What the Empyrean Farm-In to Fund the GOLD-1 Well Means for ADX Energy

Sonal Goyal

29 September 2026 10:49 PM AEST

What the Empyrean Farm-In to Fund the GOLD-1 Well Means for ADX Energy

Image Source: Shutterstock

You are reading a free article with opinions that may differ from the recommendation given by Kalkine in its paid research reports. Become a Kalkine member today to get access to our research reports, in-depth technical and fundamental research. Learn more

Start Your Free Trial Now!

ADX Energy Limited (ASX:ADX) announced on 14 September 2026 that it has attracted its first industry partner for the GOLD gas prospect in Upper Austria, signing a Binding Heads of Agreement (BHOA) with AIM-listed Empyrean Energy plc. Under the agreement, Empyrean will earn a 10% economic interest in the GOLD Cluster Area within the ADX-AT-II licence by funding EUR 555,400 — representing 20% of GOLD-1 drilling and testing costs. The deal partially funds the second well in ADX's shallow gas drilling programme, with the GOLD-1 well targeted to spud during Q4 2026.

Terms of the Empyrean Farm-In

Empyrean paid a non-refundable option fee of EUR 50,000 for an exclusivity period until 16 October 2026 to finalise the Energy Investment Agreement (EIA) documentation. Upon execution of the EIA, Empyrean will fund EUR 555,400 — 20% of the GOLD-1 drilling and testing costs — to earn a 10% economic interest in the GOLD Cluster Area. Upon satisfaction of this Earn-in Obligation, Empyrean will hold a 10% participation in the Partnership to be formed for hydrocarbon exploration, development, and production in the GOLD Cluster Area. ADX VIE GmbH, ADX's 100%-owned Austrian subsidiary, is the operator of both the ADX-AT-II and ADX-AT-I licences.

The GOLD Prospect and Programme Context

The GOLD-1 well is the second well in ADX's shallow gas drilling programme in Upper Austria, following the HOCH-1 gas discovery well — the programme's first well — which is currently undergoing production testing. ADX has matured multiple shallow gas prospects proximal to existing infrastructure within its Austrian licences. The GOLD Cluster Area is within the ADX-AT-II licence in Upper Austria, with the GOLD-1 well targeting shallow gas accumulations in a setting with established production analogues.

About the Company

ADX Energy Limited is an ASX-listed oil and gas exploration company with its primary focus on the Upper Austria basin, where it holds operated interests in the ADX-AT-I and ADX-AT-II licences. The company's strategy centres on identifying and developing shallow gas prospects close to existing infrastructure, which reduces development Capital requirements and shortens the path to gas sales.

Risks

The BHOA is conditional on finalisation of the EIA by 16 October 2026. If this deadline is not met, Empyrean's option lapses and ADX would need to fund or farm-out GOLD-1 on alternative terms.

GOLD-1 is a gas exploration well; while the setting has analogues from the HOCH-1 programme, there is no guarantee of a commercial gas discovery.

HOCH-1 is still in production testing — if that well underperforms expectations, it may affect confidence in the broader programme.

ADX retains 90% economic interest in the GOLD Cluster Area post farm-in, meaning its capital exposure to the well remains significant.

Austrian regulatory, environmental, and community considerations could affect the Q4 2026 spud timing.

What to Watch Ahead

Execution of the Energy Investment Agreement with Empyrean before the 16 October 2026 option expiry date.

HOCH-1 production testing results — the most direct read-through on commercial potential of the Austrian shallow gas programme before GOLD-1 spuds.

GOLD-1 spud in Q4 2026 and subsequent drilling, logging, and testing results.

Any gas sales or offtake developments from the HOCH-1 discovery, which would establish ADX as a revenue-generating company in Austria.

Any additional farm-in or financing arrangements to support the broader ADX Austrian programme beyond GOLD-1.

FAQs

Q: What is the HOCH-1 well and how does it relate to GOLD-1?

A: HOCH-1 was the first well in ADX's Austrian shallow gas drilling programme and resulted in a gas discovery. It is currently undergoing production testing to assess commercial flow rates. GOLD-1 is the second planned well in the same programme, targeting the GOLD Cluster Area within the ADX-AT-II licence. The HOCH-1 discovery de-risked the broader Austrian shallow gas model that GOLD-1 is testing.

Q: Why is Empyrean paying 20% of costs to earn only 10% interest?

A: This is a standard farm-in carry structure, where the incoming party (Empyrean) funds a disproportionate share of well costs to earn an interest and compensate the operator (ADX) for the geological risk already taken in generating the prospect and the cost of previous work. Funding 20% to earn 10% is consistent with typical junior exploration farm-in economics, particularly for a well with limited prior drilling proof in the immediate area.

Q: What happens if GOLD-1 is successful?

A: A successful GOLD-1 gas discovery would establish a second production or development opportunity in ADX's Austrian portfolio alongside HOCH-1. ADX would retain a 90% interest and would progress toward gas testing, well completion, and ultimately tie-in to existing Austrian gas infrastructure for sales. A back-to-back discovery in the same programme would substantially strengthen ADX's Austrian position and the investment case for further drilling.

Download Free Report – Explore 3 Stock Ideas & Industry Insights

Unlock 3 stock ideas and key industry insights in our free report. This information is general in nature and does not consider your personal objectives, financial situation, or needs. It is not financial advice.

All investments involve risk—consider independent advice before making any investment decisions.

View 3 Research Reports

Disclaimer:

This article (“Article”) has been prepared by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and its related bodies corporate who are authorised to provide general financial product advice. Kalkine.com.au and its associated pages are published by Kalkine.

Any information/advice provided in this article is general in nature and does not take into account your objectives, financial situation or needs. You should therefore consider whether the information is appropriate for your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Memorandum or other offer document (“Offer Document”) for the securities or other financial products referred to in Kalkine articles. You should obtain a copy of the Offer Document and consider it before making any decision about whether to acquire the security or financial product.

Kalkine strongly recommends that you seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) before acting on any advice/information in this Article or on the Kalkine website. Not all investments are appropriate for all people.

The information in this Article and on Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of the information contained in its articles (including this Article), newsletters and websites. All information represents our views at the date of publication and may change without notice.

The information in this Article does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products.

Kalkine does not issue, sell or deal in any financial products.

This Article may contain information on past performance of particular investments. Please note past performance is neither an indicator nor a guarantee of future performance.

To the extent permitted by law, and excluding any dishonesty or gross negligence by Kalkine, Kalkine disclaims and excludes all liability for any direct, indirect, implied, punitive, special, incidental or other consequential loss or damage arising from the use of or reliance on this Article, the Kalkine website and any information published on the Kalkine website without any warranties or representations by Kalkine to you. To the extent the law prohibits or limits this exclusion, Kalkine limits its liability to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

Employees and/or associates of Kalkine and its related entities may hold interests in the securities or other financial products covered in this Article or on the Kalkine website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.

Some of the images/music that may be used in the Article are copyright to their respective owner(s). Kalkine does not claim ownership of any of the pictures displayed/music used in the Article unless stated otherwise. The images/music that may be used in the Article are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated or was found to be necessary.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.