ADX Energy (ASX: ADX) has been granted a two-year extension for its Parta oil and gas exploration block, satisfying an important condition of a recently announced farm-in deal for the onshore Romanian project.
The Parta exploration licence is currently 100% held by a wholly-owned subsidiary of Danube Petroleum, which is 67%-owned and operated by ADX Energy. AIM-listed oil and gas investment company Reabold Resources holds the other 33% stake in Danube.
In early April, Australian private company Parta Energy Pty Ltd signed a binding heads of agreement with the Danube partners to earn a 50% interest in the Parta block. Following completion of the farm-in, the block will be owned 50:50 by Danube and Parta Energy.
Under the terms of the farm-in deal, Parta Energy is required to fund the first US$1.5 million (A$2.15 million) of a planned 100sq km 3D seismic program on the licence.
The only regulatory condition for the completion of the deal related to the licence extension, which has now been achieved.
This extension was granted for a “minimal but necessary” work program commitment of about €100,000, comprising the additional reprocessing of existing 50sq km of 3D seismic and 200km of 2D seismic.
ADX said now this farm-in condition has been met, the other contractual conditions are expected to be finalised with Parta Energy by the end of this month.
Parta seismic program
The company can also now commence contracting work for the acquisition of the Parta seismic program, which is anticipated to start during the 2019 fourth quarter following the company’s planned drilling of the Iecea Mica-1 appraisal well in the adjacent Iecea Mare production licence.
The Parta exploration seismic program is planned to extend the modern 3D seismic footprint across the north of the Parta permit and the Iecea Mare production licence to about 200sq km.
This targeted zone is in a prospective yet underexplored area of the Pannonian Basin where little 3D seismic and modern 2D seismic data exists and there has rarely been drilling below 2,000m.
According to ADX, exploration results elsewhere in the basin using 3D seismic has resulted in success rates of more than 60%.
The company said the combination of the seismic data and the Iecea Mica-1 drilling results will be “very valuable for the focus of future exploration”.
“The deepening of the Iecea Mica-1 well to evaluate a potential fractured basement play that is proven for oil and gas elsewhere in the basin yet underexplored is very promising for future follow-up targets,” ADX stated.
By early afternoon trade, ADX’s share price was up more than 16% to $0.007.