Highlights

  • AXP Energy has signed a farm-in agreement to earn a 25% participating interest in Syria's Block 9.
  • The company will fund 35% of capital expenditure during the earn-in phase.
  • Completion remains subject to formal approval of the interest assignment by the Syrian Government.
  • Historical prospective resource estimates were updated using revised third-party data released in July 2026.

AXP Energy Ltd (ASX:AXP) has entered a farm-in agreement that could significantly expand its exploration portfolio beyond its producing assets in the United States. The agreement provides the company with the right to earn an interest in Syria's Block 9 exploration permit, marking a strategic move into a large onshore oil and gas project. While the transaction broadens AXP's exploration footprint, completion remains conditional and the project's prospective resources are based on historical third-party estimates rather than independently verified discoveries.

Farm-In Agreement Opens New Exploration Opportunity

AXP has signed a binding agreement with Simpora Latakia Limited to earn a 25% participating interest in Block 9, an onshore exploration permit covering approximately 10,039 square kilometres within Syria's Palmyride Basin.

Under the agreement, AXP will contribute 35% of exploration and development capital expenditure during the earn-in period despite ultimately holding a 25% participating interest after a second commercial discovery.

The company is also required to make an initial USD 100,000 good-faith payment followed by a further USD 1 million advance contribution within the agreed timeframe. According to the company, AXP will not be responsible for approximately USD 25.5 million of historical exploration costs previously incurred on the permit.

Completion Depends on Regulatory Approval

Although the farm-in agreement has been executed, completion has not yet occurred.

The transaction remains conditional upon the Syrian Government formally recording the assignment of AXP's participating interest in Block 9.

The company has also outlined plans for future exploration activity, including two wells currently scheduled for drilling during 2027 as part of the earn-in obligations.

Until regulatory approvals are completed, AXP's participation in the project remains subject to the agreed conditions being satisfied.

Historical Resource Estimates Were Updated

Following its initial announcement, AXP issued a correction to historical prospective resource figures associated with Block 9.

The revised estimates replaced earlier 2010 third-party data with figures from a subsequent 2011 independent report, reflecting updated geological information following earlier drilling activity.

The company noted that these figures represent historical prospective resource estimates prepared by third parties and have not been independently verified by AXP.

Accordingly, the estimates should not be interpreted as reserves, discovered resources or volumes attributable to AXP's future participating interest.

Existing US Operations Continue Alongside Expansion

Prior to the Syria transaction, AXP's operations were centred on mature oil and gas assets in Colorado and Oklahoma, which continue to generate operating cash flow.

The company reported cash of approximately USD 400,000 at the end of its latest reported quarter and subsequently completed an AUD 800,000 capital raising to support near-term activities.

Future progress is expected to depend on completing the Syria transaction, advancing exploration work and maintaining operational performance across its existing US portfolio.

Upcoming announcements are likely to focus on regulatory approvals, project milestones and exploration planning for Block 9.

What Investors May Watch

Investors may monitor regulatory approval of the farm-in, completion of the transaction, future exploration planning, 2027 drilling activities, funding developments and subsequent ASX announcements.

Risks

AXP Energy remains exposed to exploration risk, regulatory approvals, geopolitical and sovereign risk, funding requirements, commodity price volatility, shareholder dilution and the possibility that prospective resources may not translate into commercial discoveries.