federal Ministry responsible
for Mining (“BMLRT”) on behalf of the Republic of Austria which ratified the exploration, production and gas storage
concession agreements (“AGS”) negotiated earlier in the year with the responsible BMLRT for Upper Austria. The total
term for the Upper Austria AGS is 16 years without any relinquishment and the first 4 year firm period commencing 1st
January 2021. ADX has entered a 2 well drilling commitment, however the minimum financial obligation to keep the
licenses in good standing is EUR 2.2 million for the first period.
Hydrogen Storage
On 20 January 2021, ADX announced that it had entered an agreement with Horváth & Partners (Horváth) to undertake a
pre-feasibility assessment for hydrogen (H2) storage at ADX’s Gaiselberg and Zistersdorf fields in the Vienna Basin as well as
the creation of a profitable hydrogen business model which will be complimentary and synergistic with ADX’s current oil and
gas energy business (Hydrogen Study). The Hydrogen Study is expected to be undertaken in two phases. The first is to
establish the feasibility of the Fields for hydrogen storage and or green gas production, establish a joint venture partnership
with renewable energy producers proximal to the fields and determine the availability of feasibility project funding. The
second phase will be to establish a detailed business and finance plan for a future project.
Share Purchase Plan Closed Over Subscribed
On 3 February 2021, ADX announced its Share Purchase Plan (SPP), which closed on Friday, 29 January 2021, was significantly
oversubscribed, with the Company receiving applications totalling approximately A$3.6 million, well in excess of the targeted
amount of A$1 million. The Company scaled-back applications to a total of $3 million. Under the SPP, each Eligible
Shareholder was entitled to subscribe for up to A$30,000 of new fully paid ordinary shares in the Company at the issue price
of A$0.006 per share, subject to scale back. The SPP formed part of the capital raising as announced on 15 December 2020,
which also comprised a Placement to institutional and sophisticated investors raising A$1.3 million at A$0.006 per share.
In addition, one (1) free attaching unlisted option was issued for every two (2) shares issued under the SPP (“SPP Options”).
The exercise price of the SPP Options is A$0.008 with an expiry date of 15 June 2021.
- 80 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 24 - SUBSEQUENT EVENTS - continued
Loan Note Options
On 19 February 2021, 135,000,005 unlisted options with an exercise price of $0.018, expiring 26/11/2021 were cancelled.
The Company was granted a waiver of ASX Listing Rule 6.23.3 to permit the Company to cancel the existing 135,000,005
options issued to Loan Note Holders (as approved by Shareholders on 6 December 2019) and issue 135,000,040 new,
replacement options (as approved by Shareholders on 19 February 2021).
Exercise of Unlisted Options
The following unlisted options have been exercised at $0.008/share since year end:
- On 25 February 2021, 21,653,334 unlisted options (raising $173,227); and
- On 22 March 2021, 7,210,470 unlisted options (raising $57,684).
COVID-19
The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the potential future
impact after the reporting date. The situation is rapidly developing and is dependent on measures imposed by the
governments, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic
stimulus that may be provided.
There are no other matters or circumstances that have arisen since 31 December 2020 that have or may significantly affect
the operations, results, or state of affairs of the Group in future years.
- 81 -
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ADX ENERGY LTD
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of ADX Energy Ltd (“the Company”) and its controlled entities (“the
Group”) which comprises the consolidated statement of financial position as at 31 December 2020, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended on that date and
notes to the financial statements, including a summary of significant accounting policies and the directors’
declaration of the Company.
In our opinion the financial report of the Group is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 31 December 2020 and of its
financial performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under these
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report
section of this report. We are independent of the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and
Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (Including Independence
Standards) (the “Code”) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given
to the directors of the Company, would be in the same terms if given to the directors as at the time of this
auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ADX ENERGY LTD (continued)
Key Audit Matter – Revenue
How our Audit Addressed the Key Audit Matter
The Group started generating significant revenue of
$6,833,016
year
predominantly from the sale of gas and oil in Austria.
financial
current
the
in
We do not consider revenue to be at a high risk of
significant misstatement, however due to the
materiality in the context of the financial statements
as a whole and being the first year of significant
proceeds from sales, this is considered to be an area
which had an effect on our overall strategy and
allocation of resources in planning and completing
our audit.
Our procedures over the existence of the Group’s
revenue included but were not limited to:
• Documenting and assessing the processes and
revenue
in place
record
to
controls
transactions; and
• Testing a sample of revenue transactions and
receipts to determine they were recorded
correctly.
We have also assessed the appropriateness of the
disclosures included in the financial report.
Key Audit Matter – Borrowings
How our Audit Addressed the Key Audit Matter
The Group recorded a significant amount of
borrowings during the year.
We do not consider borrowings to be at a high risk of
significant misstatement, or to be subject to a
significant level of judgement. However due to the
materiality in the context of the financial statements
as a whole, this is considered to be an area which had
an effect on our overall strategy and allocation of
resources in planning and completing our audit.
Our procedures over the audit of the borrowing
balances included but were not limited to the
following:
• We assessed the reasonable accuracy of the
interest calculation on the amounts borrowed;
• We reviewed
loan agreements
for any
securities over
potential covenants or
borrowed funds; and
• We reviewed the accuracy of allocation
between current and non-current portions of
the borrowings.
We have also assessed the appropriateness of the
disclosures included in the financial report.
Key Audit Matter – Share-based Payments
How our Audit Addressed the Key Audit Matter
The Group recorded a significant number of share-
based payments in the current year.
We do not consider share-based payments to be at a
high risk of significant misstatement, or to be subject
to a significant level of judgement. However due to
the materiality in the context of the financial
statements as a whole, this is considered to be an
area which had an effect on our overall strategy and
allocation of resources in planning and completing
our audit.
Our procedures over the audit of share-based
payments included but were not limited to the
following:
• We reconciled share-based payment balances
to equity and reserve balances;
• We reviewed the valuation of the share-based
payments; and
• We reviewed the compliance of accounting
treatment of the share-based payments with
AASB 2 Share-based Payment.
We have also assessed the appropriateness of the
disclosures included in the financial report.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ADX ENERGY LTD (continued)
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 31 December 2020, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Directors’ Responsibility for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with the Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibility for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at: www.auasb.gov.au/Home.aspx.
We communicate with the directors regarding, amongst other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ADX ENERGY LTD (continued)
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe those matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communications.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the remuneration report included in the directors’ report for the year ended 31 December
2020.
In our opinion the remuneration report of ADX Energy Ltd for the year ended 31 December 2020 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Rothsay Auditing
Dated 31 March 2021
Daniel Dalla
Partner
ADX ENERGY LTD
ADDITIONAL SHAREHOLDER INFORMATION
Information as at 26 March 2021
a)
Substantial Shareholders (who have lodged notices with ADX Energy Ltd)
Name
Jetosea Pty Ltd
Number of Shares Disclosed in
Substantial Holder Notice
166,676,404
b)
Shareholder Distribution Schedule
Size of Holding
1 -
1,001 -
5,001 -
10,001 -
1,000
5,000
10,000
100,000
and over
100,001
Number of
Shareholders
173
471
374
1,057
Number of
Ordinary Shares
82,859
1,492,183
3,052,260
50,187,929
1,104
2,439,196,241
Percentage of
Issued Capital
0.003
0.060
0.122
2.012
97.803
Total Shareholders
Number of shareholders holding less
than a marketable parcel
3,179
1,562
Voting Rights
2,494,011,472
100
Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at meetings of
Shareholders or classes of Shareholders:
(i)
each Shareholder entitled to vote may vote in person or by proxy or attorney, Representative;
(ii)
on a show of hands, every person present who is a Shareholder or a proxy, attorney or Representative of a
Shareholder has one vote; and
(iii) on a poll every member entitled to vote and present in person or by proxy or attorney or representative duly
authorised shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy,
attorney or Representative, have one vote for the Share, but in respect of partly paid Shares, shall have such
number of votes being equivalent to the proportion which the amount paid (not credited) is of the total amounts
paid and payable in respect of those Shares (excluding amounts credited).
There are no voting rights for Optionholders.
c)
Securities Subject to Escrow:
4,162,409 ordinary shares are subject to voluntary escrow until 26 June 2021.
- 86 -
ADX ENERGY LTD
ADDITIONAL SHAREHOLDER INFORMATION
d)
Twenty largest shareholders:
Name
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
JETOSEA PTY LTD
GILLARD SUPERANNUATION PTY LIMITED
1.
2.
3.
4. MR PAUL FINK
5. WINDMERE INTERNATIONAL LIMITED
6.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
7. MR BRIAN THOMAS CLAYTON + MRS JANET CLAYTON
IRONSIDE PTY LTD
8.
9. WARROORAH PTY LTD
10.
11.
12.
13.
14.
15. MRS AMANDA GRACE SPARKS
16.
17. MR PETER LIGONIS
18. MS SIHOL MARITO GULTOM
ANDREW DUNCAN MURDOCH
COMSEC NOMINEES PTY LIMITED
BRAZELL PTY LTD
KENLOW (1982) PTY LTD
BOND STREET CUSTODIANS LIMITED
CITICORP NOMINEES PTY LIMITED
19.
20.
MR ALAN GEORGE BROOKS + MRS PHILIPPA CLAIRE BROOKS
MR TIMOTHY FRANCIS CLIVE MCDONNELL + MRS MILA MCDONNELL
Remaining Holders Balance
Shares on issue
e) Unlisted Options (Holders of more than 20%):
Number of
Ordinary
Shares
205,532,852
161,676,404
100,000,000
72,831,971
54,749,090
37,847,774
33,333,333
31,805,042
25,164,160
25,005,000
24,841,793
23,839,500
23,250,000
21,983,688
21,134,249
21,007,763
20,105,522
20,000,000
19,500,000
18,888,888
% of
Issued
Capital
8.24
6.48
4.01
2.92
2.20
1.52
1.34
1.27
1.01
1.00
1.00
0.95
0.93
0.88
0.85
0.84
0.81
0.80
0.78
0.76
962,497,029
38.59
1,531,514,443
2,494,011,472
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Total Options
Number
345,495,007
5,000,000
67,500,020
67,500,020
6,354,086
10,864,955
3,954,545
4,106,250
12,578,571
9,451,563
8,470,981
9,882,811
551,158,809
Exercise Price
0.8 cents
1.3 cents
1.0 cents
1.5 cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Expiry Date
15/06/2021
26/06/2021
26/05/2022
26/11/2023
31/05/2022
31/05/2023
31/10/2023
31/01/2024
26/06/2024
31/07/2024
31/10/2024
31/01/2025
Holders of >20%
No holders > 20%
Mr Edouard Etienvre (100%)
(i)
(i)
Eonia Pty Ltd (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
(ii)
(iii)
(iv)
(v)
- 87 -
ADX ENERGY LTD
ADDITIONAL SHAREHOLDER INFORMATION
(i) Holders of more than 20%
Name
Jetosea Pty Ltd
Others (each holding less than 20%)
Unlisted options expiring 26/5/2022
#
57,857,160
9,642,860
67,500,020
#
Name
57,857,160
Jetosea Pty Ltd
9,642,860
Others (each holding less than 20%)
Unlisted options expiring 26/11/2023 67,500,020
%
85.71
14.29
100
%
85.71
14.29
100
(ii) Holders of more than 20%
Name
Directors:
Paul Fink
Ian Tchacos
Unlisted options expiring 26/6/24
#
%
6,578,571
6,000,000
12,578,571
52.3
47.7
100
(iii) Holders of more than 20%
Name
Directors:
Paul Fink
Ian Tchacos
Unlisted options expiring 31/7/24
#
%
3,373,438
6,078,125
9,451,563
35.69
64.31
100
(i) Holders of more than 20%
Name
Directors:
Paul Fink
Ian Tchacos
Unlisted options expiring 31/10/24
#
%
3,354,910
5,116,071
8,470,981
39.6
60.4
100
(iv) Holders of more than 20%
Name
Directors:
Paul Fink
Ian Tchacos
Unlisted options expiring 31/1/25
#
%
2,632,811
7,250,000
9,882,811
26.64
73.36
100
- 88 -
ADX ENERGY LTD
TENEMENT SCHEDULE
Oil AND GAS ASSETS
Europe and North Africa
Project
Onshore Austria
ADX Group
Interest (%)
100%
Operator
ADX
Permit
and
Zistersdorf
Gaiselberg
Production
License Note 1
Upper Austria AGS Licenses Note 1
Upper
AGS
Austria
100%
ADX
Onshore Romania – Parta Note 2
EX-10 PARTA
Onshore Romania – Iecea Mare Production Licence
Note 2
Iecea Mare
100%
100%
ADX
ADX
Offshore Italy, Nilde – awarded application Note 3
d363 C.R.-.AX
100%
ADX
Note 1: Concession agreements for exploration, production and gas storage in Upper Austria (Upper Austria AGS)
were signed on the 8th of January 2021 between ADX and Federal Ministry responsible for Mining (“BMLRT”) on
behalf of the Republic of Austria.
Note 2: ADX holds a 49.2% shareholding in Danube Petroleum Limited (Danube). The remaining shareholding in
Danube is held by Reabold Resources Plc. Danube via ADX Energy Panonia Srl holds a 100% interest in the Parta
Exploration license (including a 100% interest in the Parta Appraisal Sole Risk Project) and a 100% interest in the
Iecea Mare Production license. ADX is the operator of the permit pursuant to a Services Agreement with Danube.
Note 3: ADX has commenced a process with the Italian Designated Authority to convert the exclusively awarded
application to a ratified licence. This process was commenced after the award by the Ministry of Industry.
- 89 -