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Italian authorities give ADX the green light for gas exploration

ADX Energy has been granted a permit to search the Channel of Sicily for gas after the Italian ministry gave its subsidiary Audax Energy the green light to explore the area following an industry standard review.

According to technical studies conducted by the company last year, five prospects in the area covered by the permit have a best technical prospective resource estimate of 369 billion cubic feet.

The Ministry informed ADX that the verification procedure for the technical, financial and organizational capacity has now been completed and has produced a positive outcome that will result in the award of the “Nilde” gas exploration license between Sicily and Tunisia. The licensing follows the annulment of a decree restricting oil exploitation in the area, which could lead to the development of the Nilde oil field.

Management says an oil redevelopment project in Nilde will target the production of 34.1 million barrels of 2C contingent feedstock from three wells, with an estimated initial production rate of 22,000 barrels per day.

The recognition of the importance of hydrocarbons in maintaining energy security is a recurring theme in a number of jurisdictions. It is an honor for our team that the allocation of the gas rights was made possible thanks to ADX’s financial, technical and organizational capabilities.

The company said Italian licensing authorities had previously offered ADX the opportunity to ratify the Nilde permit under several conditions, including that only the gas potential within the permit may be commercially exploited.

Management subsequently submitted a report highlighting the excellent shallow gas prospectivity of the permit, which is located in shallow waters, along with additional details outlining its financial, technical and organizational capabilities.

Audax provided all necessary documents to enable the Italian authorities to assess the feasibility of the gas exploration and the financial and technical capabilities of ADX.

In February, Rome’s Regional Administrative Court quashed a plan that limited the scope of hydrocarbon prospecting, exploration and production in areas of the Mediterranean, including the proposed Nilde operations.

Management says that if the annulment is not challenged, it could lead to the return of 2018 legislation allowing oil and gas to be exploited within the permit area.

In 2018, the contingent resource range was estimated to be 19.2 to 65.6 million barrels of residual oil and the expected resource range was 40 to 201 million barrels of oil.

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