Highlights

  • AXP Energy has secured the right to earn a 25% participating interest in Syria's 10,039 km² Block 9 Production Sharing Contract located in the Palmyride Basin.
  • The announcement positions the company in a newly reopened petroleum market following the removal of international sanctions during 2025.
  • AXP shares rose 12.5% to AUD 0.007 following the announcement, reflecting investor interest in the company's expanded exploration footprint.

AXP Energy Ltd (ASX:AXP) attracted renewed market attention following the company's announcement of a farm-in agreement over Syria's Block 9 Production Sharing Contract. The stock closed at AUD 0.007 on 15 June 2026, representing a gain of 12.5% for the trading session.

The market reaction followed what management described as a transformational transaction that broadens AXP's asset portfolio beyond its existing operations in Oklahoma, United States. For a company of AXP's size, the agreement represents a notable expansion into a region that has recently reopened to international energy investment after years of geopolitical restrictions.

While the company's market capitalization remains relatively modest compared with larger exploration and production companies, investors appear to be evaluating the potential long-term implications of obtaining exposure to a large acreage position in a historically productive Middle Eastern petroleum basin.

Details of the Syria Block 9 Agreement

The newly announced agreement grants AXP the right to earn a 25% participating interest in Block 9 through a farm-in arrangement with operator Simpora Latakia Limited, which currently holds a 75% interest.

Block 9 covers approximately 10,039 square kilometres in north-west Syria and is located within the Palmyride Basin, a petroleum province with a history of oil and gas discoveries. The asset had previously been explored between 2007 and 2011 before international sanctions interrupted development activities.

Under the terms disclosed by AXP, the company has already paid a US$100,000 deposit and is required to make an additional US$1 million payment within 60 days. Management has characterised the structure as a capital-efficient entry model that provides exposure to exploration potential while limiting initial financial commitments.

The agreement also establishes a strategic relationship with Simpora Latakia, providing AXP with local operational expertise and access to regional opportunities that may emerge as Syria's energy sector continues to reopen.

Historical Exploration Work Reduces Early-Stage Uncertainty

One of the most notable aspects of the transaction is the amount of historical work already completed on the asset.

According to the company, approximately US$25 million was invested in exploration activities between 2007 and 2011. This included 1,800 kilometres of 2D seismic work, 420 square kilometres of 3D seismic acquisition, and the drilling of the Itheria-1 exploration well to a depth of 2,072 metres.

The existence of seismic datasets and a previously drilled well means future exploration programs can build upon an established technical foundation rather than starting from an entirely unexplored position. The company intends to apply modern seismic processing techniques to historical datasets in an effort to refine prospect interpretations.

Management believes this approach could improve target definition ahead of future drilling campaigns planned for 2027.

Resource Potential Draws Market Attention

A significant factor behind investor interest is the historical prospective resource estimates associated with Block 9.

The company noted that previous assessments prepared by RPS Energy for former block owners identified best-estimate prospective resources of 338 million barrels of oil equivalent at the Itheria prospect and 102 million barrels of oil equivalent at the Bashaer prospect on a 100% block basis.

Importantly, these figures were not prepared by AXP and relate to prospective resources rather than discovered reserves. The company has repeatedly highlighted that prospective resources carry both discovery risk and development risk, and there is no certainty that commercially recoverable hydrocarbons will ultimately be identified.

Nevertheless, the scale of the historical estimates has become a key focal point for investors because they illustrate the exploration upside that management believes exists within the acreage.

Furthermore, company disclosures indicate that the two evaluated prospects occupy only a portion of the total block area, suggesting additional exploration targets could emerge from future geological studies.

Syria's Reopening Creates a New Operating Environment

The timing of AXP's entry is closely linked to significant regulatory and geopolitical developments that occurred during 2025.

The company highlighted the removal or suspension of sanctions by the European Union, United Kingdom, Australia, and the repeal of the US Caesar Act. In addition, Syria reportedly introduced reforms allowing 100% foreign ownership, creating a more accessible framework for international energy companies.

Management argues that these developments have generated a limited first-mover opportunity for companies seeking exposure to Syria's petroleum sector during its reconstruction phase.

The company also referenced reported interest from major international energy companies including Chevron, ConocoPhillips, TotalEnergies, Eni, and QatarEnergy. While these developments do not directly affect Block 9, they provide context regarding renewed international attention toward the country's energy industry.

For investors, the broader significance lies in the possibility that increasing foreign investment could support infrastructure rehabilitation and future hydrocarbon development across the region.

Operational Roadmap Through 2027

The next phase of activity will focus on technical evaluation and exploration planning.

AXP has outlined an initial work programme involving seismic reprocessing and reinterpretation of both 3D and selected 2D datasets. These activities are expected to continue through the first half of 2027.

Following completion of the technical review, the company plans to advance drilling preparations. Current plans include a potential re-entry of the suspended Itheria-1 well and the drilling of the Bashaer-1 exploration well during the fourth quarter of 2027.

These milestones are expected to serve as key catalysts for future market attention. Exploration companies often experience heightened investor interest as drilling programmes approach because well results can materially alter assessments of asset potential.

Until those activities commence, investors are likely to focus on seismic interpretation updates, permitting developments, operational planning, and funding requirements.

Oklahoma Operations Remain Part of the Portfolio

Although the Syria transaction has become the dominant near-term narrative surrounding AXP, management has indicated that the company will continue pursuing development opportunities across its existing Oklahoma acreage.

The company maintains approximately 1,400 acres of leases in Kay County and intends to advance field development initiatives alongside its new international exploration strategy.

Maintaining activity in Oklahoma provides AXP with operational diversification while the Syria project progresses through its evaluation and planning stages.

Conclusion

AXP Energy's entry into Syria's Block 9 represents one of the most significant strategic developments in the company's recent history. The transaction provides exposure to a large acreage position within the Palmyride Basin, supported by historical seismic data, prior drilling activity, and previously reported prospective resource estimates. The share price response following the announcement indicates that investors are paying close attention to the potential implications of the deal. However, the project remains firmly in the exploration stage, with substantial technical, operational, regulatory, and commercial milestones still ahead. Over the coming quarters, market attention is likely to focus on seismic reinterpretation progress, partnership developments, funding commitments, and preparations for the planned drilling programme targeted for late 2027.