ASX Release. 30 April Activities Report Period Ending 31 March Highlights. Operational

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1 ASX Release 30 April 2012 Activities Report Period Ending 31 March 2012 Highlights Operational Chorbane Permit, onshore Tunisia Sidi Dhaher1 discovery A rig contract with Dietswell SA, for the provision of the Sedlar 160 drilling rig to flow test the Sidi Dhaher1 oil discovery was signed. Auditing and testing of the rig and auxiliary equipment commenced. The testing programme was approved by Enterprise Tunisienne d Activités Petrolieres ( ETAP ). Recruiting and mobilisation of key personnel to the well site was undertaken. Kerkouane Permit Sicily Channel, offshore Tunisia and Italy An independent third party review incorporating a new ADX depth conversion model and a possible deeper gas water contact interpretation for the Dougga gas condensate discovery has supported a large increase in the upside resource case. The prospect interpretation outside the 3D seismic area was also progressed. New tectonic modeling generated by ADX demonstrates the potential for larger sized discoveries than have been encountered inboard from the ADX Sicily Channel acreage. This work will be presented to the industry at an upcoming AAPG conference (ICE, Singapore). Parta License, onshore Romania ADX completed a buy back of the interests of Caspian Oil & Gas Limited and Sibinga Petroleum Limited each having held a 20% interest in the Joint Venture in Romania. The consideration for acquiring each company s interest was the reimbursement by ADX to each company for past joint venture contributions. Page 1 of 6

2 ADX now holds 100% interest in the Parta concession and eleven prospecting permits. Farm out negotiations with several European companies were initiated. A seismic tender for 2D and 3D was completed which will allow ADX to start seismic operations immediately after Prime Ministerial ratification of the Parta licence agreement. Figure 1 : Tunisia and Italy ADX operated assets and license application. Oil fields in green color. The area south of the ADX acreage in offshore Tunisia is called Gulf of Hammamet (see text). Offshore Tunisia and Italy Kerkouane Pantelleria Permit; d364 C.R.AX permit (all ADX operated) ADX is the operator and holds a 60% interest in the Kerkouane and Pantelleria licenses, and 100% interest in d364 C.R. AX. During the ADX undertook several activities to further enhance the prospectivity and value of its large Sicily Channel portfolio. Highlights of these efforts during the are: A new 3D depth conversion of the Dougga condensate field and Lambouka discovery area was undertaken, using the seismic Page 2 of 6

3 migration velocities of the PGS Geostreamer 3D survey. ADX concluded that the impact for resources especially the upside case could be substantial. Subsequently this work was reviewed by a third party competent person, who also conducted additional reservoir engineering studies focussing on the possible depth of the gas water contact (Note that the Dougga1 gas condensate discovery well did not encounter a gas water contact or water bearing reservoir). The conclusion was that previous work has substantially underestimated the large upside potential of the discovery. Whilst the 3D seismic covered appraisal projects Dougga, Lambouka and the exploration project Dougga West offer a most likely resource potential in excess of half a billion barrels of oil equivalent in close proximity with low risk, the exploration potential of the area outside the 3D seismic area has been to date underestimated and not analysed in such detail as the 3D covered area. ADX therefore conducted special geological studies with experts who have been instrumental in the discovery of the billion barrel discoveries onshore Italy ( Monte Alpi area) and have demonstrated that certain areas of its Sicily Channel acreage are on the same trend and in similar geologic setting as these world class Italian fields. The expected field size in ADX s Sicily Channel acreage should be an order of magnitude higher than the discoveries further south offshore Tunisia ( Gulf of Hammamet area ). This work will be presented to the industry at an upcoming AAPG conference in Singapore in September ADX has started a farm out campaign for its Sicily Channel acreage. A number of companies have already approached ADX with a view to participate in future drilling projects such as the Dougga appraisal well. Page 3 of 6

4 Onshore Tunisia Chorbane Permit (ADX operated) ADX is the operator and holds a 40% interest. Figure 2: Chorbane permit location map. (Oil and Gas fields in green and red, respectively, prospects in yellow, green star shows position of Sidi Dhaher oil discovery) Following the discovery of a 30m oil column at Sidi Dhaher1, ADX secured a contract with Dietswell SA for the provision of the Sedlar 160 drilling rig to flow test the Sidi Dhaher1 oil discovery. The rig and auxiliary equipment are currently being audited and tested prior to mobilisation to the well site. Key personnel required for the program were recruited and mobilised during the. ADX also continued to engage with the local population preparing and negotiating environmental compensation agreements and work contracts. Approval of the testing programme was granted by Enterprise Tunisienne d Activités Petrolieres ( ETAP ) and the operational work program agreed and finalised by the joint venture. ADX has previously estimated the mean contingent oil in place resource volume for the Sidi Dhaher oil discovery to be 51 mmbbls. The confirmation of recoverable volumes and resulting potential reserves are contingent upon a successful well test with the objective of proving commercial flow rates and likely recovery factors. The Sidi Dhaher discovery is located in the 2,428km 2 large Chorbane Exploration Permit onshore central Tunisia near the port city of Sfax. It is Page 4 of 6

5 surrounded by several producing oil fields and extensive oil and gas infrastructure. Romania: Parta Concession Pannonian Basin ADX is the operator and holds a 100% interest in the awarded block. The PARTA block has an area of 1,221 km 2 and is located in the southern Pannonian basin area of western Romania. It covers also seven excised oil and gas fields and is considered underexplored. Previously ADX has identified, on existing seismic data, several conventional leads and prospects which are estimated to contain a total of 47 mmbls of oil and 480 bcf of gas (recoverable mean prospective resource potential). Main target depths are between 800 and 2000 metres. During the ADX completed a buy back of the interests of Caspian Oil & Gas Limited and Sibinga Petroleum Limited each having held a 20% interest in the Joint Venture in Romania. The consideration for acquiring each company s interest was the reimbursement by ADX to each company for past joint venture contributions. As a result ADX now holds 100% interest in the Parta concession and its eleven prospecting permits. ADX has received considerable third party interest for participation in this prospective acreage from larger European companies. The Company expects to be able to leverage its material equity position to secure substantial funding via a farmin to undertake modern 3D and 2D seismic during 2012 with a view to drilling exploration wells as soon as practically possible. Farm out negotiations are expected to be concluded in the near future. A concession agreement was signed in January 2011 with NAMR (Agentia Nationala Pentru Resurse Minerale). All ministerial approvals were received to commence operations but due to the resignation of the prime minister the final ratification of the concession agreement is still pending. ADX has nevertheless conducted and completed a seismic tender process for 3D and 2D seismic. With that the seismic acquisition could start without delay following the new prime minister s ratification of the Parta concession agreement. The ongoing exploration activities on the ADX Romanian acreage is resulting in identification of additional exploration potential. Romania represents an important growth opportunity in line with ADX s ongoing Page 5 of 6

6 strategy of focusing its resources on core areas which offer proven prospectivity, excellent fiscal terms and materiality. Figure 3: Map showing Parta block location in Southwest Romania Corporate and Finance ADX currently has 438,308,350 shares on issue. Cash on hand at 31 March 2012 was A$1,033,000. Yours faithfully WOLFGANG ZIMMER Managing Director Page 6 of 6

7 Appendix 5B Rule 5.3 Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10. Name of entity ADX ENERGY LTD ABN Quarter ended ( current ) MARCH 2012 Consolidated statement of cash flows Cash flows related to operating activities 1.1 Receipts from product sales and related debtors Receipts from joint venture partners/ reimbursements from joint ventures 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration Current Year to date (9 months) 241 2,711 (833) (3,298) (171) (488) (e) payments on behalf JV (254) (931) 1.3 Dividends received 1.4 Interest and other items of a similar nature received Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) GST refunds, exploration refunds & cost recoveries from JV Net Operating Cash Flows (978) (1,895) Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospect buy back Romania (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of:(a) prospects/ farmin (b) equity investments (841) (45) (841) (47) (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Exploration bond released 1,021 Net investing cash flows (886) Total operating and investing cash flows (carried forward) (1,864) (1,762) 30/9/2001 Appendix 5B Page 1

8 1.13 Total operating and investing cash flows (brought forward) (1,864) (1,762) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, (net) 2, Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows 2,055 Net increase (decrease) in cash held (1,864) Cash at beginning of /year to date 2, Exchange rate adjustments to item 1.20 (48) (43) 1.22 Cash at end of 1,033 1,033 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities Current $A' Aggregate amount of payments to the parties included in item Aggregate amount of loans to the parties included in item Explanation necessary for an understanding of the transactions Payment of director consulting fees and salaries. Noncash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows None 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest Chorbane Project Other entities are earning a combined 60% interest in this project by contributing 100% of the expected cost of the Sidi Dhaher well. ADX retains 40% of the project post well. Appendix 5B Page 2 30/9/2001

9 Financing facilities available Add notes as necessary for an understanding of the position. Amount available Amount used 3.1 Loan facilities 3.2 Credit standby arrangements Other facilities refer Note 1 20,000 Note In October 2009, ADX executed a Committed Equity Facility Agreement to secure a A$20,000,000 facility with Trafalgar Capital Specialised Investment Fund, Luxembourg (Trafalgar). Subject to terms and conditions of the facility, ADX could, at its discretion, issue shares to Trafalgar at any time over the next 30 months. Shares issued to Trafalgar to be priced at 95% of the lowest of the daily volume weighted average price ( VWAP ) of the Ordinary Shares on ASX as quoted by Bloomberg during the prior five consecutive trading day period. This facility expired in April Estimated cash outflows for next 4.1 Exploration and evaluation Cost Recovery Net of reimbursements 524 (496) Development 4.3 Production 4.4 Administration 210 Total 238 Reconciliation of cash Reconciliation of cash at the end of the (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. Current Previous 5.1 Cash on hand and at bank 1,033 2, Deposits at call 5.3 Bank overdraft 5.4 Other (provide details) Total: cash at end of (item 1.22) 1,033 2,945 30/9/2001 Appendix 5B Page 3

10 Changes in interests in mining tenements 6.1 Interests in mining tenements relinquished, reduced or lapsed Tenement reference Nature of interest (note (2)) No material changes Interest at beginning of Interest at end of 6.2 Interests in mining tenements acquired or increased A buy back of the interests of Caspian Oil & Gas Limited and Sibinga Petroleum Limited each having held a 20% interest in the Joint Venture in Romania was completed. The transactions reposition ADX as the operator and 100% interest holder in the Parta concession and eleven prospecting permits. 60% 100% Appendix 5B Page 4 30/9/2001

11 Issued and quoted securities at end of current Description includes rate of interest and any redemption or conversion rights together with prices and dates. 7.1 Preference + securities (description) 7.2 Changes during (a) Increases through issues (b) Decreases through returns of capital, buybacks, redemptions Ordinary securities Total number Number quoted Issue price per security (see note 3) (cents) Amount paid up per security (see note 3) (cents) 438,308, ,308,350 Fully paid 7.4 Changes during (a) Increases through issues (b) Decreases through returns of capital, buybacks Convertible debt securities (description) 7.6 Changes during (a) Increases through issues (b) Decreases through securities matured, converted 7.7 Options (description and conversion factor) 3,600, ,000 1,500,000 1,000,000 19,200,000 2,000,000 1,000,000 Exercise price 40 cents 40 cents 25 cents 30 cents 25 cents 25 cents 25 cents Expiry date 21/4/ /5/2012 1/7/2012 1/7/ /12/ /12/ /2/ Issued during 7.9 Exercised during 7.10 Expired/ Forfeited during 1,000, cents 28/2/2014 2,000, cents 31/7/ /9/2001 Appendix 5B Page 5

12 7.11 Debentures (totals only) 7.12 Unsecured notes (totals only) Compliance statement 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4). 2 This statement does give a true and fair view of the matters disclosed. Sign here: Date:..30 April Company Secretary Print name: PETER IRONSIDE Appendix 5B Page 6 30/9/2001

13 Notes 1 The ly report provides a basis for informing the market how the entity s activities have been financed for the past and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report. 2 The Nature of interest (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with. == == == == == 30/9/2001 Appendix 5B Page 7