ADX in talks to secure funding for Tunisia drilling in 2019
ADX Energy is in talks to secure funding for an offshore well in Tunisia in early 2019 with the aim to test the Dougga gas discovery.
The company has recently received results of an independent evaluation of the Dougga gas condensate discovery and potential extension of Dougga – the Dougga South West prospect (Dougga SW).
According to ADX, the report shows unrisked 2C Contingent Resources of 405 Bscf Gas 1 and 31 MMbbl Condensate and 32 MMbbl LPG (totalling 122 MMBOE Note 3) at Dougga, a 63% increase over the last independent review by TRACS in 2011.
ERCE, an international, independent consultancy specializing in geoscience evaluation, engineering and economic assessment, compiled the report.
ADX plans to drill and test the Dougga Sud appraisal well during Q1 2019 using the Noble Globe Trotter II drillship. The company has said it is in talks with a number of parties regarding the funding of the well.
The report results will be used by ADX in support of ongoing financing discussions for the Dougga Sud appraisal well as well as a potential compliance listing of ADX on the Alternative Investment Market (“AIM”) of the London Stock Exchange (LSE).
ADX economic modeling indicates that the ERCE’s Best Estimate 2C Contingent Resources will result in a commercially attractive outcome which supports ADX appraisal strategy for Dougga.
As for the Dougga SW Prospect, it is an adjacent undrilled structure next to Dougga. Unrisked Best Estimate Prospective Resources there are 762 Bscf Gas and 37.5 MMbbl Condensate (totaling 169 MMBOE) at Dougga SW with 41% estimated within the Kerkouane Permit.
Chance of success at Dougga SW of 30%. Dougga and Dougga SW may form a single, connected structure (in the maximum case), ADX said.
Ian Tchacos, Executive Chairman of ADX, said:“The Board of ADX is pleased that ERCE has independently supported the detailed integrated subsurface, appraisal and development studies completed by ADX over the last 18 months with a view to progressing the commercialization of Dougga.
“While the resource estimates are lower than those of ADX they are significantly greater than the last independent review for Dougga which enhance the credibility of Dougga as a potentially significant resource which justifies ADX’s intended appraisal program.
“This independent evaluation supports ADX’s view that the Dougga gas condensate discovery is a potentially viable and important strategic resource with further upside potential identified at the relatively low-risk Dougga SW prospect in a country that is supportive of hydrocarbon development and has a desperate requirement for gas, LPG and condensate,” he said.
ADX said that while Contingent Resources estimated by ERCE are lower than ADX, ADX economic modeling indicates that the ERCE’s Best Estimate 2C Contingent Resources will result in a commercially attractive outcome which supports ADX appraisal strategy for Dougga.