ADX Energy Ltd
ABN 50 009 058 646
ANNUAL REPORT
31 DECEMBER 2022
ADX ENERGY LTD
CONTENTS
Contents
Page
Corporate Directory………………………………………………………………………………………………………… 2
Chairman’s Report………………………………………………………………………………………………………….. 3
Operations Report…………………………………………………………………………………………………………… 8
Reserves Report……………………………………………………………………………………………………………… 26
Directors’ Report……………………………………………………………………………………………………………… 30
Auditors’ Independence Declaration to the Directors…………………………………………………… 43
Directors’ Declaration……………………………………………………………………………………………………… 44
Consolidated Statement of Profit or Loss and Other Comprehensive Income………………….. 45
Consolidated Statement of Financial Position………………………………………………………………….. 46
Consolidated Statement of Changes in Equity…………………………………………………………………. 47
Consolidated Statement of Cash Flows……………………………………………………………………………. 48
Notes to the Financial Statements…………………………………………………………………………………… 49
Independent Auditor’s Report…………………………………………………………………………………………. 88
Additional Shareholder Information………………………………………………………………………………… 93
Tenement Schedule…………………………………………………………………………………………………………. 96
- 1 -
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
29 Bay Road
Claremont, Western Australia 6010
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, The Read Buildings
16 Milligan Street
Perth Western Australia 6000
Bankers
Commonwealth Bank of Australia
1254 Hay Street
West Perth Western Australia 6005
Stock Exchange Listing
Australian Securities Exchange Ltd
2 The Esplanade
Perth Western Australia 6000
ASX Code: ADX
Auditors
Rothsay Audit & Assurance Pty Ltd
Level 1, Lincoln Building
4 Ventnor Avenue
West Perth Western Australia 6005
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ADX ENERGY LTD
CHAIRMAN’S REPORT
Dear Shareholder,
During the year ended 31 December 2022, ADX Energy Ltd (ADX or the Company) has created a pathway to advance its
goal of becoming a leading energy producer and explorer in Europe. Your Company has achieved a combination of a
significant oil discovery, increasing cashflow, multiples of certified reserves growth, exploration portfolio development and
new funding partnerships that have strengthened its financial position and enhanced its energy asset position in Austria.
We are on a trajectory of establishing strong underlying value development through increasing production, reserves and
cash flow as well as exposing our Shareholders to exceptional value generation opportunities via an active exploration
program funded via farmout transactions. These significant developments place your Company in a favourable position to
advance our renewable energy projects for energy transition which are highly compatible with ADX skills and asset position.
We continued to produce low greenhouse gas emission energy to the highest environmental standards at our Austrian
Gaiselberg and Zistersdorf fields in the Vienna Basin (Vienna Basin Fields) and commenced the development of the Anshof
discovery in Upper Austria (Anshof Field). The Vienna Basin Fields, together with the now producing Anshof Field and our
extensive exploration opportunities adjacent to accessible infrastructure in Upper Austria, are expected to provide the
near-term cash flow required to expand ADX’s hydrocarbon and renewable energy production opportunities.
The safety of our people and our contractors, as well as the protection of the environment in the communities in which
we work is of paramount importance. On behalf of Board of ADX, I am proud to report that no lost time incidents (LTI)
were recorded during the reporting period for safety or environmental causes at ADX’s Vienna basin oil and gas fields or
at our Upper Austria exploration licenses where we have successfully executed in an exceptional timeframe the pathway
from exploration to production.
Figure 1 below summarises key milestones achieved during calendar year 2022 for the Austrian business which your Board
believes has positioned the Company for an active and transformative year in 2023. Our growth is underpinned by
increasing financial capacity and proven operational capability. In conjunction with its oil and gas activities, ADX has
continued its feasibility studies in relation to synergistic, renewable energy projects that your Board believes will add long
term value to our existing energy asset base.
Figure 1: Key activities and milestones in Austria during Calendar Year 2022
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ADX ENERGY LTD
CHAIRMAN’S REPORT
The consequences of your Company’s recent achievements are summarised as follows;
•
•
•
•
•
The Anshof Discovery has provided a new oil project development in Austria which is already delivering a 30% plus
increase to ADX’ production, an increase in the 2P reserves base of approximately 223% (based on an independent
reserves review, ASX release dated 31 October 2022) and has the potential to deliver further multiples of cashflow as
well as reserves upside with the two appraisal and development wells planned for the second half of 2023.
The Upper Austria license extension has provided a substantial expansion of ADX’ exploration prospect inventory
including a multi energy oil, gas and geothermal opportunity as well as the World-class Welchau gas prospect which
ADX is planning to commence drilling during the third quarter of 2023.
The Welchau gas prospect farmout to the TSXV listed MCF Energy Ltd has provided funding certainty for 50% of the cost
of drilling the Welchau-1 well while ADX will retain an 80% economic interest.
The Vienna Basin solar project feasibility study which is being conducted with the highly reputable RWA Solar Solutions
has the potential to provide off grid power for ADX’ Vienna basin oil and gas production which could result in reduced
operating costs, contribute to the decarbonisation of our operations and provide surplus green power which could be
utilised for green hydrogen generation.
The final payment of the Loan Note for an amount of A$ 2,187,500 (which was the remaining sum outstanding under a
facility drawn to fund the Vienna Basin Fields acquisition) was achieved by utilising increasing cash flow from operations
which can now be dedicated to the further growth of the business.
A comparison of oil and gas pricing, oil and gas production, sales revenue and reserves between calendar years 2021 and
2022 is shown below in Figure 2. While production was lower in 2022 compared to 2021 due to increased well down time at
the Vienna Basin Fields, the strengthening of oil and gas prices during 2022 has resulted in a 59% increase in revenues from
Vienna Basin Fields together with the contribution from the Anshof-3 well in the fourth quarter following the
commencement of long-term test production. The Anshof-3 well is expected to make a more significant contribution to cash
flow during 2023 due to strong production performance which is expected to increase with the addition of further onsite
storage. Of significant importance for the ongoing cashflow and value growth is the large addition to reserves (2P) of 223%
from the recently discovered Anshof Field.
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ADX ENERGY LTD
CHAIRMAN’S REPORT
Figure 2: Comparison of product price, production, sales revenues and reserves by calendar year
ADX’ strengthening financial position is shown in Figure 3. Increasing revenues from operations, together with farmouts and
financing (totalling A$ 11.3 million) has enabled ADX to deploy a substantial level of funding on wells, facilities and
exploration expenditures (totalling A$ 7.8 million) and retiring debt (A$ 3.3 million). The combination of a robust cash
position at year end (A$ 3.6 million) with minimal debt, strong predicted cashflows from operations and farmout funding
puts the Company in a strong financial position to further develop and expand its asset and cash flow position in 2023.
Figure 3: ADX Group cash inflows and outflows during calendar year 2022
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ADX ENERGY LTD
CHAIRMAN’S REPORT
Our oil and gas production, development and exploration activities in Austria have remained our primary focus at a time
when the development of domestic energy sources are critical to ensure energy security for European countries such as
Austria. In addition to the expansion of ADX’ hydrocarbon business, ADX has continued to progress studies with a view to
determining the feasibility of complimentary renewable energy projects including the Vienna Basin hydrogen production
and storage project, a potential solar park at its Vienna Basin Fields as well as the Gmunden Multi-Energy project (consisting
of oil and gas exploration as well as a geothermal target) in Upper Austria.
Looking forward, your Company’s investment strategy is being shaped by the recent events in Europe which are redefining
energy markets. Declining domestic gas production and the disruption of gas supplies from Russia have had a marked effect
on gas prices and has resulted in significant structural changes to the European gas market. Gas prices received by ADX
during 2022 averaged approximately EUR 126 per MWh (equivalent to USD 330 per boe). This compares with an average gas
price received in 2021 of EUR 36 per MWh (equivalent to USD 94 per boe). A summary of the “European Gas Market” trends
during 2022 is included in the Operations Review that follows.
While extremely high gas prices are unlikely to be sustainable in the long term, it is likely that gas prices will remain elevated
for the foreseeable future as a result of the strong unmet demand for gas and its role as a transition fuel in Europe. ADX is
very well placed with its exploration portfolio in Upper Austria to supply domestic gas or supply gas to surrounding
jurisdictions such as Germany. As a response to the exceptional demand for gas, we are prioritising gas exploration with the
maturation of high impact prospects such as the giant Welchau gas prospect as well as more modest, lower risk gas prospects
which can be developed rapidly due to their proximity to infrastructure. The focus on gas exploration, in conjunction with
the development of Anshof, provides an excellent balance of commodity diversity and project risk.
ADX has been able to rapidly expand its asset base in Austria creating three pillars for value growth including hydrocarbon
production, exploration and development of its complimentary renewable energy assets. Having drilled the Anshof discovery
well within one year of the Upper Austria acreage award and commencing production within a year of discovery
demonstrates the ability to rapidly commercialise energy projects in Austria due to an established licensing regime, excellent
prospectivity and access to infrastructure.
Your Company is well placed to continue to build its opportunity rich conventional oil and gas business in Austria as well as
its green energy business by leveraging the skills and relationships of our strong local management team. We can now deploy
our increasing financial capacity and capitalise on the strong fundamentals for energy in Europe.
Our investment focus during the coming year will continue to be on Austria, based on activities which provide the best
opportunity for generation of shareholder value in the current energy market environment. These activities include:
•
•
•
•
The continued long life, safe and efficient production from ADX’ Vienna Basin Fields to provide stable ongoing cash
flow required for the ongoing development of the Company’s asset base;
The rapid development of the Anshof Field in Upper Austria by the drilling of the Anshof-2 and Anshof-1 wells with a
view to substantially increasing production, cashflow and certified reserves for the Company;
The drilling of the Welchau gas prospect to expose the Company to a potentially transformative World-class gas
resource in the heart of Europe, where strong gas demand, combined with high gas prices, are expected to prevail;
The drilling of an additional gas exploration prospect in Upper Austria which, if successful, can be rapidly developed
to further contribute to near term cashflow and reserves growth;
• Ongoing portfolio development and farmout transactions to secure funds for the acceleration of drilling activity
•
without the requirement to raise funds from the issue of further equity; and
Progressing the feasibility of ADX’ portfolio of synergistic, renewable energy projects with a view to reaching a financial
investment decision on the most technically and economically viable project.
Your Board believes that achieving our stated goals for 2023 will result in the rapid transformation of your Company towards
becoming a material European onshore energy producer and renewable green energy project developer. We are fortunate
to be operating in an energy landscape which is hungry for conventional energy in the near term and seeking to transition
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ADX ENERGY LTD
CHAIRMAN’S REPORT
to a low carbon economy. ADX has the opportunity to achieve material near term growth from its portfolio of conventional
energy projects and upcycle its assets with compatible renewable energy projects. The combination of conventional energy
and renewable energy investment is expected to provide ongoing value development for shareholders while ensuring
availability of reliable energy as well as a transition to a low carbon future for the communities in which we operate.
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 during what should be a very exciting year in 2023.
IAN TCHACOS
Executive Chairman
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ADX ENERGY LTD
OPERATIONS REPORT
OPERATIONS REVIEW
Activities Overview
During the year ended 31 December 2022, ADX continued its production of safe, long life and low emissions oil and gas from
its Vienna Basin Fields, commenced long-term test production from the Anshof discovery made in January 2022, expanded
its exploration portfolio in Upper Austria and has continued to pursue the feasibility of complimentary long-term renewable
energy projects.
The discovery and long-term production testing of the Anshof-3 well in Upper Austria is a significant expansion of ADX oil
and gas operations. An independent reserves review undertaken in October 2022 provided an assessment of the significance
of the Anshof Field in terms of reserves and economic potential. After the reporting date, in March 2023, ADX was awarded
a production license for the Anshof Field from the Austrian Government. The production license provides the necessary
certainty for the development of the field commencing with the drilling of the Anshof-2 and Anshof-1 development wells
during the second half of 2023. The Anshof-2 and Anshof-1 wells, in combination with the already producing Anshof-3 well,
are expected to rapidly increase ADX’ production and cashflow from operations in Austria.
During the reporting period, European natural gas prices remained volatile reaching extraordinarily high levels during August
2022. The lack of domestic supply alternatives and the increased cost of liquefied natural gas (LNG) imports are likely to
result in strong European gas pricing for years to come. As a result of the positive outlook for European gas, ADX has
concentrated its efforts on increasing gas production from its Vienna Basin Fields as well as bringing forward its Upper
Austrian gas prospect inventory for drilling. On 16 May 2022, and subsequently updated on 20 June 2022, ADX announced
the potential of the Welchau gas prospect with a best technical resources estimate of 807 billion cubic feet of gas equivalent
(BCFE). The Welchau prospect is relatively shallow (approximately 1120 metres total vertical depth to top gas reservoir) and
located close to the national gas pipeline grid infrastructure. Welchau is proximal to the Molln-1 well which tested pipeline
quality gas in 1989 at a time of limited gas markets and infrastructure when then Austria’s state-owned company OMV was
targeting the proven deep oil potential at a depth below 5000 metres. The resource size and location in the heart of Europe
makes Welchau a very compelling investment proposition, which has attracted the interest of Canadian TSX Venture
Exchange listed MCF Energy Ltd (MCF). MCF will fund 50% of the drilling of the Welchau-1 well to earn a 20% economic
interest in the Welchau Area.
In addition to the expansion of ADX’ hydrocarbon business, ADX has continued feasibility work to assess the viability of
complimentary renewable energy projects including the Vienna Basin hydrogen production and storage project, a potential
solar park at its Vienna Basin Fields as well as a potential geothermal and conventional exploration project (Gmunden Multi
Energy Project) in Upper Austria. The Vienna basin hydrogen production and storage project, and the proposed solar park at
the Vienna Basin Fields, are excellent examples of synergistic renewable energy projects that potentially compliment, extend
the economic life and add value to an existing hydrocarbon producing asset. In the longer term, ADX has positioned itself to
redeploy its assets, people and skills for transition to low carbon energy production which not only reduces ADX’ hydrocarbon
footprint but also adds value to its asset base.
European gas markets
As mentioned above, European gas markets are expected to have a significant impact on ADX and its investment strategy
for the foreseeable future. With more than 80% of its gas consumption being imported and declining domestic production,
Europe is highly dependent on external gas supply sources. Over the past two decades, Europe increasingly relied on gas
deliveries from Russia to meet its requirements with Russian gas supplies representing 35% of Europe’s demand in 2019-
2021 (average) as opposed to 25% of Europe’s demand in 2001.
After gradually reducing its piped gas exports to Europe and gas injection into its storage in Europe from April 2021,
Gazprom created an artificially tight gas supply environment in Europe. The invasion of Ukraine by Russia on 24 February
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ADX ENERGY LTD
OPERATIONS REPORT
2022 worsened the European gas market conditions further at a time when gas inventories were low at 30% of storage
capacity which is close to five-year average lows. This together with:
gas storage regulation adopted by the European Union (EU) in June 2022 to reach 80% of storage capacity by 1
November 2022 and 90% of storage capacity by the 1 November of each subsequent year;
Russian piped gas supply interruptions from May 2022 (Yamal-Europe pipeline) and end of August 2022 (Nord Stream
pipeline system); and
LNG supply disruptions with the fire at the Freeport LNG terminal in the USA which represents 15-20% of the USA’s
LNG export capacity,
resulted in strong European gas price increases at Europe’s largest trading hub, the Dutch Title Transfer Facility (TTF) with
gas prices averaging EUR 236 per MWh (equivalent to USD 617 per boe) in August 2022 after reaching an all-time high at
EUR 345 MWh (USD 902 per boe) on 7 March 2022.
Figure 4: TTF natural gas prices and EU gas inventories in 2022 (monthly averages)
Energy security concerns ahead of the heating season caused swift reactions from the EU and its member states including:
the European Commission issuing the REPowerEU plan on 18 May 2022 seeking to phase out Russian fossil fuels before
2030. For reference, in 2020, Russian gas imports represented 39% of the EU natural gas consumption;
the EU member states agreeing on 26 July 2022 to a 15% voluntary reduction of gas consumption for the period from
1 August 2022 to 31 March 2023 to prevent gas shortages during the 2022/2023 winter; and
the expansion of LNG regasification capacity including the deployment of floating storage regasification units (FSRU)
leading to a 15% increase in LNG regasification capacity by end of 2022.
In light of these events and decisions, significant structural changes to the European gas market took place in 2022 as
follows:
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ADX ENERGY LTD
OPERATIONS REPORT
80% reduction in Russian piped gas deliveries since September 2022;
unprecedented LNG imports mainly sourced from the spot market. Europe managed to secure 66 billion cubic metres
of LNG in 2022 mainly from the USA (65% of total LNG supplies to Europe in 2022); and
increased piped gas flows from Norway and Azerbaijan.
The combination of high gas inventories (95.6% of storage capacity achieved on 13 November 2022), mild weather
conditions in October and November 2022 which delayed the heating season by over one month and reduced industrial
consumption (down 20% mainly due to high prices) mitigated the impact of Russian piped gas supply cuts in the second
half of 2022. Despite the former, TTF gas prices remained elevated averaging EUR 124 per MWh (USD 325 per boe) in Q4
2022.
As at the end of December 2022, gas inventories in Europe were 20% above the five-year average. However, supply
uncertainty in 2023 remains high with increased reliance on LNG imports. The global LNG liquefaction utilisation rate in
2022 was 84% (similar to 2021). Increased availability of LNG on the spot market in 2022 was a direct consequence of lower
LNG imports in China (down 21% compared to 2021) and South America. The end of the zero-Covid policy since December
2022 and the economic recovery in China are likely to create increasing competition for LNG cargoes and renewed gas price
pressure in Europe in 2023.
In such a context, the development of domestic gas supply and the production of renewable gases (green hydrogen and
biomethane) are seen to have a key role to play to improve energy security in Europe. ADX has 179.2 mmboe of best
technical prospective resources of natural gas in its Austrian portfolio that is proximal to existing pipeline networks (refer
to the Reserves Report). ADX is uniquely positioned to contribute within a relatively short timeframe to Europe’s response
to the on-going energy crisis and gas supply shortages.
Asset Activities Summary
Production and Development - Vienna Basin Fields and Anshof Discovery Area - Onshore Austria
ADX is operator and holds a 100% interest in the Vienna Basin Fields
ADX is operator and holds an 80% economic interest in the Anshof Discovery Area
The production rate from the Vienna Basin Fields and the Anshof Discovery Area (Austrian Production) during the year
averaged approximately 238 BOEPD compared to 284 BOEPD for the year ending December 2021. The 16% reduction in
average production was the result of well downtime from a number of key Vienna Basin producers during May and June
2022 which are being restored with a workover repair program that commenced after year end. Figure 5 shows the
contribution of Anshof test production during the last quarter of 2022. Austrian production during 2023 is expected to
increase substantially with the restoration of production from shut in Vienna Basin Field wells and the consistent
contribution of production from Anshof-3 well production.
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ADX ENERGY LTD
OPERATIONS REPORT
Figure 5: Austrian average daily oil equivalent production rate for oil, gas and total BOEPD
Sales revenues from Austrian Production during the year totalled A$ 14,451,000, a 59% increase compared to the year
ending 31 December 2021. The increase in revenue is the result of an increase in the average Brent crude oil price from
USD 70.73 per barrel in 2021 to USD 101.19 per barrel in 2022 as well as an increase in realised average gas price from EUR
36 MWh to EUR 126 per MWh. Figure 6 shows the variation in monthly sales revenue and the build-up in the revenue
contribution from the Anshof-3 well test.
Figure 6: Austrian Production monthly oil and gas sales revenue
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ADX ENERGY LTD
OPERATIONS REPORT
Anshof Oil Discovery Area Appraisal and Development
The Anshof-3 exploration well located in the ADX-AT-II license in Upper Austria encountered oil in Eocene oil reservoirs in
January 2022 and was subsequently flow tested in May 2022. An extended production test commenced on 16 October
2022 using a leased early production unit. The well produced at a stable rate of approximately 120 barrels per day during
the fourth quarter. Well production performance exceeded expectations in relation to pressure support and deliverability.
Water-free 33° API crude oil production has been maintained since October 2022. Crude oil quality meets all the required
specifications of the transporter and the buyer (OMV-refinery near Vienna).
Figure 7: Oil tanker loading during long term testing at the Anshof-3 location
Limitations in crude oil storage capacity at the Anshof-3 well site has caused production interruptions due to curtailment
of crude oil transport by truck. Additional tank storage will be installed during the second quarter of 2023 that will increase
continuous oil production preventing the need for well shut ins at times when road transport is curtailed.
Anshof Field Independent Reserves Assessment
Independent consultants RISC Advisory Pty Ltd (RISC) were engaged to provide an independent reserve and resource
assessment for the Anshof field. The competent person’s report prepared by RISC (CPR) has an effective date of 1 October
2022. Refer to ASX release dated 31 October 2022.
The CPR results for 2P (proven + probable) reserves category are summarised as follows:
2P (proven + probable) gross reserves estimated at 5.2 million barrels of oil equivalent as at 1 October 20221; and
the estimated Net Present Value (NPV8) of the gross 2P reserves is EUR 42.3 million (approx. A$ 67 million) in real
terms. The NPV8 was calculated at RISC’s oil price forecast being equivalent to an average price of USD 71 per barrel
and discounted at 8%. ADX expects better well performance and therefore less production wells to fully develop the
Anshof field than has been estimated by RISC. This has the potential to significantly enhance field economics.
At the effective date ADX’ 80% net share of the Anshof field’s gross 2P reserves increases ADX’ total reserves position by
223%to 5.85 million barrels of oil equivalent in aggregate including the producing Gaiselberg and Zistersdorf fields located
in the Vienna Basin.
1 Proved and Probable Development Justified Reserves including associated gas produced from the field has been assessed in accordance with SPE-
PRMS 2028 Petroleum Resources Management System.
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ADX ENERGY LTD
OPERATIONS REPORT
The CPR also highlighted the large 3P (proven + probable + possible) reserves and 3C contingent resource potential of the
Anshof Field of 26 million barrels of oil equivalent (refer to table 1 below) which ADX plans to commence appraising with
the Anshof-2 well during the third quarter of 2023.
The CPR was conducted before the commencement of long-term production testing of the Anshof-3 well which has
confirmed excellent reservoir continuity and pressure support.
The 1P, 2P and 3P Reserves have been classified as Undeveloped Reserves (Development Justified) and additional 3C
Contingent Resources (Development Pending) have also been identified. A summary of the gross oil and gas reserves and
resources for the Anshof Field is below in Table 1.
Table 1: Anshof Field Reserves and Resources
Oil (MMstb)
Gas (MMscf)
Total (MMboe)
1P
0.4
0.3
2P
5.0
4.0
3P
12.0
9.6
1P
96
76
2P
3P
1,169
2,812
935
2,250
1P
0.5
0.4
2P
5.2
4.1
3P
12.5
10.0
Oil (MMstb)
Gas (MMscf)
Total (MMboe)
1C
2C
3C
1C
2C
3C
1C
2C
3C
0
0
0
0
12.9
10.3
0
0
0
0
3,041
2,433
0
0
0
0
13.5
10.8
Oil & Gas Reserves
Anshof gross reserves
ADX net share
Oil & Gas Contingent
Resources
Anshof gross
Contingent Resources
ADX net share
Notes:
1. The notional reference point for reserves is the permit boundary or export line inlet.
2. ADX has an 80% economic interest in the Anshof discovery area and 80% entitlement to its gross reserves and resources.
3. Probabilistic methods have been used to determine oil in place and recoverable oil. Deterministic methods were used to
develop production profiles and well numbers.
4. The 1P case is economically marginal but falls within the typical 10% audit tolerance. Therefore, volumes can be classified
as reserves.
5. 1P reserves are based on a 3-well development of the 1P area. 2P reserves are based on a 14-well development of the 2P
area. 3P reserves are an upside performance of the 2P wells. An additional 15 wells are estimated to fully develop the
high case field area, with this incremental resource classified as contingent resources.
6. Associated gas resources include inerts sold with the gas. There is no fuel and flare.
7. Conversion factors are 7.3 bbl per tonne of oil and 5,800 MMscf per MMboe of gas.
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.
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ADX ENERGY LTD
OPERATIONS REPORT
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.
Anshof-2 and Anshof-1 Development Drilling
The Anshof-2 and the Anshof-1 development wells will be drilled from the same drilling and production site as the Anshof-
3 well. Anshof-2 is scheduled for drilling during the third quarter 2023 and the Anshof-1 well is planned to spud at the end
of 2023 or the first quarter of 2024.
The wells are planned to progressively target thicker reservoir intersections in the 25 km2 mapped Anshof structure.
Anshof-3 did not intersect an oil water contact and the well continues to produce water free without discernible pressure
decline, hence a large upside potential area remains to be appraised and developed.
Drill preparations for the wells included planning and long lead item equipment purchases, finalising relevant construction
permits for cellar installation ahead of drilling as well as finalising service agreements for drilling and completion work. The
Anshof-2 well will appraise the extent of the downdip oil in the large structure. It will be a high angle well with its meterage
penetration of the Eocene oil reservoir maximising both the well oil flow rate and potential reserves recovered by the well.
Anshof-1 well will be drilled as a more crestal producer in a thicker part of the Eocene reservoirs relative to the Anshof-3
well located in the Eastern part of the structure. The bottom hole location of Anshof-1 will be optimised utilising data
gathered from the Anshof-2 well.
Fast track development wells
targeting high productivity thick
Eocene reservoir areas
Crestal Anshof-3 discovery
well
2
field area
25 km
Figure 8: Anshof field outline based on 3D model utilising 3D seismic and offset well data showing the Anshof-3 well
and the Anshof-2 and Anshof-1 well locations (shown in blue)
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ADX ENERGY LTD
OPERATIONS REPORT
Permanent Production Facilities Planning and Engineering
In addition to well planning and construction, design work was undertaken during the past year in preparation for the
planned installation of permanent production facilities after the drilling of Anshof-2 and Anshof-1 wells. It is intended that
a permanent production facility will be installed at the Anshof-3 well site, as well as related production pipelines to a
permanent export facility approximately 4 km away. The production facilities and pipelines will enable 24-hour field
production operations and replace the current early production system where oil production is limited by trucking capacity.
The commitment to the permanent facilities investment will be made based on the Anshof-2 and Anshof-1 well results.
Anshof Production License Application
Technical documentation supporting a planned production license application was prepared during the last quarter of
2022. License submission was made to the relevant Authority after the reporting date and a production license was
awarded in March 2023. The production license provides the regulatory framework for the development of the Anshof
Field including the planned drilling of the Anshof-2 and Anshof-1 wells commencing during the third quarter 2023.
Upper Austria Exploration Licenses, Molasse Basin – Onshore Austria
ADX is operator and holds a 100% interest in the ADX-AT-I and ADX-AT-II Licenses other than in the Anshof Discovery Area
where ADX is operator and holds an 80% economic interest. In the Northern Calcareous Alps zone of the ADX-AT-II license,
ADX will hold an 80% economic interest once MCF Energy Ltd (MCF) has fulfilled its investment obligations under the
applicable agreements (refer to license map below).
Figure 9: ADX’ ADX-AT-I and ADX-AT–II Upper Austria Exploration Licenses
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ADX ENERGY LTD
OPERATIONS REPORT
Figure 10: ADX geological cross section showing the giant Welchau gas prospect in the South (Calcareous Alps in blue)
and ADX’ Anshof oil field in the North
During May 2022, ADX successfully finalised agreements with the Austrian Mining Authority for the expansion of license
area for exploration, production and gas storage up to a total area of 1,022 km2. The license areas, ADX-AT-I and ADX-AT-
II, are valid from 1 April 2022 for a period of up to 16 years without any relinquishment. In the case of a discovery, a
production license with a validity of up to 60 years can be granted. In addition to exploration and production rights, ADX
has also been granted the rights for gas storage.
The licenses which are largely covered with modern 3D seismic contain a well-balanced portfolio of oil and gas prospects
ranging from low risk shallow gas appraisal opportunities to high impact gas prospects such as the ZAM, OHO and LBG gas
prospects in ADX-AT-I. As a follow up to the recently discovered Anshof oil field, several low risk satellite prospects have
been matured to drill ready status during the year, such as the GRB and SGB prospects highlighted in the license map above.
The table below provides an overview of the inventory announced on 30 November 2020, with revisions on 30 March 2021,
29 July 2021 and 21 April 2022. The table also includes the giant Welchau gas thrust anticline prospect described in the ASX
release dated 20 June 2022. ADX is continuing to generate new prospects and review its portfolio. ADX expects to announce
several additions and upgrades to this portfolio in May 2023.
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ADX ENERGY LTD
OPERATIONS REPORT
Prospect Name
Fluid
Best Technical
Recoverable (MMboe)
HIGH IMPACT
WELCHAU (WEL)
GAS
EXPLORATION
OBERHOLZ (OHO)
GAS (OIL)
ZELL AM MOOS (ZAM) GAS (OIL)
134.0
20.4
14.6
TREND
EXPLORATION
GRUENBURG (GRB)
OIL
IRRSDORF (IRR)
TERNBERG (TERN)
GAS
OIL
LICHTENBERG (LBG)
GAS
WOLFSGRUB (WG)
PERGERN (PERG)
OIL
OIL
AUSSERROID (ARD)
GAS
SIERNING (SIER)
GAS
D ISC OVERIES &
STEINGRUB (SGB)
APPRAISAL
LINDENBERG (LIND)
OIL
OIL
BRUNN (BRUNN)
GAS
KLEINRAMING (KLE)
OIL
STEYR (STEY)
GAS
Total Exploration (MMboe)
Total Exploration + Appraisal (MMboe)
Figure 11: ADX Upper Austria prospect inventory
8.5
3.0
3.2
2.7
2.2
2.5
2.2
1.0
2.8
0.8
0.8
0.6
0.5
194
200
The following prospects and prospect areas respectively were a primary focus of activity during the year 2022:
The giant Welchau gas prospect which has an 807 BCFE2 2 (approx. 134 MMBOE) best technical prospective resource
proximal to the Molln-1 gas discovery well which tested pipeline quality gas down dip from the proposed drilling
location. The Original Resources Reporting Date for Welchau prospective resources was on 16 May 2022, the estimates
were further revised on 20 June 2022. The Welchau prospect is in the foothills of the Austrian Alps and is analogous to
the giant anticline structures discovered in Kurdistan and the Italian Apennines. The prospect is relatively shallow with
a drill depth of approximately 1120 metres total vertical depth (TVD) and within tie-in distance to the national gas
pipeline network.
2 The prospective resource estimates in this release are classified and reported in accordance with the PRMS – SPE Guidelines for the exploration
licenses ADX-AT-I and ADX-AT-II
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ADX ENERGY LTD
OPERATIONS REPORT
During the year 2022, ADX has commenced the planning and permitting of the Welchau well. ADX has also purchased
long lead items for the well with a view to commencing the Welchau drilling operation during the third quarter of
2023. The estimated well cost for drilling and evaluating the well is approximately EUR 3,810,000. Refer to the section
on Farm-in Funding and New Ventures.
The Anshof satellite prospects such as GRB and SGB were significantly de-risked as a result of the Anshof-3 oil discovery
and its excellent production performance from a relatively thin Eocene sandstone reservoir. These prospects have
therefore become of high interest to potential further farminees.
The KTZ shallow gas leads and prospect area, which is highly prospective for gas and surrounded by infrastructure,
makes even small discovery volumes highly economic. These prospects can have very large gas resource upside
potential due to their combined structural and stratigraphic nature. A combination of leading edge AVO (Amplitude
versus Offset) analysis and AI (artificial intelligence) geobody detection has delivered a prospective set of leads which
are currently being matured to a drillable status. ADX plans to provide details and prospective resources in May 2023
together with the shallow low risk gas appraisal opportunities in ADX-AT-II such as the Steyr prospect. ADX expects to
be able to attract future investors with a rich portfolio of shallow low risk and short time frame to commercialise gas
prospects, some of which having large upside potential due to their stratigraphic nature.
The Gmunden multi energy resource prospect includes shallow, quick to monetise gas targets together with a deeper
geothermal target assessed to have between 15 to 20 MW renewable energy potential based on similar developments
in the region. There are a number of gas targets identified on 3D seismic these targets are supported partly by 3D
seismic based direct hydrocarbon indicators (DHIs) based on AVO anomalies.
The ZAM prospect is a follow-up to the large independently assessed OHO prospect with 20.4 MMBOE (approx. 140
BCFE gas equivalent) best technical prospective resources (refer to ASX release dated 10 November 2021 regarding
Independent Review of OHO by RISC). Similar to OHO, high quality natural gas is expected at the ZAM prospect which
has technical prospective resources estimated at 15 MMBOE3 2 (approx. 100 BCFE); and
Finally, several medium risk but large upside potential gas prospects in ADX-AT-I have been matured into drill ready
status. The main focus was on the LGB and IRR gas prospects shown in the above table. Both prospects are AVO
supported indicating presence of gas directly, have large upside potential and are very close to gas infrastructure. The
nearby Haidach gas field (now used for gas storage) is a well understood analogy for these also partly stratigraphic
prospects. Haidach has produced in excess of 150 BCF of gas and is an example of the excellent resource potential of
the area.
Iecea Mare Production License and Parta Exploration License – Onshore Western 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 licence (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.
During 2022, ADX undertook a detailed technical evaluation of the license potential, with a focus on the successfully
reprocessed 3D seismic in the Iecea Mare production license. The 3D seismic also covers the exploration prospect IMIC-2
(Updip Carpinis-55). AVO work revealed that the shallow gas target on this location has a high chance of being gas bearing.
Another focus of activity was to progress and mature low risk infill and side-track opportunities in the Iecea Mare production
license. The ADX reprocessed 3D seismic facilitated the maturation of four low risk side-track and infill opportunities within
existing discoveries or fields. These opportunities were under final review in 2022 and will be marketed to potential investors
in 2023.
A regional geothermal study was conducted over the Parta licence, and a detailed report was completed for the Iecea Mare
production licence with a special focus on the ADX’ IMIC-1 well. ADX has been approached by several local communities in
3 The prospective resource estimates in this release are classified and reported in accordance with the PRMS – SPE Guidelines for the exploration
licenses ADX-AT-I and ADX-AT-II
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ADX ENERGY LTD
OPERATIONS REPORT
relation to geothermal projects mainly for district heating, given its drilling experience and extensive 2D and 3D seismic
database in the area. A very high geothermal gradient was encountered while drilling the well in the order of 6°C per 100
metres which is of interest for a potentially viable geothermal project.
Work was undertaken during the fourth quarter in relation to the Parta license extension to provide information to the
relevant Romanian authorities following several positive meetings in relation to the possible extension of the current license
period4. The governing authority is supporting the extension which can be granted through a formal government process.
Italy - d 363C.R-.AX Licence - Offshore Sicily
ADX is operator and holds 100% interest in the d 363C.R-.AX Exploration Permit
In February 2019, the Italian government suspended exploration activities in onshore and offshore licenses to determine
suitability for sustainable hydrocarbon prospecting, exploration and development activities (refer ASX Announcement dated
4 February 2019). In May 2022, Italian licensing authorities offered ADX the opportunity to ratify the d363C.R-.AX licence
under a number of conditions including that only the gas potential within the licence is commercially exploited. Technical
work undertaken by ADX has highlighted the excellent shallow gas prospectivity of the shallow water licence.
The total best technical prospective resource potential of five high graded prospects is 369 BCF (refer ASX announcement 30
August 2022). The five high graded prospects are considered as relatively low risk since they are simple 4-way dip anticline
closures featuring a seismic amplitude response commonly known as DHIs.
The table below summarises the above-mentioned prospects which are defined by existing 2D seismic.
The original Resources Reporting Date for the above prospective resources was on 30 August 2022.
Based on initial discussions with the Italian authorities, ADX has, in the fourth quarter of 2022, submitted a work program
committing to seismic reprocessing and the option to acquire 2D seismic and 3D seismic data. Since none of the gas prospects
and other identified leads have been covered with 3D seismic to date, ADX expects that more prospects may be identified,
including large stratigraphic traps as indicated by the existing 2D seismic. It is expected that 3D seismic would substantially
reduce exploration risk and attract further investment through farmouts. At the end of 4 years after licence ratification, ADX
could elect to drill a well or drop the licence.
It is expected that the Italian authorities will provide a positive response in 2023, given the importance of potential domestic
gas supply to substitute Russian gas imports.
4 The total validity of the Iecea Mare production licence is 20 years and is not affected.
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ADX ENERGY LTD
OPERATIONS REPORT
Farm- In & New Ventures Activities
During the 2022 reporting period, ADX has sought to partly finance its ongoing exploration activities in Austria through
farmouts and, at the same time, expand its portfolio in existing areas of focus or activity such as Romania.
The farmout activities in Austria are supported by a comprehensive data room managed by both ADX and its London based
advisors. This activity has already led to two successful farmin transactions within its Upper Austrian licences, including a
transaction to fund 40% of the Anshof-3 well in 2021 and a transaction to fund 50% of the Welchau-1 well. On the 29th of
November 2022, ADX announced an investment agreement with Kepis & Pobe Financial Group Inc., (KPFG) a leading
Canadian energy finance and development group. KPFG has committed to fund 50% of the Welchau-1 well costs to earn a
20% economic interest in the Welchau farmin area which includes the giant Welchau gas prospect (807 BCFE).
Subsequently, KPFG satisfied completion conditions, including the payment of initial funds for long lead items during the
first quarter of 2023. As announced on 23 January 2023, KPFG assigned their interest in the investment agreement to TSXV
listed MCF Energy Ltd.
In the fourth quarter of 2022, ADX further progressed its farmout activities for the Austrian ADX-AT-I and ADX-AT-II
portfolio and expects to conclude further transactions during 2023.
ADX Renewable Energy Project Formation
Vienna Basin Hydrogen Production and Storage Project
ADX is progressing an integrated hydrogen project in the Vienna basin which is targeting production of renewable and
green hydrogen (through electrolysis using renewable electricity) and storage of such hydrogen by redeploying depleted
underground reservoirs at the Vienna Basin Fields which were previously containing and producing methane (natural gas).
In addition to the value development potential of the project, the ability to potentially use the Vienna Basin Fields for clean
energy production and storage can add significant long-term value to the fields through upcycling of existing assets by
sharing operations and the likely deferment of fields’ abandonment.
Renewable and green hydrogen (H2) is a carbon and emission free gas (both in its production and combustion) produced
from electrolysis using as a feedstock electricity generated from renewable sources and a process resulting in CO2 emissions
of less than 36.4 grams per Mega Joule of hydrogen produced. Green hydrogen used for the mobility sector in the EU needs
to comply with strict additional requirements as per the European Commission Delegated Act adopted on 10 February 2023
supplementing the EU Directive 2018/2001.
Why renewable hydrogen is critical for the energy transition:
Renewable hydrogen is critical to the success of the energy transition and the achievement of the EU Net Zero targets by:
facilitating the decarbonisation of sectors less suited for direct electrification such as:
-
-
-
industrial production of raw materials (steel, fertilisers, refined products, chemicals, etc),
long-range ground mobility, heavy vehicles, shipping and aviation (synthetic fuels), and
high-grade industrial heat (cement, etc) and back-up power generation;
integrating energy from renewable sources by:
-
-
-
providing resilience, flexibility and system balancing through storage,
allowing transportation of high volumes over long distances with pipelines and ships, and
creating an outlet for “stranded” renewable energy generated in remote locations;
providing significant CO2 abatement potential of 4 billion tonnes of CO2 per annum in 2040 and 7 billion tonnes of CO2
per annum in 2050 by displacing coal, diesel, fuel oil, natural gas and grey hydrogen; and
improving energy security by:
-
allowing domestic production by countries generating or having access to renewable electricity,
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ADX ENERGY LTD
OPERATIONS REPORT
-
-
providing the ability to store large quantities over a long period of time with minimal losses, and
removing reliance on politically unstable or hostile countries for energy supply.
Project overview and basis of design:
ADX is planning to implement the Vienna Basin Hydrogen Production and Storage Project in two phases as follows:
a pilot phase with a 2.5 Mega Watt (MW) electrolyser capacity capable of producing circa 370 tonnes of renewable
hydrogen from 2025; and
a scaleup phase whereby the electrolyser capacity will be upgraded to 30 MW resulting in a renewable hydrogen
production capacity of 5,200 tonnes per annum from 2028.
The objective of the pilot phase is to “prove the concept” of the project by testing the systems and cycling the reservoirs,
become a reliable supplier of renewable and green hydrogen and develop a “first mover advantage” in the market prior to
scaling up the electrolyser capacity. ADX has received an offer from a leading renewable electricity producer in Austria
regarding the supply of baseload renewable electricity for the pilot phase (requirement estimated at 22 GWh p.a. to achieve
maximum electrolyser utilisation).
ADX is also in discussions with the local electricity grid operator (“Netz Niederösterreich”) to evaluate the various grid
access options including cost and timeline to complete the necessary grid upgrades and connections to deliver the
electricity required for the pilot phase (22 GWh p.a.) and the scaleup phase (250 GWh p.a.).
In order to execute projects ADX plans to team up with a multi-discipline consultancy firm with project management
experience on the hydrogen sector to provide design, engineering, planning and project management support for the
project. Discussions with leading manufacturers of electrolysers have also been initiated.
Figure 12: Overview of the Vienna Basin Hydrogen Project’s basis of design
ADX plans to sell renewable hydrogen to different market segments which will contribute to the decarbonisation of the
Austrian economy. The pilot phase will primarily focus on deliveries to the local and regional pipeline network to which the
Vienna Basin Fields are connected and ADX supplies its existing gas production.
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ADX ENERGY LTD
OPERATIONS REPORT
During this phase, ADX will also seek to secure independent certification of its renewable hydrogen as “green hydrogen”
and allocate part of its green hydrogen production to industrial users requiring pure green hydrogen which could be
delivered by road tankers. This will allow ADX to build relationships in a “premium” market segment likely to attract higher
prices. The location of the Vienna Basin Fields offers the possibility to target a large number of industrial users (mainly
participants to the Emissions Trading Systems (ETS)) in Austria, Czech Republic, Slovakia and Hungary.
From a marketing perspective, the scaleup phase will aim at:
ramping up pipeline deliveries with the expansion of dedicated hydrogen networks. The European Hydrogen Backbone
initiative plans to develop a dedicated hydrogen pipeline network across Europe targeting 28,000 km by 2030 and
53,000 km by 2040 consisting of repurposed gas pipelines (60%) and new pipeline stretches (40%);
expanding supplies to industrial users to cater for growing demand linked to the reduction over time of their carbon
emission allocations under the ETS; and
develop sales to the mobility sector in collaboration with a network of fuelling stations. This will require that ADX
develops its own renewable electricity generation capacity dedicated to green hydrogen production in order to comply
with applicable EU regulations. The development and expansion of the Vienna Basin Solar Project (see below) could
provide suitable feedstock for this market segment.
By combining production and storage of clean energy (renewable hydrogen), the project will support both the
decarbonisation of the Austrian economy (scaleup phase expected to displace the equivalent of 1,100,000 litres of diesel
per annum reducing carbon emission by 42,270 tonnes p.a.) and the improvement of Austria’s energy supply security in
line with the objectives set by the Austrian government in the National Hydrogen Strategy (NHS).
The Vienna Basin Hydrogen Production and Storage Project has all the ingredients for success:
ADX is well positioned to successfully develop an integrated hydrogen project at the Vienna Basin Fields by combining:
availability of renewable electricity. ADX has received an offer for the supply of baseload renewable electricity (22
GWh p.a.) for the pilot phase of the project;
access to the electricity grid. A high voltage power line located within a 10-km radius of the Vienna Basin Fields could
supply large quantities of electricity for the scale-up phase of the project;
suitable high quality underground reservoirs able to safely store in aggregate approximately 100+ GWh of hydrogen
(equivalent to the annual energy consumption of 25,000 Austrian households) have already been identified;
availability of fresh water. Groundwater is plentiful in the area for use as feedstock for electrolysis; and
availability of infrastructure to deliver hydrogen to market. ADX owns a network of existing gas pipelines connected to
the local and regional gas grid. Since June 2021, Austria allows the injection of hydrogen in gas pipelines up to 10% by
volume (up from 4% previously).
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ADX ENERGY LTD
OPERATIONS REPORT
Figure 13: Schematic of the Vienna Basin Production and Storage Project Concept
Overview of the hydrogen market in Europe and Austria:
On 18 May 2022, the European Commission adopted the REPowerEU plan seeking to phase out imports of fossil fuels from
Russia before 2030 in response to the invasion of Ukraine by Russia in February 2022. To achieve this target, the plan
emphasises the development of clean energy as follows:
increased target for the generation of energy from renewable sources by 2030 (45% of the EU energy consumption
instead of 40% previously);
acceleration of the electrolyser capacity build-up targeting 17.5 GW by 2025 and the production of 10,000,000
tonnes of renewable hydrogen per annum; and
creation a modern regulatory framework for the hydrogen sector.
The target for renewable hydrogen production (10,000,000 tonnes p.a.) contained in the REPowerEU plan is in addition to
5,600,000 tonnes envisaged under the EU plan “Fit for 55”.
Figure 14: Overview of EU funding, regulatory support, plans and targets (by 2030)
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ADX ENERGY LTD
OPERATIONS REPORT
Austria has an ambitious target to produce 100% of its electricity from renewable sources by 2030 and achieve carbon
neutrality by 2040. On 2 June 2022, the Austrian government issued the NHS which targets the installation in Austria of 1
GW of electrolyser capacity by 2030 for the production of green hydrogen to be used in sectors that have no alternatives.
This plan is supported by EUR 40,000,000 p.a. of funding under the Renewable Energy Expansion Act.
Vienna Basin Solar Project
ADX owns approximately 13 hectares of land at the Vienna Basin Fields including well sites and land plots where production
facilities are located. To run its low emissions oil and gas production operations at the Vienna Basin Fields, ADX has an
electricity consumption of approximately 4.5 GWh per annum which constitutes a significant portion of the fields’ operating
costs.
With a view to further decarbonising its operations and lowering operating costs in a high electricity prices environment
(wholesale electricity prices in Austria averaged EUR 262 per MWh in 2022), ADX is considering the installation of ground-
mounted solar power generation plants at the Vienna Basin Field sites.
On 21 September 2022, ADX executed a letter of intent with RWA Solar Solutions GmbH (RWA) regarding joint feasibility
studies for the potential development of solar power plants at the Vienna Basin Fields.
RWA is a subsidiary of RWA Raiffeisen Ware AG, a wholesale and service cooperatives company in Austria. RWA provides
engineering, procurement and construction (EPC) and operations and maintenance (O&M) solutions for photovoltaic (PV)
systems. RWA also makes investments in PV systems and has built PV plants in Austria with a combined installed capacity
exceeding 15 Mega Watt peak (MWp).
After initial feasibility and evaluation work, ADX’ preference is to develop a plant capacity of 2.5 MWp over a land area of
2 hectares based on an East-West orientation of the PV panels. ADX received a proposal from RWA during the fourth
quarter of 2022 for engineering, procurement, construction, installation and commissioning of such PV plant.
Figure 15: Potential layout of a 2.5 MWp PV plant at the Gaiselberg site
ADX and RWA are progressing the evaluation of a self-consumption model for the proposed 2.5 MWp PV plant whereby
100% of the solar electricity generated by the plant would be used to run the Vienna Basin Fields’ operations by using a
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ADX ENERGY LTD
OPERATIONS REPORT
dedicated battery system. With such configuration, the renewable electricity generated by the PV plant could be used to
cover 45-50% electricity consumed by the Vienna Basin Fields operations.
The Vienna Basin Solar Project (referred to as VB Solar Project in Figure 12) is expected to have a useful life of 25-30 years
(with the PV panels initially mounted) offering the opportunity to gradually dedicate renewable electricity generated by
the plant (in excess of 2 GWh p.a.) to green hydrogen production for the mobility sector.
Gmunden Multi-Energy Project
The Molasse Basin is a proven, highly active geothermal growth area with an outstanding 90% success rate for geothermal
wells. Numerous geothermal wells in the foreland Molasse of Southern Bavaria and Upper Austria provide a valuable
database to build the geological model and demonstrate the profitability of geothermal wells. The combination of a high
geothermal gradient and excellent proven reservoirs provide low risk commercialisation opportunities for geothermal
developments.
The Gmunden Multi-Energy prospect is located in the Eastern part of the ADX-AT-I exploration licence in Upper Austria.
The project targets oil and gas potential as well as fractured Malmian (Jurassic) limestone which is the principal geothermal
reservoir in the highly successful geothermal projects across the nearby border in Germany (Munich area).
The Gmunden Multi-Energy project offers a combination of oil, gas and geothermal resource potential. The project has a
geothermal power capacity estimated at 14.4 MW and could generate 115 GWh per annum of geothermal energy (power
and heat) based on one multilateral well and two industrial off-takers.
ADX is reviewing funding models for a multi-energy well targeting shallower gas and oil as well as testing the deeper
geothermal potential.
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ADX ENERGY LTD
RESERVES REPORT
RESERVES REPORT
Gaiselberg and Zistersdorf Production Assets, Vienna Basin – Onshore Austria
ADX purchased the Vienna Basin Fields (Gaiselberg and Zistersdorf) in December 2019. Since then, the fields have been
producing oil and gas continuously and have been ADX’ primary source of cashflow.
ADX equity interest in the relevant production licenses is summarised as follows:
Field
Zistersdorf Field
Gaiselberg Field
ADX Vienna Basin Oil and Gas Field Interests
Working Interest
License Expiry 1
Block or License
100%
100%
N/A
N/A
Zistersdorf
Gaiselberg
Since purchase of the fields, two Competent Person’s Reports (CPR) have been undertaken by independent consultants
engaged by ADX to audit the Developed Reserves at the Vienna Basin Fields. The first CPR had an effective date of 31
December 2019 and the most recent CPR prepared by RISC has an effective date of 1 July 2021. The results of RISC’s CPR
were announced on the ASX on 4 November 2021.
ADX reserves attributable to Vienna Basin Fields effective 31 December 2021 were previously reported (Annual Report
2021). These were based on RISC CPR audited Developed Reserves as at 1 July 2021 less production during the subsequent
six-month period.
The following table summarises ADX’ unaudited estimates of Developed Reserves as at 31 December 2022, based on reserves
reported 31 December 2021, less production from the Vienna Basin Fields during the subsequent twelve-month period.
ADX Vienna Basin Unaudited Developed Reserves as of 31 December 2022
Total Developed (BOE) @ 31
December 2021
Production - 1 January to 31
December 2022
Total Developed (BOE) @ 31
December 2022
1P Reserves
2P Reserves
1,141,630
1,801,630
81,665
81,665
1,059,965
1,719,965
Anshof Discovery Area, ADX AT-II AGS license, Upper Austria – Onshore Austria
During January 2022, ADX discovered oil in Eocene reservoirs and shallow gas in Miocene reservoirs at the Anshof-3 well.
ADX completed and tested the Eocene reservoir in May 2022. A long-term production test commenced from the Anshof-
3 well on 16 October 2022. The well has produced water free oil continuously at approximately 120 barrels per day with
no indication of decline.
ADX equity interest in the relevant license is summarised as follows:
Field
Economic Interest
License Expiry 1
Block or License 2
ADX Anshof Oil Field Interests
Anshof Field
Note 1: License term for life of field
Note 2: ADX holds an 80% economic interest in the Anshof Field (Anshof Discovery Area) and a 100% equity interest in the ADX AT-II AGS license
ADX AT-II
80%
N/A
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ADX ENERGY LTD
RESERVES REPORT
Independent consultants RISC were engaged to provide an independent reserve and resource assessment for the Anshof
field. The RISC CPR relating to the Anshof field has an effective date of 1 October 2022. Refer to ASX release dated 31
October 2022. A long-term production test commenced from the Anshof-3 well on 16 October 2022.
In March 2023, subsequent to this reporting date, a production license was awarded by the Austrian authorities for the
Anshof field (i.e. the Anshof Discovery Area). The production license provides the regulatory framework for the
development of the Anshof field including the planned drilling of the Anshof-2 and Anshof-1 wells from the same well site
as the producing Anshof-3 well during the second half of 2023.
Summary of Anshof CPR results
1P, 2P and 3P reserves have been classified as Undeveloped Reserves (Development Justified) and 3C Contingent Resources
(Development Pending) have also been identified in the RISC CPR.
The gross oil and gas reserves and resources for the Anshof field are summarised as follows:
RISC CPR Anshof Field Reserves and Resources (1 October 2022)
Oil (MMstb)
Gas (MMscf)
Total (MMboe)
1P
0.4
0.3
2P
5.0
4.0
3P
12.0
9.6
1P
96
76
2P
3P
1,169
2,812
935
2,250
1P
0.5
0.4
2P
5.2
4.1
3P
12.5
10.0
Oil (MMstb)
Gas (MMscf)
Total (MMboe)
1C
2C
3C
1C
2C
3C
1C
2C
3C
0
0
0
0
12.9
10.3
0
0
0
0
3,041
2,433
0
0
0
0
13.5
10.8
Oil & Gas Reserves
Anshof gross reserves
ADX net share
Oil & Gas Contingent
Resources
Anshof gross
Contingent Resources
ADX net share
Notes:
1. The notional reference point for reserves is the permit boundary or export line inlet.
2. ADX has an 80% economic interest in the Anshof discovery area and 80% entitlement to its gross reserves and resources.
3. Probabilistic methods have been used to determine oil in place and recoverable oil. Deterministic methods were used to
develop production profiles and well numbers.
4. The 1P case is economically marginal but falls within the typical 10% audit tolerance. Therefore, volumes can be
classified as reserves.
5. 1P reserves are based on a 3-well development of the 1P area. 2P reserves are based on a 14-well development of the
2P area. 3P reserves are an upside performance of the 2P wells. An additional 15 wells are estimated to fully develop the
high case field area, with this incremental resource classified as contingent resources.
6. Associated gas resources include inerts sold with the gas. There is no fuel and flare.
7. Conversion factors are 7.3 bbl per tonne of oil and 5,800 MMscf per MMboe of gas.
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ADX ENERGY LTD
RESERVES REPORT
The following tables summarise ADX’s unaudited estimates of Undeveloped Reserves and Contingent Resources as of 31
December 2022, based on reserves as of 1 October 2022 (RISC CPR audited Undeveloped Reserves and Contingent Resources
reported on 31 October 2022) less production from the Anshof Field during the fourth quarter of 2022.
ADX Anshof Field Unaudited Net Undeveloped Reserves as of 31 December 2022
(80% Economic Interest Share)
1P Reserves
2P Reserves
3P Reserves
Total Reserves (BOE) @ 1 October
2022
Production - 16 October to 31
December 2022
Total Reserves (BOE) @ 31 December
2022
400,000
5,186
394,814
4,100,000
10,000,000
5,186
5,186
4,094,814
9,994,814
ADX Anshof Field Unaudited Contingent Resources as of 31 December 2022
(80% Economic Interest Share)
Total Resources (BOE) @ 31
December 2022
ADX’ Total Austrian Reserves
1C Resources
2C Resources
3C Resources
0
0
10,800,000
ADX’ total net Austrian Reserves are summarised below. This includes the Vienna Basin Fields Reserves and Anshof Field
Reserves (described above) as of 31 December 2022. The reserves variance is a comparison of 2021 year end reserves versus
2022 year end reserves.
The positive variance of 223% estimated for the 2P reserves category is the result of the reserves attributed to the Anshof
field discovered in January 2022 by the Anshof-3 well which was subsequently placed on long term test production in October
2022. A production license for the Anshof field was awarded in March 2023.
ADX Austrian Fields Unaudited Net Reserves as of 31 December 2022
Anshof Field and Vienna Basin Field Reserves (Barrels of Oil Equivalent)
1P Reserves
2P Reserves
3P Reserves
N/A 1
394,814
1,059,965
1,719,965
Vienna Basin Field (BOE) @ 31
December 2022
Anshof Field Reserves (BOE) @ 31
December 2022
Total Reserves (BOE) @ 31 December
2022
Vienna Basin Field (BOE) @ 31
December 2021
Reserves Variance (%age) 2
Notes
1. No 3P reserves have been reported in relation to the Vienna Basin Fields
2. The Variance comparison is between ADX Austrian Reserves as of 31 December 2021 and 31 December 2022
3. The above table does not include 3C contingent resources assessed in the RISC CPR as announced on 31 October 2022
1,141,630
4,094,814
1,801,630
5,814,779
1,454,779
223%
N/A
N/A
27%
9,994,814
9,994,814
- 28 -
ADX ENERGY LTD
RESERVES REPORT
Reporting Standards
Reserves and resources are reported in accordance with the definitions of reserves, contingent resources and prospective
resources and guidelines set out in the Petroleum Resources Management System (PRMS) prepared by the Oil and Gas
Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed and jointly sponsored by the American
Association of Petroleum Geologists (AAPG), World Petroleum Council (WPC), Society of Petroleum Evaluation Engineers
(SPEE), Society of Exploration Geophysicists (SEG), Society of Petrophysicists and Well Log Analysts (SPWLA) and European
Association of Geoscientists and Engineers (EAGE), revised June 2018.
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 25 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).
RISC independent audit and competent person reports
RISC has conducted an independent audit of the Developed Reserves for the Vienna basin Fields and a competent persons
report for Undeveloped Reserves for the Anshof Fields. The reserves described above are based RISC’s assessments which
have been previously announced by ADX. RISC has previously consented to the inclusion of information specified as RISC
audited values in this report.
- 29 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Your Directors present their report for the year ended 31 December 2022.
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 35 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).
Paul Fink
MSc (Geophysics)
Executive Director (Appointed 25 February 2008)
Mr Fink has over 30 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 billion,
partly due to third 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, Executive Chairman of Xstate Resources 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 and execution, commercial
negotiations and financing including debt, equity, off-take finance, vendor finance and reverse take-overs.
Other directorships of listed companies in the last three years: Nil.
- 30 -
ADX ENERGY LTD
DIRECTORS’ REPORT
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 45
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 E79 Gold Mines 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 35 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 and Company Secretary of Stavely Minerals Limited, and Company Secretary for E79 Gold Mines Limited.
MEETINGS OF DIRECTORS
During the year, no formal board meetings were held. As the Board has two overseas directors, regular online
management meetings were held, and all important resolutions agreed via circular resolutions:
Name of Director
I Tchacos
P Fink
A Childs
E Etienvre
Circular Board
Resolutions
18
18
18
18
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 $Nil, Expiry 31/07/2024
Unlisted Options, Ex Price $Nil, Expiry 31/10/2024
Unlisted Options, Ex Price $Nil, Expiry 31/01/2025
Unlisted Options, Ex Price $Nil, Expiry 31/05/2025
Unlisted Options, Ex Price $Nil, Expiry 31/07/2025
Unlisted Options, Ex Price $Nil, Expiry 31/10/2025
Unlisted Options, Ex Price $Nil, Expiry 31/01/2026
Unlisted Options, Ex Price $Nil, Expiry 31/05/2026
Unlisted Options, Ex Price $Nil, Expiry 31/07/2026
Unlisted Options, Ex Price $Nil, Expiry 31/10/2026
Unlisted Options, Ex Price $Nil, Expiry 31/01/2027
Total Options
I Tchacos
P Fink
A Childs
E Etienvre
94,830,558
108,382,276
25,388,524
20,375,260
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,078,125
5,116,071
7,250,000
3,145,833
2,456,250
3,294,642
1,857,954
3,117,187
2,695,312
3,803,571
2,839,285
41,654,230
- 31 -
ADX ENERGY LTD
DIRECTORS’ REPORT
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
-
Kathari Energia Limited
-
Kathari Energia GmbH
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 UK controlled entity
Kathari Energia Limited owns 100% of this Austrian controlled entity
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.
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
Impairment expenses
Exploration expensed
Basic profit/(loss) per share from continuing operations
Net cash from/(used in) operating activities
Net cash from/(used in) investing activities
Net cash from/(used in) financing activities
During the year:
Consolidated
Consolidated
31 December 2022 31 December 2021
$
3,569,631
(2,437,874)
(133,611)
14,452,734
(7,451,979)
(2,351,874)
(817,122)
(2,105,903)
(0.07) cents
3,636,599
(4,829,609)
(1,189,792)
$
5,938,517
(4,346,264)
(174,666)
9,637,007
(5,705,718)
(2,828,081)
-
(2,455,477)
(0.16) cents
(2,131,316)
174,011
5,850,040
- Exploration expenditure was $2,105,903. This was expenditure primarily for Austria $1,592,092, new ventures
$377,453 and Romania $132,831.
- Loan notes and bank loans of $3,254,614 were repaid in cash during the year.
- 32 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Production from ADX’ Zistersdorf and Gaiselberg fields, and ADX’ share of the Anshof field in Austria was as follows:
Crude Oil Sold (Barrels)
Gas Sold (Boe)
Total Oil Equivalent (Boe)
Average Production Rate (Boepd)
31 December
2022
74,543
31 December
2021
95,163
12,309
86,852
238
8,604
103,767
284
Government Subsidy Received from the Austrian Government
During the year, ADX’ wholly owned subsidiary, ADX VIE GmbH received a further COVID-19 Pandemic (COVID) subsidy
totalling EUR 782,157 (A$ 1.2 million) from the Austrian government. This subsidy was paid by COFAG, Austria’s financing
agency which supports Austrian companies to mitigate the economic disruption caused by COVID and position those
companies for future growth. COFAG focuses on companies with a viable future business model. The fixed cost subsidy
assessment was based on eligible fixed business costs during the period September 2020 to February 2021. This is the
second subsidy payment received by ADX which is in addition to a previous payment of EUR 107,500 (approximately A$
158,000) received for the period March 2020 to June 2020.
Placement Raising A$ 2.55 million
On 10 August 2022, ADX advised it had successfully raised $ 2.55 million from a placement of 425,000,000 shares at a price
of $ 0.006 per share to sophisticated, institutional and professional investors (the Placement). One (1) free attaching
unlisted option was issued for every two (2) Placement Shares. The exercise price of the Placement Options is $ 0.013 with
an expiry date of 10 August 2024.
Funds raised by the Placement are to accelerate drilling programs in Upper Austria including the purchase of drilling long
lead items and securing services required for the giant Welchau prospect gas exploration well and the Anshof-2
development well. In addition to drilling related investment, ADX commissioned an early production facility to commence
commercial production from the Anshof-3 discovery well in October 2022.
Loan Repayments
In May 2022, ADX repaid A$ 437,500 of its Loan Notes. In addition, ADX VIE GmbH repaid EUR 188,333 (A$ 333,446) of bank
loans in June 2022.
In November 2022, ADX fully repaid the outstanding balance of its Loan Notes, totalling A$ 2,187,500. The outstanding
balance was the remainder of a A$ 3.5 million financing completed in October 2019 which was utilised in 2019 to fund the
completion of the acquisition of the Zistersdorf and Gaiselberg oil and gas fields located in the Vienna Basin, as well as
agreements for exploration data and access arrangements to RAG Austria AG’s production infrastructure in Upper Austria.
In addition, ADX’ Austrian subsidiary (ADX VIE GmbH) repaid its second principal instalment of bank loans (EUR 183,333 /
A$ 296,168). As at 31 December 2022, EUR 753,333 (A$ 1,184,673) remains repayable in five equal, semi-annual instalments
until 31 December 2024.
Unmarketable Parcel Share Sale Facility
On 19 December 2022, ADX announced the establishment of a share sale facility (Facility) for holders of fully paid ordinary
shares in the Company (Shares) valued at less than $ 500 (Unmarketable Parcel). Based on the price of Shares at the close
of trading on 3 February 2023 (Closing Date) of A$ 0.008, a holding of 62,499 Shares or less constituted an Unmarketable
Parcel. Shareholders who held an Unmarketable Parcel were mailed a Retention Form, and those wishing to retain their
Shares had to "opt-out" of the Facility by returning their duly completed Retention Form to the Company's share registry.
25,509,213 Shares were sold under the Facility in February 2023.
- 33 -
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
Unlisted Options
Total Options
Number
67,500,020
6,000,000
6,078,125
231,750,000
5,116,071
7,250,000
3,145,833
2,456,250
3,294,642
1,857,954
6,085,465
4,992,187
6,013,391
351,539,938
Exercise Price
1.5 cents
Nil cents
Nil cents
1.3 cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Expiry Date
26/11/2023
26/06/2024
31/07/2024
10/08/2024
31/10/2024
31/01/2025
31/05/2025
31/07/2025
31/10/2025
31/01/2026
31/05/2026
31/07/2026
31/10/2026
No optionholder has any right under the options to participate in any other share issue of the Company or any other related
entity.
23,250,146 unlisted options with an exercise price of nil were exercised by Directors 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.
- 34 -
ADX ENERGY LTD
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The Directors present the 2022 Remuneration Report, outlining key aspects of ADX’ 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 (KMP) 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
Other KMPs
Amanda Sparks
-
-
-
-
-
Executive Chairman
Executive Director
Non-Executive Director
Non-Executive Director
Company Secretary and Chief Financial Officer
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.
- 35 -
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 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 A$ 33,000 per annum, 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.
- 36 -
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.
Subsequently
monthly.
Ongoing
P Fink – Executive Director –
Consultancy with ADX Energy
Ltd
P Fink – Executive Director –
Consultancy with ADX VIE
GmbH
E Etienvre – Non-Executive
Director – Consultancy with
ADX Energy Ltd
Term of 2 years
commencing 1
July 2020.
Subsequently
monthly.
No written
agreement
Term of 2 years
commencing 1
July 2020.
Subsequently
monthly.
Amanda Sparks – Company
Secretary and Chief Financial
Officer
Ongoing
Base annual remuneration inclusive of
superannuation at 31/12/21
Technical consulting - $1,500 per day (cash)
Termination
benefit
2 months (up
to $18,000)
Corporate consulting - $500/month (cash)
plus options subject to Board and Shareholder
approval for additional work at a value of
$1,500 per day
2 months (up
to $18,000)
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)
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
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 Limited of GBP 12,000 per annum
Monthly retainer of $3,200, 50% paid in cash
and 50% paid in equity. Additional hours
above 20 hours per month are paid in cash at
$160 per hour.
None
- 37 -
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:
2022
Directors
I Tchacos
P Fink
A Childs
E Etienvre
Other KMP
A Sparks
TOTAL 2022
Post
Employment
Share Based
Share Based
Cash salary,
directors fees
and consulting
fees, including
accruals*
$
Superannuation
$
Shares (in lieu of
cash fees) (1)
$
Options (in lieu
of cash
consulting fees)
(1)
$
Total
$
318,743
345,221
29,932
228,564
62,680
985,140
2,952
-
3,143
-
8,093
14,188
3,750
3,750
-
74,677
14,400
96,577
73,125
51,609
-
-
-
124,734
398,570
400,580
33,075
303,241
85,173
1,220,639
(1) Share based payments. These represent the amount expensed in the year for Shares and Options in lieu of cash consulting fees.
* Includes accruals of fees paid subsequent to year end via equity.
Post
Employment
Share Based
Share Based
2021
Directors
I Tchacos
P Fink
A Childs
E Etienvre
TOTAL 2021
Cash salary,
directors fees
and consulting
fees, including
accruals*
$
290,372
318,297
30,069
82,518
721,256
Superannuation
$
Shares (in lieu of
cash fees) (1)
$
Options (in lieu
of cash
consulting fees)
(1)
$
Total
$
2,754
-
2,931
-
5,685
3,750
3,750
-
36,094
43,594
75,938
63,328
-
-
139,266
372,814
385,375
33,000
118,612
909,801
There were no performance related payments made during the year. Performance hurdles are not attached to
remuneration options.
- 38 -
ADX ENERGY LTD
DIRECTORS’ REPORT
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.
The following shares were granted as equity compensation benefits (in lieu of cash remuneration) to Directors during the
year.
Date Issued
8/02/2022
31/05/2022
31/05/2022
25/08/2022
30/11/2022
Number of Shares
902,728
154,253
3,185,543
4,741,208
2,680,384
Value based on
90 Day VWAP $
9,930
1,234
25,484
37,930
18,763
In lieu of part remuneration for
the quarter ended
31/12/2021
2021 Year
31/03/2022
30/06/2022
30/09/2022
11,664,116
93,341
Issued Subsequent to Year End
24/01/2023
Not yet issued
Summarised as:
Director
Ian Tchacos
Paul Fink
Andrew Childs
Edouard Etienvre
Issued during the year
357,140
8,971,429
2,500
62,800
31/12/2022
30/9/2022 and 31/12/2022
2022
Number of Shares
625,737
625,737
0
10,412,642
11,664,116
2022
$
5,000
5,000
-
83,341
93,341
The following shares were granted as equity compensation benefits (in lieu of cash remuneration) to other KMPs (Amanda
Sparks) during the year.
Date Issued
8/02/2022
31/05/2022
25/08/2022
30/11/2022
Issued Subsequent to Year End
24/01/2023
Number of Shares
436,364
600,000
600,000
685,714
2,322,078
685,714
Value based on
90 Day VWAP $
4,800
4,800
4,800
4,800
In lieu of part remuneration for
the quarter ended
31/12/2021
31/03/2022
30/06/2022
30/09/2022
19,200
4,800
31/12/2022
- 39 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Options:
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
8/02/2022
31/05/2022
31/05/2022
25/08/2022
Number of Options
2,801,479
747,575
5,337,890
4,992,187
Value based on
90 Day VWAP $
30,816
5,981
42,703
39,938
In lieu of part remuneration for
the quarter ended
31/12/2021
2021 Year
31/03/2022
30/06/2022
Issued Subsequent to Year End
24/01/2023
5,149,552
$ 36,047
31/12/2022
19,892,522
161,532
Summarised as:
Director
Ian Tchacos
Paul Fink
2022
Number of Options
11,474,024
8,418,498
2022
$
93,563
67,969
19,892,522
161,532
No other options were granted as equity compensation benefits to Directors and other Key Management Personnel.
Shares issued to Key Management Personnel on exercise of compensation options
During the year to 31 December 2022, 23,250,146 compensation options were exercised by Directors or other Key
Management Personnel (2021: 26,369,420). A summary of options exercised by Directors is as follows:
Ian Tchacos
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Paul Fink
Unlisted Options
Unlisted Options
Total exercised
Number
Exercise Price
Expiry Date
4,864,955
6,354,086
3,954,545
4,106,250
3,026,785
943,525
23,250,146
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
31/05/2023
31/05/2022
31/10/2023
31/01/2024
31/10/2025
31/01/2026
- 40 -
ADX ENERGY LTD
DIRECTORS’ REPORT
E. EQUITY HOLDINGS AND MOVEMENTS DURING THE YEAR
(a) Shareholdings of Key Management Personnel
Balance at
beginning of
the year
Options
exercised
Granted as
remuneration
Placement
On-market
Trades
(purchases)
On-market
Trades
(sales)
Balance at
end of the
year
Directors
I Tchacos
P Fink
A Childs
E Etienvre
Other KMPs
A Sparks
68,746,415
19,279,836
93,822,419
3,970,310
25,388,524
9,962,618
27,333,296
-
-
-
625,737
625,737
-
10,412,642
-
-
-
-
2,322,077
3,333,333
225,253,272
23,250,146
13,986,193
3,333,333
-
-
-
-
-
-
-
-
-
-
-
-
88,651,988
98,418,466
25,388,524
20,375,260
32,988,706
265,822,944
(b) Option holdings of Key Management Personnel
Balance at
beginning of
the year
Granted as
remuneration
Placement -
Options
Options
exercised
Options
expired
Directors
I Tchacos
52,620,757
11,474,024
3,026,785
8,418,498
P Fink
A Childs
E Etienvre
Other KMPs
-
-
A Sparks
1,928,572
-
-
-
-
1,666,666
(19,279,836)
(3,970,310)
-
-
-
-
-
-
57,576,114
19,892,522
1,666,666
(23,250,146)
F. OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Balance at
end of the
year
44,814,945
7,474,973
-
-
3,595,238
55,885,156
-
-
-
-
-
-
Not
exercisable
Exercisable
-
-
-
-
-
-
44,814,945
7,474,973
-
-
3,595,238
55,885,156
There were no other transactions with key management personnel during the year.
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 93.5% of “yes” votes on its Remuneration Report for the 2021 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
- 41 -
ADX ENERGY LTD
DIRECTORS’ REPORT
SUBSEQUENT EVENTS
Equity Issues in Lieu of Remuneration
On 24 January 2023, ADX issued the following shares and options. These amounts were accrued in the 31 December 2022
financial statements:
a.
b.
c.
357,140 shares issued pursuant to ADX’ Directors’ Share Plan, approved by Shareholders on 27 May 2022. The shares
were issued to directors in consideration of remuneration elected to be paid in shares for the quarter ended 31
December 2022 ($2,500).
5,569,673 shares issued to ADX’s Company Secretaries and consultants in consideration of remuneration elected to
be paid in shares for the quarter ended 31 December 2022 ($38,988).
5,149,552 Options granted to Directors Ian Tchacos and Paul Fink, as approved by Shareholders on 27 May 2022. The
options were granted in consideration of consultancy fees remuneration elected to be paid in options for the quarter
ended 31 December 2022 (value $36,047). The options have a nil exercise price and expire on 31 January 2027.
Exercise of Unlisted Options
On 27 February 2023, Director Ian Tchacos exercised 6,000,000 unlisted options with a nil exercise price, and Director
Paul Fink exercised 9,785,240 unlisted options with a nil exercise price.
There are no other matters or circumstances that have arisen since 31 December 2022 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 43 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 29th day of March 2023
- 42 -
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001
As lead auditor of the audit of ADX Energy Ltd for the year ended 31 December 2022, 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 Audit & Assurance Pty Ltd
Graham Webb
Director
29 March 2023
- 43 -
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 2022 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 2022.
This declaration is signed in accordance with a resolution of the Board of Directors.
Ian Tchacos
Executive Chairman
Dated this 29th day of March 2023
- 44 -
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
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
Impairment
Loss on disposal of plant and equipment
Total other expenses
Loss before income tax
Income tax benefit/(expense)
LOSS AFTER INCOME TAX
Loss is attributable to:
Owners of ADX Energy Ltd
Non-Controlling Interest
Note
2
2
2
2
9
Consolidated
Year ended
31 Dec 2022
$
14,452,734
(9,773,854)
4,678,880
5,057
Year ended
31 Dec 2021
$
9,637,007
(8,533,799)
1,103,208
78,248
(3,598,107)
(3,283,744)
(2,105,903)
(2,455,477)
(210,437)
(817,122)
(1,211)
(272,374)
-
(8,652)
(6,732,780)
(6,020,247)
(2,048,843)
(4,838,791)
4
(389,031)
492,527
(2,437,874)
(4,346,264)
(2,304,263)
(133,611)
(4,171,598)
(174,666)
17
(2,437,874)
(4,346,264)
Other comprehensive income
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)
18
Other comprehensive income for the year, net of tax
139,731
107,389
-
(433,977)
143,081
-
247,120
(290,896)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
(2,190,754)
(4,637,160)
Total comprehensive income is attributable to:
Owners of ADX Energy Ltd
Non-Controlling Interest
(2,093,716)
(97,038)
(4,278,568)
(358,592)
(2,190,754)
(4,637,160)
Earnings per share for loss attributable to the ordinary equity
holders of the Company:
Basic loss per share
5
Cents Per
Share
(0.07)
Cents Per
Share
(0.16)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
- 45 -
ADX ENERGY LTD
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
ASSETS
Current Assets
Cash and cash equivalents
Trade and 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
Borrowings
Lease liabilities
Current tax liabilities
Provisions
Total Current Liabilities
Non-Current Liabilities
Borrowings
Lease liabilities
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Capital and reserves attributable to owners of ADX Energy Ltd
Non-controlling interests
Total Equity
Consolidated
31 December
2022
$
31 December
2021
$
Note
6
7
8
7
9
10
4
11
12
13
4
14
12
13
14
15
16
17
3,569,631
2,090,945
883,199
6,543,775
5,938,517
2,820,819
1,086,842
9,846,178
1,137,797
23,675,687
239,640
1,066,393
830,976
23,866,044
356,545
1,237,277
26,119,517
26,290,842
32,663,292
36,137,020
2,336,041
592,336
130,761
233,807
347,640
3,640,585
4,885,542
3,212,532
129,700
-
312,203
8,539,977
592,336
156,025
15,875,114
1,175,064
273,607
14,463,215
16,623,475
15,911,886
20,264,060
24,451,863
12,399,232
11,685,157
84,105,646
4,121,084
(84,209,138)
4,017,592
8,381,640
81,435,632
3,675,722
(81,904,875)
3,206,479
8,478,678
12,399,232
11,685,157
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
- 46 -
ADX ENERGY LTD
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Issued
Capital
$
Reserves
$
Accumulated
Losses
$
Non-
controlling
Interest
Total
Equity
$
At 1 January 2021
74,334,593
6,419,852
(80,898,819)
8,837,270
8,692,896
Loss for the year
Other comprehensive income
Total comprehensive income for the year, net of
tax
Transfer of reserves to accumulated losses
Transactions with owners in their capacity as
owners:
Issue of share capital
Cost of issue of share capital
Share based payments
-
-
-
-
-
(4,171,598)
(174,666)
(4,346,264)
(106,970)
-
(183,926)
(290,896)
(106,970)
(4,171,598)
(358,592)
(4,637,160)
(3,165,542)
3,165,542
7,466,376
(365,337)
-
-
-
528,382
7,101,039
528,382
-
-
-
-
-
-
-
-
-
-
7,466,376
(365,337)
528,382
7,629,421
As at 31 December 2021
81,435,632
3,675,722
(81,904,875)
8,478,678 11,685,157
At 1 January 2022
81,435,632
3,675,722
(81,904,875)
8,478,678 11,685,157
Loss for the year
Other comprehensive income
Total comprehensive income for the year, net of
tax
Transactions with owners in their capacity as
owners:
Issue of share capital
Cost of issue of share capital
Share based payments
-
-
-
-
(2,304,263)
(133,611)
(2,437,874)
210,547
-
36,573
247,120
210,547
(2,304,263)
(97,038)
(2,190,754)
2,911,133
(241,119)
-
-
-
234,815
2,670,014
234,815
-
-
-
-
-
-
-
-
2,911,133
(241,119)
234,815
2,904,829
As at 31 December 2022
84,105,646
4,121,084
(84,209,138)
8,381,640 12,399,232
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
- 47 -
ADX ENERGY LTD
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated
Year ended
31 Dec 2022
$
Year ended
31 Dec 2021
$
Note
Cash flows from operating activities
Receipts in the ordinary course of activities
Payments to suppliers and employees, including for
exploration expensed
Government subsidies received
Interest received
Interest paid
Net cash flows from/(used in) operating activities
6(i)
15,385,930
10,131,820
(12,837,726)
(12,228,718)
1,236,230
5,057
(152,892)
3,636,599
171,688
258
(206,364)
(2,131,316)
Cash flows from investing activities
Payments for oil and gas properties
Government subsidies for oil and gas properties
Payments for exploration appraisal/development
Receipts from exploration partners and farmouts
Funds received on behalf of JV partner
Funds paid on behalf of JV partner
Other payments
Net cash flows from/(used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares and options
Payment of share issue costs
Repayment of loan notes
Bank loans
Repayment of bank loans
Cash secured for permits
Payment of lease liabilities (right of use assets)
Net cash flows from/(used in) financing activities
(5,765,139)
-
(139,854)
1,213,443
107,999
(181,253)
(64,805)
(4,829,609)
2,550,000
(140,300)
(2,625,000)
-
(629,614)
(227,151)
(117,727)
(1,189,792)
(679,887)
14,808
(146,079)
985,169
-
-
-
174,011
7,448,364
(522,848)
(875,000)
462,036
-
(540,725)
(121,787)
5,850,040
Net (decrease)/ increase in cash and cash equivalents
held
Net foreign exchange differences
Add opening cash and cash equivalents brought forward
(2,382,802)
3,892,735
13,916
5,938,517
(98,687)
2,144,469
Closing cash and cash equivalents at the end of the year
6
3,569,631
5,938,517
The above consolidated statement of cashflows should be read in conjunction with the accompanying notes.
- 48 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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 (AUD), 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
Kathari Energia Limited – GBP
Kathari Energia GmbH – 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 statements have 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).
- 49 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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 2022.
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.
(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
option pricing model.
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.
Impairment of Oil and Gas Properties
For oil and gas properties, the expected future cash flow estimation is based on a number of factors, variables and
assumptions, the most important of which are estimates of reserves and resources, future production profiles,
commodity prices, costs and foreign exchange rates. These estimates may impact any impairment calculations.
- 50 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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.
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.
- 51 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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
Kathari Energia Limited – GBP
AuDAX Energy Srl – EUR
ADX VIE GmbH – EUR
ADX Energy Panonia Srl – EUR
Kathari Energia GmbH – 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.
- 52 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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.
OPERATING REVENUE
Oil sales
Gas sales
Hedging gains/(losses), net
Government subsidies
Other operating revenue (including reimbursements)
COST OF GOODS SOLD
Operating costs
Depreciation
Amortisation of asset retirement obligation assets
- 53 -
Consolidated
Year Ended
31 Dec 2022
$
Year Ended
31 Dec 2021
$
9,873,014
4,578,156
14,451,170
(630,812)
12,088
620,288
8,201,903
895,078
9,096,981
(1,256,513)
1,237,155
559,384
14,452,734
9,637,007
7,451,979
2,124,200
197,675
5,705,718
2,622,626
205,455
9,773,854
8,533,799
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated
Year Ended
31 Dec 2022
$
Year Ended
31 Dec 2021
$
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 – performance rights for employees
Less: prior period accrued share based payments
Add: accrued share based payments issued/to be issued after
period end
Net foreign exchange losses/(gains)
Short term lease expenses
Depreciation – right of use assets
Defined contribution superannuation/pension expense
Other administration, personnel and corporate expenses
3(a)
Less: project cost recoveries
OTHER EXPENSES – Finance costs:
Interest expense
Accretion
Right of use assets – interest
NOTE 3 – EQUITY-BASED PAYMENTS
429,665
42,000
23,463
495,128
(90,538)
140,334
44,033
39,553
115,517
118,719
3,928,520
4,791,266
358,971
18,114
322,602
699,687
(111,681)
90,808
14,724
47,257
120,066
137,825
3,595,333
4,594,019
(1,193,159)
(1,310,275)
3,598,107
3,283,744
139,947
68,357
2,133
210,437
202,049
68,647
1,678
272,374
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
the Black-Scholes option pricing 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.
- 54 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 3 – EQUITY-BASED PAYMENTS – continued
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).
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
Expensed against issued capital:
Share-based payments – Options in lieu of capital raising costs
Share-based payments – Shares in lieu of capital raising costs
Expensed in the profit and loss:
Share-based payments – Employee Performance Rights
Shares and Options issued in lieu of fees:
Share-based payments – Shares Issued to Directors
Share-based payments – Options Issued to Directors
Share-based payments – Shares Issued to other KMPs
Share-based payments – Shares Issued to consultants
Share-based payments – Shares Issued for other services
Note
3(b)(v)
3(b)(v)
Consolidated
Year Ended
31 Dec 2022
$
Year Ended
31 Dec 2021
$
49,820
51,000
100,820
7,217
-
7,217
3(b)(vi)
23,463
322,602
3(b)(i)
3(b)(ii)
3(b)(iii)
3(b)(iii)
3(b)(iv)
93,341
161,532
19,200
155,592
42,000
495,128
71,609
198,563
19,200
69,599
18,114
699,687
- 55 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 3 – EQUITY-BASED PAYMENTS – continued
(b) Summary of equity-based payments granted during the year:
(i)
Shares granted to Directors pursuant to ADX’ Directors’ Share Plan, approved by Shareholders on 27 May
2022 as follows:
Date Issued
08/02/2022
31/05/2022
31/05/2022
25/08/2022
30/11/2022
Issued Subsequent to
Year End
24/01/2023
Not yet issued
Summarised as:
Director
Ian Tchacos
Paul Fink
Andrew Childs
Edouard Etienvre
Issued during the year
Number of
Shares
902,728
154,253
3,185,543
4,741,208
2,680,384
11,664,116
357,140
8,971,429
2022
Number of
Shares
625,737
625,737
-
10,412,642
11,664,116
Value based on 90
Day VWAP $
9,930
1,234
25,484
37,930
18,763
In lieu of part remuneration for
the quarter ended
31/12/2021
31/12/2021
31/3/2022
30/06/2022
30/09/2022
93,341
2,500
62,800
31/12/2022
30/9/2022 and 31/12/2022
2022
Remuneration
value $
5,000
5,000
-
83,341
93,341
2021
Number of
Shares
650,790
650,790
-
8,527,328
9,828,908
2021
Remuneration
value $
5,000
5,000
-
61,609
71,609
(ii)
Options granted to Directors pursuant to ADXs’ Performance Rights and Option Plan, approved by
Shareholders on 27 May 2022 as follows:
Date Issued
08/02/2022
31/05/2022
31/05/2022
25/08/2022
30/11/2022
Number of
Options
2,801,479
747,575
5,337,890
4,992,187
6,013,391
19,892,522
Value based on 90
Day VWAP $
30,817
5,981
42,703
39,937
42,094
161,532
In lieu of part remuneration for
the quarter ended
31/12/2021
31/12/2021
31/3/2022
30/06/2022
30/09/2022
Issued Subsequent to
Year End
24/01/2023
Summarised as:
Director
Ian Tchacos
Paul Fink
5,149,552
36,047
31/12/2022
2022
Number of
Options
11,474,024
8,418,498
19,892,522
2022
Remuneration
value $
93,563
67,969
2021
Number of
Options
16,146,725
10,089,286
2021
Remuneration
value $
119,438
79,125
161,532
26,236,011
198,563
- 56 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 3 – EQUITY-BASED PAYMENTS – continued
(b)
Summary of equity-based payments granted during the year - continued:
(iii)
Shares to consultants and company secretaries in lieu of remuneration:
Date Issued
08/02/2022
31/05/2022
25/08/2022
30/11/2022
Number of Shares
$
4,063,751
5,257,511
7,029,146
5,202,485
21,552,893
42,577
41,596
54,779
35,840
174,792
In lieu of part remuneration for
the quarter ended
31/12/2021
31/3/2022
30/06/2022
30/09/2022
Issued Subsequent to
Year End
24/01/2023
Summarised as:
Other KMPs
Amanda Sparks
Consultants
Other consultants
Issued during the year
5,569,673
38,988
31/12/2022
2022
Number of
Shares
2022
Remuneration
value $
2021
Number of
Shares
2021
Remuneration
value $
2,322,077
19,200
2,499,047
19,230,816
21,552,893
155,592
174,792
10,102,754
12,601,801
19,200
69,599
88,799
(iv)
(v)
(vi)
On 18 May 2022, ADX issued 5,250,000 shares ($42,000) in consideration for investor relation services.
On 10 August 2022, ADX granted 15,000,000 options to the lead manager of ADX’s Placement in accordance
with the Lead Managers Mandate. Value $49,820. These options have an exercise price of 1.3 cents and
expire 10 August 2024. In addition, the Lead Manager received 8,500,000 Shares ($51,000) in lieu of part
brokerage fees. These Shares were issued on the same terms as the Placement Shares and received one (1)
free attaching unlisted option was issued for every two (2) Shares (4,250,000 Options). The exercise price of
the Options is $ 0.013 with an expiry date of 10 August 2024.
In the prior year, on 10 September 2021, ADX granted 46,086,012 performance rights to employees in Vienna,
Austria. On 1 April 2022, 43,258,177 rights vested into fully paid shares and 2,827,835 rights lapsed. These
rights were valued at $322,602 (based on the share price of $ 0.007 at the date of granting the rights). An
adjustment of $23,463 was recorded during the year to reflect the price at the date the shares were issued
for local overseas tax purposes.
- 57 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 3 – EQUITY-BASED PAYMENTS – continued
(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
2022
Number
12 Months to
31 December
2022
WAEP $
12 Months to
31 December
2021
Number
12 Months to
31 December
2021
WAEP $
Outstanding at the beginning of year
Granted to Directors during the year
Granted to others during the year
Lapsed during the year
Lapsed during the year
60,035,042
19,892,522
15,000,000
(4,387,500)
-
Exercised during the year
(23,250,146)
Exercised during the year
Outstanding at the end of the year
Exercisable at year end
-
67,289,918
67,289,918
0.001
68,680,951
0.0019
Nil
26,236,011
0.013
0.015
-
Nil
-
0.003
0.003
4,387,500
(5,000,000)
(2,500,000)
(26,369,420)
(5,400,000)
60,035,042
60,035,042
Nil
0.015
0.013
0.008
Nil
0.008
0.001
0.001
The weighted average share price for options exercised during the year was $Nil (2021: $0.0014).
(d) Weighted average fair value
The weighted average fair value of equity-based payment options granted during the year was $0.006 (2021: $0.0067).
(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
$0.013 (2021: $nil to $0.015).
(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 2.32 years (2021: 2.31years).
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
- 58 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 4 - INCOME TAX EXPENSE - continued
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.
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 loss before income tax multiplied by the Company’s
applicable income tax rate is as follows:
Loss for year before tax
Prima facie income tax (benefit) @ 30%
Tax effect of non-deductible items
Tax rate differential
Windfall tax - Austria
Translation differences
Deferred tax assets not brought to account
Consolidated
Year Ended
31 Dec 2022
$
Year Ended
31 Dec 2021
$
(2,048,843)
(614,653)
(4,838,791)
(1,451,637)
616,040
(38,763)
178,777
16,441
231,189
124,286
103,952
-
46,937
683,935
Income tax expense/(benefit) attributable to operating result
389,031
(492,527)
- 59 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 4 - INCOME TAX EXPENSE - continued
Consolidated
Year Ended
31 Dec 2022
$
Year Ended
31 Dec 2021
$
(b) Deferred tax assets not recognised relate to the following:
Tax losses
14,642,907
14,666,090
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
Less: Offset Deferred Tax Liabilities
Temporary differences - Oil and gas properties, net of JV
Temporary differences - Asset retirement obligations
Temporary differences - Other
(d) Franking Credits
The franking account balance at year end was $nil (2021: $nil).
(e) Tax Consolidation Legislation
-
1,118,269
70,342
(6,185)
(60,916)
(55,117)
1,066,393
281,092
1,309,604
109,821
(374,176)
-
(89,064)
1,237,277
ADX Energy Ltd and its 100% owned Australian subsidiaries have not formed a tax consolidated group.
- 60 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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.
Basic loss per share attributable to members of ADX Energy Ltd
Consolidated
Year Ended
31 Dec 2022
Cents
Year Ended
31 Dec 2021
Cents
(0.07)
$
(0.16)
$
Loss attributable to ordinary equity holders of the Company used in
calculating:
- basic earnings per share
(2,304,263)
(4,171,598)
Weighted average number of ordinary shares outstanding during the year
used in the calculation of basic earnings per share
3,213,048,798
2,553,707,139
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.
- 61 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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 2022
$
Year Ended
31 Dec 2021
$
3,569,631
5,938,517
Cash includes $0.83 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
Impairment of wells
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) borrowings
Increase/(decrease) in deferred tax liabilities
Increase/(decrease) in provisions
(2,437,874)
(4,346,264)
2,437,392
817,122
1,211
44,033
495,128
68,357
777,458
(84,820)
170,884
194,958
233,808
-
-
918,942
2,948,147
-
8,652
14,724
699,687
68,647
(1,074,543)
(97,918)
167,451
(112,936)
-
(27,655)
(639,388)
260,080
Net cash flows used in operating activities
3,636,599
(2,131,316)
(ii) Non-Cash Financing and Investing Activities
Fees paid to the lead manager of the placement included shares and options valued at $100,820 (refer note
3(b)(iv)).
There were no other non-cash financing or investing activities during the year (2021: none). Non-cash operating
activities, consisting of shares and options granted in lieu of remuneration are disclosed in note 3.
- 62 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 7 – TRADE AND 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
Cash secured for credit cards
Other (2021: primarily foreign government subsidies receivable)
Total current receivables
Consolidated
Year Ended
31 Dec 2022
$
Year Ended
31 Dec 2021
$
1,371,408
1,190,387
55,225
536,505
20,000
107,807
63,635
239,904
20,000
1,306,893
2,090,945
2,820,819
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 24. Receivables do not contain past due or
impaired assets as at 31 December 2022 (2021: none).
Non-Current
Cash secured for bank loans and licences
Prepayments
Consolidated
Year Ended
31 Dec 2022
$
Year Ended
31 Dec 2021
$
1,072,992
64,805
1,137,797
830,976
-
830,976
EUR 120,000 (AUD 188,709) is held as security for bank loans – refer note 12. The remaining EUR 562,316 (AUD
884,283) is secured for the Group’s AGS licences in Austria.
NOTE 8 – INVENTORIES
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.
Drilling inventories
Oil and gas inventories
Materials and consumables
Total current inventories
- 63 -
Consolidated
Year Ended
31 Dec 2022
$
473,178
58,806
351,215
883,199
Year Ended
31 Dec 2021
$
761,640
21,412
303,790
1,086,842
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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 majority of the Oil and Gas equipment
is depreciated over 8.3 years.
Impairment: Oil and gas properties are assessed for impairment on a cash-generating unit (CGU) basis. Individual assets
within a CGU may become impaired if their ongoing use changes or if the benefits to be obtained from ongoing use
are likely to be less than the carrying value of the individual asset.
Consolidated
Year Ended
31 Dec 2022
$
Year Ended
31 Dec 2021
$
296,672
177,793
265,259
3,723,913
4,647,644
1,441,571
4,588,376
21,132
331,264
176,351
333,519
4,460,030
6,527,211
1,446,983
2,473,884
31,501
8,513,327
23,675,687
8,085,301
23,866,044
331,264
(36,338)
1,746
296,672
176,351
1,442
177,793
381,308
(37,383)
(12,661)
331,264
190,835
(14,484)
176,351
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
Depreciation
Translation differences
Undeveloped Land – opening balance
Translation differences
- 64 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 9 – OIL AND GAS PROPERTIES - continued
Field office fixtures and equipment – opening balance
Additions
Disposals
Depreciation
Translation differences
Consolidated
Year Ended
31 Dec 2022
$
Year Ended
31 Dec 2021
$
333,519
-
(1,287)
(67,913)
940
265,259
391,087
27,576
-
(68,625)
(16,519)
333,519
Plant and machinery – opening balance
4,460,030
5,392,632
Additions
Disposals
Depreciation
Translation differences
Wells – opening balance
Additions
Depreciation
Impairment
Translation differences
During the year, $817,122 of impairment was recorded for wells that are no
longer economic. These wells have not been abandoned and may become
economic in the future.
Retirement obligation assets (Austria) – opening balance
Additions
Amortisation
Translation differences
Construction in progress – opening balance
Additions
Translation differences
- 65 -
-
-
(752,634)
16,517
3,723,913
6,527,211
196,132
16,599
(8,470)
(826,452)
(114,279)
4,460,030
8,078,874
259,458
(1,256,963)
(1,680,247)
(817,122)
(1,614)
4,647,644
-
(130,874)
6,527,211
1,446,983
187,795
(197,675)
4,468
1,441,571
2,473,884
2,168,855
(54,363)
4,588,376
1,685,278
-
(205,455)
(32,840)
1,446,983
69,647
2,434,687
(30,450)
2,473,884
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 9 – OIL AND GAS PROPERTIES - continued
Rights and other intangible assets – opening balance
Additions
Depreciation
Translation differences
Consolidated
Year Ended
31 Dec 2022
$
Year Ended
31 Dec 2021
$
31,501
-
(10,352)
(17)
21,132
15,631
26,430
(10,098)
(462)
31,501
Appraisal costs – Romania – opening balance
8,085,301
7,747,515
Additions
Additions – rehabilitation and restoration provision – note 14
Translation differences
253,618
108,507
65,901
8,513,327
179,251
538,138
(379,603)
8,085,301
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.
Non-Current Assets
Right of use assets - properties
Reconciliation of the carrying amount of right of use assets:
Opening balance
Depreciation
Translation differences
Refer to note 13 for lease liabilities for right of use assets.
Year Ended
31 Dec 2022
$
Year Ended
31 Dec 2021
$
239,640
356,545
356,545
(115,517)
(1,388)
239,640
484,880
(120,066)
(8,269)
356,545
- 66 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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 (mark to market)
The Group’s exposure to interest rate risk is discussed in Note 24.
NOTE 12 – BORROWINGS
Consolidated
Year Ended
31 Dec 2022
$
Year Ended
31 Dec 2021
$
2,336,041
4,766,865
-
-
12,945
105,732
2,336,041
4,885,542
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.
Bank Loans
As announced on 5 August 2020, ADX’ Austrian subsidiary, ADX VIE GmbH, secured banking facilities totalling EUR
1,130,000 from Volksbank Wien AG (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:
-
-
Loan A - EUR 500,000 (A$ 786,287): 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
Loan B - EUR 630,000 (A$ 990,722): incurring interest at 1% per annum on the drawn down value.
• The Collateral for the loan facilities is EUR 120,000 (A$ 188,709) (held in an ADX VIE GmbH bank account with
Volksbank).
• The loans are fully drawn. Loan repayments commenced on 30 June 2022 and continue to be repaid every six
months through to 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 376,666 (A$ 629,614) of these loans have been repaid.
- 67 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 12 – BORROWINGS - continued
Current
Loan notes – interest bearing
Bank loans – Loan A - interest bearing
Bank loans – Loan A - non-interest bearing
Bank loans – Loan B - interest bearing
Non-Current
Bank loans – Loan A - interest bearing
Bank loans – Loan A - non-interest bearing
Bank loans – Loan B - interest bearing
Consolidated
Year Ended
31 Dec 2022
$
Year Ended
31 Dec 2021
$
-
2,625,000
262,096
-
330,240
592,336
262,096
-
330,240
592,336
-
259,970
327,562
3,212,532
-
519,940
655,124
1,175,064
During the year, the Loan notes were repaid in full.
The Group’s exposure to liquidity and interest rate risk is discussed in Note 24.
NOTE 13 – LEASE LIABILITIES
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.
- 68 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 13 – LEASE LIABILITIES - continued
Current
Right of use assets
Other
Non-Current
Right of use assets
Other
NOTE 14 – PROVISIONS
Consolidated
Year Ended
31 Dec 2022
$
Year Ended
31 Dec 2021
$
120,462
10,299
130,761
119,819
36,206
156,025
129,700
-
129,700
273,607
-
273,607
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.
- 69 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 14 – PROVISIONS - continued
Current
Provision for employee entitlements
Non-Current
Provision for employee entitlements
Consolidated
31 December
2022
$
31 December
2021
$
347,640
312,203
16,793
15,231
Provision for asset retirement obligations (ARO) – production assets
15,207,275
13,909,846
Provision for rehabilitation and restoration – Romania
651,046
538,138
15,875,114
14,463,215
Provision for asset retirement obligations (non-current) – opening balance
Additions
Accretion
Translation differences
13,909,846
1,069,739
68,357
159,333
Provision for asset retirement obligations (non-current) – closing balance
15,207,275
Provision for rehabilitation and restoration – Romania – opening balance
Additions - note 9
Translation differences
Provision for rehabilitation and restoration – Romania – closing balance
538,138
108,507
4,401
651,046
13,969,628
227,409
68,647
(355,838)
13,909,846
-
538,138
-
538,138
NOTE 15 – ISSUED CAPITAL
31 December
2022
$
31 December
2021
$
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
84,105,646
81,435,632
- 70 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 15 – ISSUED CAPITAL - continued
(b) Movements in Ordinary Share Capital
Number of
Shares Summary of Movements – Prior Year (2021)
1,958,299,849 Opening balance 1 January 2021
500,000,951
9,828,908
12,601,801
Issue of Shares under Share Purchase Plan
Issue of shares to Directors
Issue of shares to Co Secs and Consultants
1,500,000 Shares issued to advisor (non-cash)
1,030,620 Shares issued to advisor (non-cash)
12,500,000 Shares issued to advisor (cash) at $0.008
167,605,653 Exercise of Unlisted Options at $0.008
26,369,420 Exercise of Unlisted Options at Nil
284,700,000 Placement at $0.01
Costs of share issues – cash
Costs of share issues – non-cash
2,974,437,202 Closing Balance as at 31 December 2021
Number of
Shares Summary of Movements – Current Year (2022)
2,974,437,202 Opening balance 1 January 2022
902,728
436,363
3,627,388
Issue of shares to Directors (part remuneration for 12/2021
quarter)
Issue of shares to Company Secretary (remuneration for 12/2021
quarter)
Issue of shares to Consultants (remuneration for 12/2021 quarter)
43,258,177 Shares issued upon exercise of Performance Rights
23,250,146 Options exercised by Directors at $Nil
5,250,000 Shares issued to advisor (cash)
154,253
3,185,543
600,000
4,657,511
Issue of shares to Directors (part remuneration for 12/2021
quarter)
Issue of shares to Directors (part remuneration for 3/2022 quarter)
Issue of shares to Company Secretary (remuneration for 3/2022
quarter)
Issue of shares to Consultants (remuneration for 3/2022 quarter)
425,000,000 Placement at 6 cents
8,500,000
4,741,208
600,000
6,429,146
2,680,384
685,714
4,516,771
Issue of shares in lieu of broker fees (non-cash)
Issue of shares to Directors (part remuneration for 6/2022 quarter)
Issue of shares to Company Secretary (remuneration for 6/2022
quarter)
Issue of shares to Consultants (remuneration for 6/2022 quarter)
Issue of shares to Directors (part remuneration for 9/2022 quarter)
Issue of shares to Company Secretary (remuneration for 9/2022
quarter)
Issue of shares to Consultants (remuneration for 9/2022 quarter)
Costs of share issues – non-cash
Costs of share issues – cash
Note
3(b)(i)
3(b)(iii)
3(b)(iii)
3(b)(vi)
15(c)(ii)
3(b)(iii)
3(b)(i)
3(b)(i)
3(b)(iii)
3(b)(iii)
15(b)(i)
3(b)(v)
3(b)(i)
3(b)(iii)
3(b)(iii)
3(b)(i)
3(b)(iii)
3(b)(iii)
3(b)(v)
3,512,912,534 Closing Balance as at 31 December 2022
- 71 -
2021
$
74,334,593
3,000,006
71,609
88,799
8,839
9,276
100,000
1,340,848
-
2,847,000
(358,121)
(7,217)
81,435,632
2022
$
81,435,632
9,930
4,800
37,777
-
-
42,000
1,234
25,484
4,800
36,796
2,550,000
51,000
37,930
4,800
49,979
18,763
4,800
31,041
(100,820)
(140,300)
84,105,646
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 15 – ISSUED CAPITAL - continued
(b) Movements in Ordinary Share Capital - continued
(i)
Placement Raising A$ 2.55 million
On 10 August 2022, ADX raised $ 2.55 million from a placement of 425,000,000 shares at a price of $ 0.006 per
share to sophisticated, institutional and professional investors (the Placement). One (1) free attaching unlisted
option was issued for every two (2) Placement Shares. The exercise price of the Placement Options is $ 0.013 with
an expiry date of 10 August 2024.
Note
15(c)(iii)
(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
Unlisted Options
Unlisted Options
Unlisted Options
Total Options
During the year:
Number
67,500,020
6,000,000
6,078,125
231,750,000
5,116,071
7,250,000
3,145,833
2,456,250
3,294,642
1,857,954
6,085,465
4,992,187
6,013,391
351,539,938
Exercise Price
$ 0.015
$ nil
$ nil
$ 0.013
$ nil
$ nil
$ nil
$ nil
$ nil
$ nil
$ nil
$ nil
$ nil
Expiry Date
26/11/2023
26/06/2024
31/07/2024
10/08/2024
31/10/2024
31/01/2025
31/05/2025
31/07/2025
31/10/2025
31/01/2026
31/05/2026
31/07/2026
31/10/2026
(i)
(ii)
(iii)
(iv)
19,892,522 unlisted options were granted in lieu of remuneration to Directors Ian Tchacos and Paul Fink. Refer
note 3(b)(ii).
23,250,146 unlisted options were exercised by Directors (exercise price was nil as these were previously granted
in lieu of remuneration).
212,500,000 unlisted options were issued for every two shares subscribed for in August 2022 Placement, and
19,250,000 unlisted options were issued as part of brokerage fees.
67,500,020 unlisted options with an exercise price of $0.01, 4,387,500 unlisted options with an exercise price of
$0.015 and 142,350,000 unlisted options with an exercise price of $0.015 lapsed during the year.
(d) Performance Rights on issue at year end
Unlisted Performance Rights
2022
Number
-
201
Number
46,086,012
In the prior year, on 10 September 2021, ADX granted 46,086,012 performance rights to employees in Vienna,
Austria. On 1 April 2022, 43,258,177 rights vested into fully paid shares and 2,827,835 rights lapsed.
- 72 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 15 – ISSUED CAPITAL - continued
(e) 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.
(f) 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.
Consolidated
31 December
2022
$
31 December
2021
$
5,724,244
(1,603,160)
-
5,489,429
(1,706,318)
(107,389)
4,121,084
3,675,722
5,489,429
234,815
5,724,244
4,961,047
528,382
5,489,429
(1,706,318)
103,158
(1,603,160)
(1,456,267)
(250,051)
(1,706,318)
NOTE 16 - RESERVES
Share-based payments reserve
Foreign currency translation reserve
Hedging reserve – refer note 18
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:
The foreign currency translation reserve is used to record exchange
differences arising from the translation of the financial statements of
foreign subsidiaries.
- 73 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 17 – NON-CONTROLLING INTERESTS
Non-Controlling Interests
Movement during the year:
Balance at the beginning of the year
Share of loss for the period
Share of other comprehensive gain/(loss)
Balance at the end of the year
Consolidated
31 December
2022
$
8,381,640
31 December
2021
$
8,478,678
8,478,678
(133,612)
36,574
8,381,640
8,837,270
(174,666)
(183,926)
8,478,678
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.
As at 31 December 2022, Reabold holds a 50.82% interest in Danube (2021: 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.
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 Profit or Loss and Other Comprehensive
Income
Revenue
Loss for the period
Other comprehensive income/(loss)
Total comprehensive loss
Consolidated
31 December
2022
$
603,901
(199,450)
404,451
15,613,993
(651,046)
14,962,947
31 December
2021
$
1,079,396
(26,613)
1,052,783
14,505,560
-
14,505,560
15,367,398
15,558,343
-
(262,911)
71,968
(190,943)
-
(343,696)
(361,915)
(705,611)
Loss allocated to Non-Controlling Interests
(133,612)
(174,666)
Other comprehensive gain/(loss) allocated to Non-Controlling Interests
36,574
(183,926)
- 74 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 17 – NON-CONTROLLING INTERESTS - continued
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 18 – DERIVATIVE FINANCIAL INSTRUMENTS
The Group’s accounting policy for cash flow hedges are as follows:
Consolidated
31 December
2022
$
31 December
2021
$
76,903
(253,618)
-
(45,469)
(222,184)
93,147
(179,346)
-
(11,914)
(98,113)
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.
•
Recognition date: At the date the instrument is designated as a hedging instrument.
•
• 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.
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.
- 75 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 18 – DERIVATIVE FINANCIAL INSTRUMENTS - continued
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 adjustments
Movement for the year
Balance at the end of the year
As at 31 December 2022, there were no derivative financial instruments in place.
NOTE 19 – 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
Loss for the year
Comprehensive income for the year
Consolidated
31 December
2022
$
107,389
(107,389)
-
(107,389)
-
31 December
2021
$
250,470
(190,775)
47,694
(143,081)
107,389
Company
31 December
2022
$
31 December
2021
$
780,526
3,089,249
(415,353)
(16,792)
4,554,541
1,636,776
(3,156,611)
(15,231)
3,437,630
3,009,475
84,105,646
5,724,245
81,435,632
5,368,137
(86,392,261)
(83,794,294)
3,437,630
3,009,475
(2,597,967)
(2,597,967)
(3,841,961)
(3,841,961)
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.
- 76 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 19 – PARENT ENTITY INFORMATION - continued
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
Kathari Energia Limited
Kathari Energia GmbH
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Italy
Australia
UK
Austria
UK
Romania
UK
Austria
31 December 2022
100%
31 December 2021
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
100%
Held 100% by
Kathari Energia
Limited
100%
-
Kathari Energia GmbH was incorporated during the year.
Refer to note 17, non-controlling interests, for details on Danube Petroleum Limited Group.
NOTE 20 – COMMITMENTS AND CONTINGENCIES
(a)
Short term 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
2022
$
31 December
2021
$
399,170
1,240
400,410
-
-
-
Short term leases are primarily for the early production unit for Anshof operations in upper Austria which expires in
September 2023.
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. Land leases in Austria are held by an unrelated
party and reimbursed by ADX. These amount to approximately EUR 51,000 per annum (A$ 81,000) and comprise
approximately 95 individual lease contracts, and have no end date or termination date.
- 77 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 20 – COMMITMENTS AND CONTINGENCIES - continued
Parta Exploration License and Iecea Mare Production License - Western 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’ EX 10 Parta license (Parta
Permit). The committed work program agreed in June 2019 for the Parta Permit required 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 the National Agency of
Mineral Resources (NAMR), which was extended for another 18 months until 3 December 2022. ADX Energy Panonia SRL
is the Romanian license holder in accordance with the concession agreement for exploration phase 1. The total concession
agreement duration is 20 years with a possible 15 years extension. After phase 1 which expired on 3 December 2022, ADX
had the option to immediately enter phase 2, by assuming further commitments, or apply for another extension which will
require a government ratified approval. ADX has chosen the second option and is in constructive discussions with the
governing body i.e. NAMR which will submit the extension application to the government.
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 from the license seller Amromco Energy 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 has to be agreed with the Romanian government (via NAMR), which then becomes a
commitment. ADX estimates the annual cost for such activities may be approximately $50,000 per annum.
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 oil and gas activities in 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
a license fee as a function of the active AGS license areas for up to 5 years. In 2022, the fee paid to RAG under the DUA
was EUR 50,559.
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 on behalf of the Republic of Austria.
Effective on 1st April 2022, ADX successfully was awarded license extensions for the Upper Austria AGS license areas ADX-
AT-I and ADX-AT-II resulting in a total area of 1022 km2. In order to secure these licenses and the related work program,
ADX VIE GmbH had to put in place a bank guarantee for an amount of EUR 937,378 (of which EUR 562,316 is secured by
cash). The total term for the Upper Austria AGS licenses including the newly awarded extension area is 16 years without
any relinquishment and the first 4-year firm period commenced on 1st January 2021. ADX has a 3 well exploration drilling
commitment during the 4-year firm period. The total remaining minimum financial obligation to keep the Upper Austria
AGS licenses in good standing taking into account expenditures already made in relation to the drilling of the Anshof-3
discovery well is EUR 1.25 million.
- 78 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 20 – COMMITMENTS AND CONTINGENCIES - continued
Anshof Prospect in Upper Austria - Farmin
In November 2021, ADX signed a farm-in agreement with Xstate Resources Limited (Xstate) to partially fund the drilling of
the Anshof prospect in the ADX-AT-II exploration license in Upper Austria (Farmin HOA). Under the terms of the Farmin
HOA, Xstate has funded 40% of the Anshof well drilling expenditure up to a cap amount of EUR 1.8 million (EUR 720,000
net to Xstate) to earn a 20% economic interest in the Anshof Prospect Area. Xstate satisfied its funding commitments by
funding 40% of the Anshof well drilling expenditures and has earned an economic interest in the Anshof Prospect Area.
Xstate has elected not to fund 40% of a second well in Anshof or the Anshof Farmin Area to earn a 20% economic interest
in the entire Anshof Farmin Area (Second Well Funding). As a result of the abovementioned election Xstate only has
economic rights in relation to the Anshof Prospect Area, not the entire Anshof Farmin Area.
ADX and Xstate have agreed to enter into a production sharing agreement (PSA) and a cooperation agreement (CA) which
will cover the conduct of ongoing operations and sharing of production from the Anshof Prospect Area.
Welchau Prospect in Upper Austria - Farmin
On the 29th of November 2022, ADX announced an investment agreement with Kepis & Pobe Financial Group Inc., (KPFG)
a leading Canadian energy finance and development group. KPFG committed to fund 50% of the Welchau-1 well costs to
earn a 20% economic interest in the Welchau farmin area which includes the giant Welchau gas prospect (807 BCFE).
Subsequently, KPFG satisfied completion conditions, including the payment of initial funds for long lead items during the
first quarter of 2023. As announced on 23 January 2023, KPFG assigned its interest in the investment agreement to TSXV
listed MCF Energy Ltd (MCF). The initial payments received comprise EUR 197,000 for 50% of the predrill costs as well as
payment of a non-refundable option fee of EUR 100,000 for an option to earn a further 20% economic interest by funding
a further 50% of the Welchau-1 well costs (Option). After the reporting date, MCF elected not to exercise the Option.
Other contingencies
d363 C.R-.AX license – Italy
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 further advised that the suspension will
be extended to the first quarter of 2021. Due to the COVID-19 pandemic the suspension of exploration activities were
further extended.
During the reporting period the Italian licensing authorities offered ADX the opportunity to ratify d363 C.R-.AX prospecting
license. The ratification is subject to a number of conditions including that only the gas potential within its d363C.R-.AX
license is commercially exploited. ADX submitted a report to the Italian authorities detailing the natural gas prospectivity
of the license for gas, upon which the licensing authorities reactive positively and asked ADX to submit a new work program
suitable for exploration and development of the offshore gas resources. Based on discussions with the authorities a
detailed report and work commitment was submitted in October 2022. The commitment for the first 3 years will consist
of, subject to a pending approval:
150 km of seismic data purchase from ENI and Total with a minimum expenditure of EUR 70,000;
2D and 3D seismic reprocessing with a minimum expenditure of EUR 40,000; and
Acquisition of new 2D seismic of 150 line km or 60 sqkm of 3D seismic, subject to the outcome of the
preceding reprocessing and interpretation work. The financial commitments is EUR 500,000.
It should be noted that after each year and fulfillment of the respective work, ADX can drop the license. In year 4, ADX can
elect to drill a well (with a commitment to reach 2500 metres total depth (TD)) or drop the license.
- 79 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 21 – KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Compensation of Key Management Personnel
Short-term employment benefits
Post-employment benefits
Share-based payments
(b) Other transactions and balances with Key Management Personnel
Consolidated
31 December
31 December
2022
$
985,140
14,188
221,311
1,220,639
2021
$
721,256
5,685
182,860
909,801
i)
Ian Tchacos, through Warroorah Pty Ltd ATF Tchacos Fund and Ian Z Tchacos, provides office premises to ADX
Energy Ltd. The key terms are gross monthly rental of $2,000 per month, monthly estimated outgoings of $279
per month (both excluding GST), lease commencing 1 August 2022 for a 12 month term, thereafter on 3 month
rolling terms. Rent review to be on 1 July of each year based on CPI. These terms are considered normal
commercial rates. Rental paid for the year (excluding GST) ended 31 December 2022 totalled $11,395 (2021: $Nil).
ii) Andrew Childs is the owner of Resource Recruitment. ADX Energy Ltd rented office premises in Subiaco, and paid
rent on a month by month basis at normal commercial rates to 31 July 2022. Rental paid for the year (excluding
GST) ended 31 December 2022 totalled $18,200 (2021: $31,200).
iii) Andrew Childs is Executive Chairman of Xstate Resources Limited (Xstate). Xstate holds a 20% economic interest
in ADX’ Anshof field in Upper Austria.
iv)
In October 2019, Company Secretary, Amanda Sparks, through the A & A Sparks S/F A/C, provided a $ 100,000
loan note to ADX Energy Ltd. The interest rate was 6%. These terms were considered normal commercial rates.
During the year, interest of $1,389 was paid, and the loan was fully repaid.
NOTE 22 - AUDITORS' REMUNERATION
Amount paid or due and payable to the auditor for:
Audit and review of the financial statements
Other services
Total remuneration of auditors
NOTE 23 – SEGMENT INFORMATION
Consolidated
31 December
31 December
2022
$
2021
$
50,500
-
50,500
53,609
-
53,609
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.
- 80 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 23 – SEGMENT INFORMATION - continued
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. All oil sales are made to a single customer in Austria, and all gas sales are made to a
single customer in Austria.
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 material 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
- 81 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 23 – SEGMENT INFORMATION - continued
Operating Segments
Year ended 31 December 2022
Revenue and income
Total segment revenue
Result
Segment result after tax
Reconciliation of segment profit after tax to net loss
after tax:
Unallocated revenue and income
Foreign currency gains/(losses)
Unallocated expenditure
Net loss after tax
Sicily
Channel
$
Romania
$
Austria
(Production)
Total
Operations
$
$
-
-
14,452,734
14,452,734
14,452,734
212,844
(268,417)
414,715
359,142
5,067
(44,033)
(2,758,040)
(2,437,874)
Depreciation, amortisation and impairment included in
segment result
-
-
3,254,514
3,254,514
Assets
Segment assets
Reconciliation of segment assets:
Unallocated cash
Other
Total assets
Liabilities
Segment liabilities
Reconciliation of segment liabilities:
Unallocated liabilities
Total liabilities
23,833
8,895,232
22,627,545
31,546,610
675,677
441,005
32,663,292
(5,220)
(675,883)
(19,145,945)
(19,827,048)
(437,012)
(20,264,060)
Capital expenditure for the year
Segment capital expenditure – oil and gas assets
Reconciliation of capital expenditure:
Unallocated additions
Total capital expenditure
-
253,618
2,552,782
2,806,400
-
2,806,400
- 82 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 23 – SEGMENT INFORMATION - continued
Operating Segments
Year ended 31 December 2021
Revenue and income
Total segment revenue
Result
Segment result after tax
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
Sicily
Channel
$
Romania
$
Austria
(Production)
Total
Operations
$
$
9,637,007
9,637,007
9,637,007
(31,172)
(383,940)
(1,525,775)
(1,940,887)
138,636
(14,723)
(2,529,290)
(4,346,264)
Depreciation, amortisation and impairment included in
segment result
-
-
2,948,147
2,948,147
Assets
Segment assets
Reconciliation of segment assets:
Unallocated cash
Other
Total assets
Liabilities
Segment liabilities
Reconciliation of segment liabilities:
Unallocated liabilities
Total liabilities
1,330
9,169,543
21,165,397
30,336,270
4,473,706
1,327,043
36,137,019
(5,147)
(564,751)
(20,710,122)
(21,280,020)
(3,171,843)
(24,451,863)
Capital expenditure for the year
Segment capital expenditure – oil and gas assets
Reconciliation of capital expenditure:
Unallocated additions
Total capital expenditure
-
179,251
2,764,750
2,944,001
-
2,944,001
- 83 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 24 – 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’ 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.
As at 31 December 2022, no derivative financial instruments were in place.
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 Euro (EUR). Operating revenue is invoiced in EUR but is indexed
to Dated Brent price which is denominated in United States Dollar (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 year end, 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.
- 84 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 24 – 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 (non-interest bearing)
Total
Liquidity risk
31 December 2022
$
31 December 2021
$
-
1,184,672
-
1,184,672
2,625,000
982,686
779,910
4,387,596
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 2022
Trade and other payables
Borrowings
Total
31 December 2021
Trade and other payables
Borrowings
Total
Total
$
Less than 1
Year
$
Between 1-5
Years
$
2,336,041
1,184,672
2,336,041
592,336
-
592,336
3,520,713
2,928,377
592,336
4,885,542
4,387,596
4,885,542
3,212,532
-
1,175,064
9,273,138
8,098,074
1,175,064
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 A+ (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.
- 85 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 25 - INTERESTS IN JOINT OPERATIONS
Interests in jointly controlled assets are reported in the financial statements by including the group’s share of assets
employed in the Joint Operations, the share of liabilities incurred in relation to the Joint Operations and the share of any
expenses and revenues in relation to the Joint Operations in their respective categories.
Principal
Activities
Austria – Anshof Prospect
Oil Production
ADX Group
% Interest
31 December
2022
80%
31 December
2021
n/a
The group has classified these as joint arrangements because under the terms of the agreements, all partners share in all
the assets employed in the joint arrangement, excluding the underlying permit, and are liable for all the liabilities of the
joint arrangement, according to their participating share.
The tables below provide summarised financial information for that joint operation. The information disclosed reflects the
amounts presented in the financial statements of the joint operation and not ADX Energy Ltd Group’s share of those
amounts (ie 100% of the Joint Operation).
Consolidated
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 Profit or Loss and Other Comprehensive
Income
Revenue
Loss for the period
Other comprehensive income/(loss)
Total comprehensive loss
31 December
2022
$
-
(151,392)
(151,392)
-
-
-
(151,392)
825,444
(151,392)
-
(151,392)
31 December
2021
$
-
-
-
-
-
-
-
-
-
-
-
- 86 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 26 - SUBSEQUENT EVENTS
Equity Issues in Lieu of Remuneration
On 24 January 2023, ADX issued the following shares and options. These amounts were accrued in the 31 December 2022
financial statements:
d.
e.
f.
357,140 shares issued pursuant to ADX’ Directors’ Share Plan, approved by Shareholders on 27 May 2022. The shares
were issued to directors in consideration of remuneration elected to be paid in shares for the quarter ended 31
December 2022 ($2,500).
5,569,673 shares issued to ADX’ Company Secretaries and consultants in consideration of remuneration elected to
be paid in shares for the quarter ended 31 December 2022 ($38,988).
5,149,552 Options granted to Directors Ian Tchacos and Paul Fink, as approved by Shareholders on 27 May 2022. The
options were granted in consideration of consultancy fees remuneration elected to be paid in options for the quarter
ended 31 December 2022 (value $36,047). The options have a nil exercise price and expire on 31 January 2027.
Exercise of Unlisted Options
On 27 February 2023, Director Ian Tchacos exercised 6,000,000 unlisted options with a nil exercise price, and Director
Paul Fink exercised 9,785,240 unlisted options with a nil exercise price.
There are no other matters or circumstances that have arisen since 31 December 2022 that have or may significantly affect
the operations, results, or state of affairs of the Group in future years.
- 87 -
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 2022, 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 other
explanatory information and the directors’ declaration.
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 2022 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.
- 88 -
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ADX ENERGY LTD (continued)
Key Audit Matter – Revenue. Refer to Note 2 to the
financial statements
How our Audit Addressed the Key Audit Matter
The Group
generated
revenue
of
$14,452,734
Our procedures over revenue included but were not limited
predominately from the sale of gas and oil.
to the following:
Revenue recognition is considered to be a key audit matter
• We documented and assessed the processes and
given the significance of revenue to the group’s results and
controls in place to recognize revenue;
performance.
• We verified a sample of oil and gas sales revenue
transactions and associated receipts to determine
they were accurately accounted for;
• We reviewed the accounting policy for revenue
recognition and ensured it was in accordance with
AASB 15 “Revenue”; and
• We assessed the appropriateness of the revenue
disclosures included in the financial report.
Key Audit Matter – Oil and Gas Properties. Refer to Note
How our Audit Addressed the Key Audit Matter
9 to the financial statements
The Group’s principal assets are oil and gas production
Our procedures over oil and gas properties included but
plant and equipment with a carrying value of
were not limited to the following:
$23,675,687 as at 31 December 2022 which represents
72% of the total assets of the Group.
• We verified a sample of additions to assure the
correct capitalisation process and the existence of
Management performed an annual assessment
for
the asset;
indicators of impairment.
• We reviewed management’s assessment for
impairment;
• We applied our knowledge of the business and
corroborated our work with publicly available
external information; and
• We assessed the appropriateness of the disclosures
included in the financial report.
- 89 -
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ADX ENERGY LTD (continued)
Key Audit Matter – Asset retirement obligations. Refer
How our Audit Addressed the Key Audit Matter
to Note 14 to the financial statements
The Group has a significant asset retirement obligation
Our procedures over the asset retirement obligation
provisions for the Austrian and Romanian oil and gas
provisions included but were not limited to the following:
properties.
• We reviewed management’s estimate, the
We do not consider the asset retirement obligation to be
useful lives and valuation of the assets forming
at a high risk of significant misstatement, however it is
part of the asset retirement obligation;
subject to a significant level of judgement and is material
in the context of the financial statements as a whole.
• We discussed with management as to the
regulatory
compliance
surrounding
the
retirement obligation;
• We reviewed the compliance of the accounting
treatment of the asset retirement obligation
with AASB 137 Provisions, Contingent Liabilities
and Contingent Assets, and
• We assessed the appropriateness of the
disclosures included in the financial report.
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 2022, 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.
- 90 -
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ADX ENERGY LTD (continued)
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.
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
2022.
In our opinion the remuneration report of ADX Energy Ltd for the year ended 31 December 2022 complies
with section 300A of the Corporations Act 2001.
- 91 -
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ADX ENERGY LTD (continued)
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 Audit & Assurance Pty Ltd
Graham Webb
Director
Dated 29 March 2023
- 92 -
ADX ENERGY LTD
ADDITIONAL SHAREHOLDER INFORMATION
Information as at 24 March 2023
a)
Substantial Shareholders (who have lodged notices with ADX Energy Ltd)
Name
None
Number of Shares Disclosed in
Substantial Holder Notice
b) Shareholder Distribution Schedule
Size of Holding
1 -
1,001 -
5,001 -
10,001 -
100,001
1,000
5,000
10,000
100,000
and over
Total Shareholders
Number of shareholders holding less
than a marketable parcel
Voting Rights
Number of
Shareholders
36
23
24
594
1,574
2,251
296
Number of
Ordinary Shares
3,011
75,896
212,235
45,321,790
3,489,011,655
3,534,624,587
Percentage of
Issued Capital
0.00
0.00
0.01
1.28
98.71
100.00
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)
(i)
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
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 or Performance Rights.
c)
Securities Subject to Escrow:
There are no securities subject to escrow.
- 93 -
ADX ENERGY LTD
ADDITIONAL SHAREHOLDER INFORMATION
d)
Twenty largest shareholders:
Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
EQUITY TRUSTEES LIMITED
JETOSEA PTY LTD
EONIA PTY LTD
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
1.
2.
3.
4. MR PAUL FINK
5.
6.
7.
8.
9. MR SYED KHALIL BIN SYED IBRAHIM
10. WARROORAH PTY LTD
11.
IRONSIDE PTY LTD
12. MR BRIAN THOMAS CLAYTON + MRS JANET CLAYTON
13. MOMENTIUS PTY LTD
14. MR FARIS SALIM CASSIM
15.
16.
17.
IRONSIDE PTY LTD
BOND STREET CUSTODIANS LIMITED
CUSTODIAL SERVICES LIMITED
MR ALAN GEORGE BROOKS + MRS PHILIPPA CLAIRE BROOKS
18.
19. MR TIMOTHY FRANCIS CLIVE MCDONNELL
20.
BRAZELL PTY LTD
Remaining Holders Balance
Shares on issue
e) Unlisted Options (Holders of more than 20%):
Unlisted Options
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
67,500,020
6,078,125
231,750,000
5,116,071
7,250,000
3,145,833
2,456,250
3,294,642
1,857,954
3,117,187
2,695,312
3,803,571
2,839,285
340,904,250
Exercise Price
1.5 cents
Nil cents
1.3 cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
- 94 -
Number of
Ordinary
Shares
447,560,681
117,576,813
111,499,336
108,382,276
75,415,904
50,000,000
46,678,594
43,320,884
40,000,000
38,664,160
35,152,220
33,333,333
32,612,041
29,522,000
28,309,523
26,150,355
25,000,000
24,500,000
24,500,000
23,839,500
% of
Issued
Capital
12.66
3.33
3.15
3.07
2.13
1.41
1.32
1.23
1.13
1.09
0.99
0.94
0.92
0.84
0.80
0.74
0.71
0.69
0.69
0.67
1,362,017,620
38.53
2,172,606,967
3,534,624,587
Expiry Date
26/11/2023
31/07/2024
10/08/2024
31/10/2024
31/01/2025
31/05/2025
31/07/2025
31/10/2025
31/01/2026
31/05/2026
31/07/2026
31/10/2026
31/01/2027
Holders of >20%
(i)
Mr Ian Tchacos (100%)
No holder with > 20%
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
ADX ENERGY LTD
ADDITIONAL SHAREHOLDER INFORMATION
(i) Holders of more than 20%
#
Name
57,857,160
Jetosea Pty Ltd
Others (each holding less than 20%)
9,642,860
Unlisted options expiring 26/11/2023 67,500,020
%
85.71
14.29
100
f) Unlisted Performance Rights (Issued under ADX’ Employee Incentive Plan):
Unlisted Performance Rights
-
Number
Number of
Holders
-
- 95 -
ADX ENERGY LTD
TENEMENT SCHEDULE
Permit
Onshore Austria, Zistersdorf and Gaiselberg Production License
Upper Austria AGS Licenses (a)
Onshore Romania, Parta (b)
Onshore Romania, Iecea Mare Production Licence (b)
Offshore Italy, d363C.R-.AX (c)
% held
100%
100%
100%
100%
100%
Note a: Concession agreements for exploration, production and gas storage in Upper Austria (Upper Austria AGS). ADX
announced a farmout to ASX listed Xstate Resources Limited (Xstate) to earn a 20% economic interest in the Anshof
Prospect Area. Xstate has earned its 20% economic interest.
ADX announced a subsequent farmout to KPFG to earn 20% economic interest and ADX will retain an 80% economic
interest in the Welchau Farmin Area.
ADX retains a 100% interest in the remainder of the ADX-AT-II exploration license and the entire ADX-AT-I exploration
license.
Subsequent to year end, on 13 March 2023, ADX announced that Austria’s Ministry of Finance has awarded a production
license to ADX VIE GmbH (ADX) for the development Anshof oil field located within the ADX-AT-II exploration license in
Upper Austria.
Note b: 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 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 c: 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.
- 96 -