ADX Energy Ltd (ADX) is pleased to update its Shareholders regarding progress in relation to the
independent evaluation of the resource potential and viability of the Dougga Gas Condensate Project
(Dougga) offshore Tunisia, the planned drilling of the Dougga Sud appraisal well, ongoing discussions for
funding the appraisal program and permit renewal terms.
Independent Evaluation Report
On the 16th of July 2018, ADX announced the assessment of the Contingent Resources at Dougga as well as
the Prospective Resources of the Dougga South West prospect determined in the Independent Evaluation
Report by ERC Equipoise Pte Ltd (ERCE) Note 2. In addition to the Dougga resource assessments previously
announced, ERCE has assessed that chance of the development of Dougga to be 70% Note 4
. A summary of the results of the ERCE Independent Evaluation is attached to this release. Given the importance of the Dougga project and the relevance of the ERCE report, the Board of ADX has made the report available to its
shareholders via the Company’s website.
Dougga Sud Appraisal Well
Noble Drilling Services Inc has advised that the Noble Globe Trotter II drilling rig is now scheduled to be
available to spud the Dougga Sud appraisal well in April 2019 following completion of its current program in
the Black Sea. Noble have extended the drilling contract on the same excellent commercial terms as agreed
previously. Well planning and approvals for drilling and testing are ongoing. The delay provides additional
time for ADX to secure funding and secure long lead items for the Dougga Sud well.
Appraisal Well Funding
Data room due diligence and funding discussions are ongoing with multiple parties with a view to securing
either a farmout, vendor finance or a combination of both. The recently completed ERCE report, in combination with the TechnipFMC Concept Study, provides potential funding partners with independent
confirmation of the potential viability of the Dougga Gas Condensate Project by highly respected third
parties. ADX continues to work towards the finalisation of funding for Dougga at an asset level and the
introduction of a capable partner to the project that can not only fund the appraisal well but, upon
appraisal success, also enable the commercialisation of Dougga.
Work Program Approvals
On December 2017 ADX announced that the Director General of Hydrocarbons (DGH) advised that the
Hydrocarbon Consultative Committee (HCC) Note 5 had approved the application for a change of work program
in the Kerkouane permit from an exploration well and the acquisition of 500 km2 of 3D seismic to the drilling
and testing of the Dougga Sud appraisal well. The revised work program, which replaces the previously
unfulfilled permit work program during the first renewal period, is a precondition to the entry for a second
renewal period of 3 years.
The DGH also advised the requirement for a bank guarantee in relation to the modification of the work
program, which will be lifted upon the testing of the Dougga Sud well. Following discussions between the
DGH and ADX, the DGH has advised that the HCC has agreed to reduce the proposed bank guarantee for the
completion of the Kerkouane testing program from US$ 8 million to US$ 3 million and delayed its timing to
the spudding of the well. This is a significant concession by the HCC facilitated by the DGH. ADX intends to
secure the funding from potential farminees or providers of vendor finance.
Ian Tchacos, Executive Chairman of ADX, commented “The Board of ADX is pleased with the progress at
Dougga. The independent assessment by ERCE that the Dougga project has a high chance of being
commercialised is very positive from both a project and farmout perspective. ADX is now receiving strong
funding interest at an asset level from a number of parties and we anticipate securing funding
commitments well in advance of rig availability enabling sufficient time to conclude planning, long lead
item purchases and regulatory approvals. The reduction and delay of the requirement to post a work
program guarantee is a substantial concession by the Tunisian authorities.”
Note 1: Gas Net of Inerts (after deduction for removal of CO2 and gas shrinkage when liquids are removed)
Note 2: The work has been carried out using international resources and reserves reporting and classification
standard adopted by the ASX and the LSE - the March 2007 SPE/WPC/AAPG/SPEE Petroleum Resources
Management System (“PRMS”)
Note 3: ERCE has not reported volumes in MMBOE in its report; the MMBOE resources, and percentage
variances, have been calculated by ADX using the oil equivalent conversion factors from the TRACS 2011
Note 4: ERCE has assigned the Contingent Resources to the Dougga discovery as Development Unclarified.
ERCE considers that a future development of Dougga is contingent on:
• The appraisal Well Dougga-Sud is successfully drilled and tested and acquires representative reservoir
information and fluid samples
• Well Dougga-Sud broadly confirms the current assumptions about reservoir quality and fracture
distribution and establishes that future horizontal development wells will be able to flow at the required
commercial flow rates sufficient to support the proposed development plan
• The preparation and approval by all stakeholders of a development plan
ERCE has assessed the chance of development as 70%.
Note 5: “The Hydrocarbon Consultative Committee “Comite Consultatif des Hydrocarbures” (HCC) is a
Ministerial Committee responsible for providing advice on the granting of title to hydrocarbon permits
and/or concessions in Tunisia.