ADX Energy Secures $3.58 Million Funding for Austrian HOCH-1 Gas Discovery Testing

ADX Energy Locks In $3.58 Million to Advance Austrian Gas Discovery and European Exploration Activities

ADX Energy Ltd (ASX: ADX) has secured firm commitments to raise $3.58 million through a placement to sophisticated investors, providing fresh capital for near-term gas testing in Austria, follow-up drilling, production optimisation and continued exploration work in the offshore Sicily Channel. The raise comes as ADX looks to build on its recent HOCH-1 shallow gas discovery in Upper Austria and continue its broader European oil and gas growth strategy.

The placement will see 179.2 million new fully paid ordinary shares issued at $0.02 per share, each with one free-attaching option exercisable at $0.03 and expiring on 31 December 2027. For investors, the update matters because the new funding is tied to a defined operational plan, with the multi-zone testing of HOCH-1 emerging as the most immediate catalyst.

Executive Chairman Ian Tchacos commented: "This funding enables ADX to build on the early exploration success at the HOCH-1 shallow gas discovery in Upper Austria with multi zone testing of the well and the continuation of the shallow gas drilling program with the goal of materially building our gas production."

Tchacos added that this is occurring "at a time when Europe is experiencing record gas prices due to supply shortfalls for the foreseeable future."

Placement Terms and Structure

The ASX release sets out a placement structure that combines discounted equity with listed-option upside, subject in part to shareholder approval. The issue price of $0.02 per share represents a 16.7% discount to ADX's last traded price of $0.024 and a 23.0% discount to the company's five-day volume weighted average price of $0.026 up to and including 17 July 2026.

The non-director component of the placement is scheduled to settle on 29 July 2026. Board participation of $145,000 is included in the total amount raised but remains subject to shareholder approval.

The placement is being undertaken using ADX's available capacity under ASX Listing Rule 7.1 and ASX Listing Rule 7.1A for the non-director tranche. Furthermore, the attaching options are intended to be listed, subject to satisfying ASX requirements and shareholder approval at a general meeting.

For shareholders, this structure is relevant for two reasons. First, the discounted pricing may support completion of the raise in a difficult capital market. Second, the attaching options give incoming investors additional leverage to future operational success if ADX's share price rises above the $0.03 exercise price before expiry.

Where ADX Plans to Spend the Placement Funds

According to the announcement, ADX has earmarked proceeds across five operational areas. The capital allocation is focused on both near-term production-related work in Austria and earlier-stage exploration in Italy.

The company said funds will be used for:

1. Multi-zone gas testing of the recent HOCH-1 shallow gas discovery in Austria
2. Follow-up shallow gas drilling in Austria
3. Ongoing production optimisation in Austria
4. Exploration activities offshore Sicily Channel
5. General working capital

This funding mix suggests that HOCH-1 is only one part of a broader activity schedule. Even so, the testing of that well appears to be the clearest short-term event for investors to monitor, as it may help determine the scale of the shallow gas opportunity and inform additional drilling decisions.

Why the HOCH-1 Gas Discovery Matters

The HOCH-1 well is described in the ASX release as a recent shallow gas discovery in Upper Austria. ADX now plans to carry out multi-zone gas testing, which is a key technical and commercial step after a hydrocarbon-bearing well has been drilled.

What Is Multi-Zone Gas Testing?

A well can pass through several separate rock layers that may each contain gas. Multi-zone testing is the process of isolating those layers one at a time and measuring whether gas can flow from each zone, how strongly it flows, and whether the flow rates may support commercial production.

For non-specialist investors, this is important because a discovery is not fully defined at the moment gas is first encountered. However, testing helps answer practical questions such as:

• Which zones are productive?
• How much gas might each zone contribute?
• Could multiple zones support one development plan?
• Does the well support follow-up drilling nearby?

If several zones in HOCH-1 prove productive, the value of the discovery may extend beyond a single gas-bearing interval. That could improve the economics of a broader shallow gas drilling programme in Austria, particularly if development costs remain relatively modest.

Key Technical Terms Explained

• Shallow gas discovery: Gas found at relatively modest subsurface depth, which may be less costly to drill and develop than deeper targets.
• Multi-zone testing: Testing separate gas-bearing layers within one well to assess the productivity of each zone.
• Biogenic gas: Natural gas formed by microbial activity, rather than by high heat and pressure over long geological periods.
• Farm-in partner: A company that funds part of a project in exchange for an ownership interest.
• VWAP: Volume weighted average price, a share price benchmark that reflects both price and trading volume over a set period.

Austria Remains the Centre of ADX's Near-Term Programme

The ASX announcement makes clear that ADX's Austrian portfolio extends well beyond HOCH-1. Management stated that the company is also working to enhance oil production output from existing fields while preparing to introduce farm-in partners to a material near-field oil exploration target adjacent to the Anshof oil field.

This is notable because Anshof already hosts a 3,000 barrel per day capacity processing facility, which ADX says could shorten development timelines and help maximise value for potential partners. Existing infrastructure can matter considerably in oil and gas development, as nearby discoveries may be able to use established facilities rather than requiring entirely new processing and handling systems.

The company also referenced the planned deepening of the Welchau light oil and gas discovery, which it described as a high-impact target. In addition, ADX is pursuing both lower-risk production growth and higher-impact exploration opportunities within Austria.

From an investor perspective, this creates a layered Austrian strategy:

• Near-term gas appraisal and potential production growth through HOCH-1 and follow-up shallow gas drilling
• Production enhancement from existing assets
• Potential third-party funding through farm-in discussions at Anshof
• Additional upside from Welchau

That mix may appeal to investors looking for more than a single-well outcome, though each component remains subject to execution and future technical results.

Sicily Channel Adds Longer-Dated Gas Exposure

Beyond Austria, the ASX release states that ADX will continue exploration activities in the Sicily Channel permit offshore Italy. Management said the company plans to build its seismic and well database to further define what it described as the area's resource potential, whilst continuing resource definition and gas play development work.

The announcement also states that this work was recently validated by an internationally accredited Independent Reviewer. Importantly, however, the release does not disclose development approvals, government support or a production timeline for this permit, so the Sicily Channel should be viewed as an exploration asset that remains earlier stage than ADX's Austrian operations.

Offshore gas prospects can take longer to assess and develop than onshore discoveries, but they may also offer larger scale if subsequent technical work supports the early geological case.

European Gas Market Conditions Provide Context

ADX linked the placement to broader market conditions in Europe, with Ian Tchacos noting the company is progressing its Austrian gas activities during a period of record gas prices and ongoing supply shortfalls.

That market backdrop does not change the technical work that still needs to be completed at HOCH-1 or in the Sicily Channel. However, it does help explain why ADX is prioritising gas-related activity within its portfolio.

For companies with existing gas exposure in Europe, stronger regional pricing can improve the commercial relevance of even modest production additions, if those additions are successfully brought online. Investors should note that commodity price support can enhance project economics, but it does not replace the need for successful testing, drilling and development execution.

What Investors May Watch Next

The placement gives ADX the funding required to progress several defined workstreams. The most immediate of these appears to be the multi-zone testing of HOCH-1, which may provide a clearer indication of the well's productive potential and whether the shallow gas programme can expand.

Other areas likely to remain on investors' radar include:

• Results from HOCH-1 testing, particularly whether multiple productive zones are confirmed
• Follow-up shallow gas drilling activity in Austria
• Production optimisation outcomes from existing Austrian assets
• Progress on farm-in discussions for the near-field Anshof oil target
• Further technical work in the Sicily Channel permit
• Shareholder approval process for director participation and attaching options

Board participation of $145,000 may also draw attention, as director investment alongside a placement is often viewed by the market as a sign of internal confidence, though it remains subject to shareholder approval.

ADX's latest ASX update presents a funded plan centred on Austria, with HOCH-1 as the lead near-term catalyst and additional upside tied to existing production assets, oil appraisal opportunities and offshore Italian gas exploration. The next phase now depends on operational delivery, starting with whether the company's HOCH-1 shallow gas discovery can demonstrate productive scale through multi-zone testing.

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