Tunisia: ADX Energy Limited Lambouka-1 Well Operations Update

ADX Energy Limited  reports on Lambouka-1 Well operations update

Activities during past week:

Following the resolution of rig power supply issues reported in the previous update, a final wiper trip of 26″ hole was conducted, then 20″ casing was run and cemented to a depth of 922m. All rig anchors were successfully tested to full storm tension compliance.

Following the running of BOPs and the Sub Sea Riser to a 610m water depth weather conditions deteriorated and rig operations were suspended. Waited for weather conditions to improve for approximately 48 hours, work continued to run BOPs on riser.

Weekly Operations Forecast:

Forecast operations during the coming week are as follows:

– Latch BOPs to wellhead and pressure test BOP and connector

– Drill 16” hole to approximately 1,340 meters MD

– Run and Cement 13 3/8″ casing

Note: Contrary to statements in the previous operations update it is expected that the first potentially hydrocarbon bearing reservoir (the Birsa sandstone) will be encountered in the 12-1/4″hole section.

Participants in the Lambouka -1 well are as follows* (*The respective interests in the Lambouka Prospect area in the Kerkouane Permit and the Pantelleria Licence are based on the completion of all farmin obligations.):

– ADX*: 30% Operator (*ADX’ interest is held via wholly owned subsidiary Alpine Oil & Gas Pty Ltd)

– Gulfsands Petroleum Plc : 30%

– Carnavale Resources Ltd : 20%

– Bombora Energy Limited* 10% (*Bombora Energy Limited is in the process of being 100% acquired by ASX listed XState Resources Limited (ASX:XST).)

– PharmAust Limited : 10%

Lambouka Prospect Summary

The Lambouka prospect is located in the ADX operated Kerkouane permit offshore Tunisia. The Lambouka -1 drilling location is approximately 160km North East of Tunis in the Sicily channel. Lambouka is a large 70 square kilometre area tilted horst block which contains three potentially hydrocarbon bearing reservoirs. The goal is to drill a safe well to a total depth of 3,000 meters and to fully evaluate the three potential hydrocarbon formation objectives for the well. All three objectives are proven and producing reservoirs in the Sicily Channel and adjacent the Gulf of Hammamet. The nearest offset well is the Dougga-1 gas condensate discovery in the Kerkouane permit located approximately 22 km SSW of Lambouka -1.

In the event of a discovery, it is predicted that the first and shallowest reservoir (Birsa sandstone) could contain oil, whereas the final and deepest reservoir (Abiod carbonate reservoir) would most likely contain gas condensate, analogous to the nearby Dougga gas condensate discovery.

Lambouka straddles two licences (the Kerkouane Permit in Tunisia and the Pantelleria License in Italy) as well as the border between Tunisia and Italy. The participants in the “Lambouka Prospect 3 Area” which is a limited area defined over the Lambouka prospect within both the Kerkouane and Pantelleria are the same in the subset of both licenses.

Lambouka is one of the largest undrilled prospects in the Mediterranean. By bringing together the Kerkouane and Pantelleria licenses under one operator, ADX has been able for the first time to map the entire structure. This is the likely reason that Lambouka has remained undrilled until now.

The prospect was originally mapped on 2D seismic then recently reconfirmed and remapped on a new 3D seismic data set. The new state of the art 3D seismic was acquired in March 2010 and a “fast-track processing cube” was completed on the 2nd of May 2010. The 3D data set was used to select the final drilling location for the Lambouka – 1 well.

ADX has estimated the mean prospective resource for the Lambouka prospect at 270 million barrels oil equivalent (“MMBOE”). While a commercial oil discovery will likely result in an independent oil development, it is likely that a gas condensate discovery would be developed in conjunction with Dougga. Dougga has been independently assessed to contain a mean resource of 177 Bcf of sales gas, 28.4 mmbbls of condensate and 9.4 mmbbls of LPG.

It is estimated that the well will take about 35 days to drill and evaluate and cost approximately US$22 million.

About: ADX Energy Limited

The company’s strategy is two pronged; grow the European and North African oil and gas business in order to expose shareholders to the lucrative European energy market and to promote it’s existing Australian energy, gold and base metal portfolio to capitalise on the current high commodity price environment.

AuDAX was incorporated in 1987 in order to explore for gold and base metals in Western Australia. The company has recently diversified from its initial minerals focus to include oil and gas exploration. To that effect ADX farmed in PEL 182 into the South Australian portion of the Cooper Basin in 2005.

AuDAX appointed Wolfgang Zimmer, an oil and gas industry professional with over 27 years experience, as Managing Director in late 2007 to grow the company’s oil and gas business. Subsequent director and staff appointments and the establishment of a European office have boosted the depth of oil and gas experience in the company and allowed the company to expand its oil and gas activities.

Currently AuDAX operates permits onshore and offshore Tunisia, offshore Italy and onshore Australia and holds an interest in a non operated block in onshore Romania.

AuDAX is also a participant and operator of a number of AMI’s (Area/s of Mutual Interest) that enable it and its partners, Nexus Energy and Kairiki Energy, to efficiently act upon business opportunities.

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Source: ADXEnergyLimited, July 27, 2010: