ADX Energy Applies for 787km² of New Sicily Channel Gas Acreage

ADX Energy Moves to Expand Its Sicily Channel Gas Footprint With Two New Permit Applications

ADX Energy (ASX: ADX) has submitted applications for two new exploration permits in the Sicily Channel, marking a significant step in the company's ADX Energy Sicily Channel gas permit applications in offshore Italy strategy. According to the ASX release dated 19 August 2026, the move follows an independent technical review that has already validated the geological formation underpinning the company's exploration approach as a credible target.

Two New Permits, Nearly 800 Square Kilometres of New Ground

The permit applications, designated d 368 C.R.-AU and d 369 C.R.-AU, cover a combined area of 787 square kilometres across two blocks in the Sicily Channel, offshore Italy. Both applications have been submitted to the Italian Ministry of Environment and Energy Security and were published in the Official Hydrocarbon Bulletin (BUIG) in July 2026, with the gazettal issued in August 2026.

ADX currently holds a 100% interest in the adjacent CR 150.AU Permit and would hold the same interest in the expansion permits if the applications are successful. The two new blocks sit directly adjacent to the existing permit, meaning any gas play established across the current acreage could extend into the newly applied-for ground.

The Terravecchia Play: What Makes This Formation Worth Pursuing?

Understanding why this expansion matters requires some context on the geological target underpinning ADX's Sicily Channel strategy — the Terravecchia Formation.

What Is Biogenic Gas?

Unlike conventional natural gas, which forms through heat and pressure applied to organic material deep underground over millions of years, biogenic gas is produced by microbial activity at shallower depths. Bacteria break down organic matter in sedimentary sequences and generate methane as a by-product. These accumulations tend to occur in younger geological formations and can be substantial in scale when source rock, reservoir, and trap conditions align.

Why Does This Matter for Investors?

Biogenic gas fields are well documented across the Mediterranean region. They can offer lower-cost drilling targets because the gas-bearing formations are typically shallower, which tends to reduce well complexity and capital requirements. For an exploration-stage company such as ADX, this suggests a potentially more capital-efficient pathway to testing the play concept.

What Did the Independent Review Find?

In July 2026, RISC Advisory Pty Ltd, an internationally recognised independent technical consultancy, completed a review of the Terravecchia Formation play in the Sicily Channel. According to ADX's ASX release, RISC's review found that:

• The Miocene-aged Terravecchia Formation represents a valid biogenic gas play in the Sicily Channel, based on analysis of regional geology, offset well data, and analogous fields
• Offset wells surrounding ADX's existing permit have frequently displayed elevated mud gas shows within sandstones developed in the dominantly shaley Terravecchia Formation
• The nearby onshore Lippone-Mazara Terravecchia gas field and the offshore Pliocene Argo-Cassiopea gas developments serve as analogues for the play concept

The presence of gas shows across multiple historic wells — none of which were drilled specifically to test the Terravecchia Formation — adds a degree of geological support to the play concept without ADX having to bear the cost of proving it independently.

"A recent independent review by RISC Advisory Pty Ltd recognised that the Miocene aged, Terravecchia Formation is a valid biogenic gas play in the Sicily Channel based on the analysis of the regional geology, offset wells with gas shows and analogous discoveries…"

How the Application Process Works

The Italian permit application process follows a structured regulatory pathway. Consequently, investors should understand the key milestones and timeframes involved.

Stage 1: Competition Period

Other operators may submit competing applications for the same acreage during a three-month window from EU Official Journal publication. If no competing applications are lodged, the process moves forward without a formal selection process between applicants.

Stage 2: Ministerial Technical Review

Two bodies within the Ministry of Environment and Energy Security are required to provide opinions:

• UNMIG Section, the regional technical office overseeing hydrocarbon exploration and production activities
• CIRM (Commission for Hydrocarbons and Mineral Resources), a technical advisory body for exploration and production activities

Stage 3: Environmental Impact Assessment Submission

Within 90 days of the competition period closing, ADX's wholly owned Italian subsidiary, Audax Energy, must submit an Environmental Impact Assessment (EIA) request to the relevant authority and notify the Ministry accordingly.

Stage 4: Competing Applications

Should other operators apply for the same blocks, the Ministry, after consulting CIRM, will select between applicants based on criteria including:

• The validity and novelty of exploration objectives
• Completeness of the proposed work programme
• Execution timelines and methods
• The technical competency and financial capacity of applicants

ADX has stated it will provide further updates as results from the application process become available.

What This Expansion Means for ADX's Investment Case

This permit application activity reflects a deliberate strategy by ADX to consolidate ground around a play concept that has now received independent technical support. Furthermore, several elements of the investment case stand out.

• First-mover positioning: By applying for acreage directly adjacent to its existing 100% interest, ADX is seeking to secure ground while the play concept remains at an early stage of broader industry recognition.
• Independent technical support: The RISC Advisory review, released in July 2026, provides an independent basis for the play concept, resting on analysed data including offset well gas shows and regional analogues rather than untested exploration theory.
• Contiguous acreage advantage: Expansion permits sitting directly adjacent to the existing CR 150.AU Permit mean a gas discovery in the existing block could have direct implications for the new acreage, while the expanded footprint provides ADX with greater flexibility in how it approaches the play structurally.
• Italy's gas demand context: Italy remains a substantial natural gas consumer and has continued to pursue domestic and near-shore gas development within its broader energy considerations. Offshore Sicily Channel gas, if discovered and developed, would sit within a market where domestic production carries commercial relevance.
• 100% working interest: Holding the full working interest in all three permits, if the applications succeed, means ADX would capture the full upside of any discovery while also bearing the full cost of exploration activity. This gives investors undiluted leverage to any positive result.

Upcoming Milestones to Watch

Near-term newsflow from ADX's ADX Energy Sicily Channel gas permit applications in offshore Italy process will be driven largely by the regulatory pathway. Key items to monitor include:

1. EU Official Journal publication date, which triggers the formal start of the three-month competition period
2. End of competition period, confirming whether competing applications have been lodged
3. EIA submission, due within 90 days of the competition period closing, when Audax Energy must formally submit its Environmental Impact Assessment request
4. Ministerial and CIRM technical opinions, required before any permit can be formally awarded
5. Further updates on the existing CR 150.AU Permit, which may continue to inform the broader prospectivity case for the play

Why ADX Energy Is Worth Watching

ADX Energy has outlined a focused geographic and geological exploration strategy. The ADX Energy Sicily Channel gas permit applications in offshore Italy follow a targeted approach to expand around a play that has now been reviewed by RISC Advisory, a recognised technical consultancy in the energy sector.

The combination of an independently assessed biogenic gas play, 100% working interest across contiguous acreage, historic offset well gas shows indicating the presence of a working petroleum system, and a formal regulatory process now underway to secure expanded ground reflects a company pursuing a defined exploration strategy in an established European hydrocarbon basin.

"ADX Energy has moved to expand its Sicily Channel gas acreage with two new permit applications covering nearly 800 square kilometres adjacent to its existing 100% interest. Supported by an independent technical review of the Terravecchia Formation biogenic gas play and historic offset well gas shows, the company has advanced a regulatory process that includes near-term milestones such as permit award decisions and EIA submissions for investors to monitor."

Glossary of Key Terms

Biogenic gas refers to natural gas, predominantly methane, generated by microbial activity in shallow sedimentary formations, as distinct from thermogenic gas formed by deep burial and heat.

Terravecchia Formation is a Miocene-aged geological formation in the Sicily Channel characterised by sandstones within a dominantly shaley sequence, identified as the primary gas reservoir target for ADX's exploration programme.

Mud gas shows are detections of gas in the drilling mud circulated during well drilling, used as an indicator of hydrocarbons intersected by the wellbore.

Working interest is the percentage ownership an operator holds in an exploration or production permit, determining its share of both costs and any future revenues.

EIA (Environmental Impact Assessment) is a formal regulatory study required before exploration or development activities can proceed, assessing the potential environmental impacts of proposed operations.

UNMIG is Italy's regional technical office within the Ministry of Environment and Energy Security responsible for overseeing hydrocarbon exploration and production activities.

CIRM is the Commission for Hydrocarbons and Mineral Resources, an Italian technical advisory body that provides opinions on exploration and production permit applications.

BUIG (Official Hydrocarbon Bulletin) is Italy's official publication for hydrocarbon-related regulatory notices, including permit application gazettals.

Want to Know More About ADX Energy's Sicily Channel Gas Expansion?

ADX Energy (ASX: ADX) is pursuing a focused exploration strategy in offshore Italy, with two new permit applications covering nearly 800 square kilometres of contiguous acreage, a 100% working interest position, and an independently validated biogenic gas play underpinning its approach. For investors looking to understand the full scope of the company's Sicily Channel strategy, upcoming regulatory milestones, and exploration upside, visit the ADX Energy website at adx-energy.com.