ADX Energy Limited (ASX:ADX) has secured a US$2 million investment from Reabold Resources PLC (LON:RBD), for a 29% shareholding in UK based Danube Petroleum, an ADX subsidiary.
Upon settlement, Reabold will hold a 50% interest in the Parta exploration license located in Western Romania and a 100% participating interest in the upcoming Parta appraisal program.
The US$2 million investment will be used to drill the first well of the two well appraisal program during the second half of 2018.
The two appraisal wells will target a combination of tested contingent and log derived prospective gas resources spread over a total of 5 gas reservoirs.
If all prognosed zones are successful, ADX is projected to recover US$85 million of post-tax net present value from 33 billion cubic feet equivalent of recoverable gas.
The licence has excellent economic potential due to low drilling and tie in costs, availability of proximal gas infrastructure, strong gas pricing and excellent fiscal terms.
ADX is aiming to source a further US$2 to US$3 million investment in Danube by mid 2018, which will provide sufficient funding to drill a second well in the Parta appraisal program.
The company’s shares closed circa 8% higher on Monday, at $0.013.