ADX Energy : Secures US $2m Investment for Romanian Appraisal Program

4 December 2017

ADX Energy Ltd (ASX Code: ADX) is pleased to announce it has signed an agreement with Reabold Resources Plc (LSE AIM:RBD) (Reabold) to invest US$ 2 million in the recently incorporated Danube Petroleum Limited (Danube), currently a wholly owned ADX subsidiary, which (upon completion of transfers) will hold ADX' 50% interest in the Parta exploration license("Parta"), and 100% participating interest in the upcoming Parta Appraisal Program. The Appraisal Program comprises two re- drill wells planned in the second half of 2018 to test 33 BCF of prospective and contingent resources defined on recently acquired 3D seismic, spread over a total of 5 gas reservoirs. Upon completion of the US$ 2 million investment Reabold will hold a 29% shareholding in Danube.

• The Reabold investment values ADX's 71% interest in UK registered Danube at US$ 5 million.
• The US$ 2 million investment will be used to drill the first well of the two well Appraisal Program during the second half of 2018.
• The two appraisal wells will target a combination of tested contingent gas resources and log derived prospective gas resources quantified by recently acquired 3D seismic.
• Excellent economic potential due to low drilling and tie in costs, availability of proximal gas infrastructure, strong gas pricing (approximately US$ 6.2 per MCF) and excellent fiscal terms.
• Multi pay zone potential is expected in both wells. A low case single zone production case from the two well program is expected to deliver approximately US$ 13 million of post-tax NPV10 from 7 BCF recoverable gas; whereas, if all prognosed zones are successful, approximately US$85 million of post-tax NPV10 value may be realised from 33 BCF recoverable gas (assuming a multi well development).
• The Appraisal Program provides ADX with potential access to rapid cash flow.
• Additional un-risked prospective resources of approximately 300 BCF of gas and 45 MMbbl of oil have been identified on the basis of existing 2D seismic in the rest of the Parta permit which can now be targeted with recently permitted 3D seismic program.
• Danube provides ADX with a funding vehicle that is attractive for UK or European investors wanting to participate in low risk, high growth opportunities in Romania and Eastern Europe.
• ADX will provide management services to Danube, continue in its role as Operator of the Parta permit and source further investment opportunities for Danube.
• Reabold is a UK publicly listed company that invests in near-term, high growth upstream oil

Upon completion of the transferof the Partaexploration and appraisal interests to Danube, ADX will hold 3,759,400 shares in Danube valued at 1GBP per share (US$ 5,000,000 value) and Reabold will subscribe to a total of 1,503,759 shares in two tranches:

• 375,940 new shares at 1 GBP per share (US$ 500,000)

• 1,127,819 at 1 GBP per share (US$ 1,500,000) upon the issue by ADX (in its capacity as Operator) of an Authorisation for Expenditure (AFE) forthe drilling of the first appraisal well. The funds will be held in an escrow account until the AFE is issued.

Reabold has an option to subscribe to a further 375,940 shares in Danube at 1 GBP per share that expires in 6 months following the completion of the transaction.

ADX has appointed Mr Philip Haydn Slater and Mr Ian Tchacos to the Board of Danube. Reabold has the right to appoint a director to the Board of Danube.

It is the intention of ADX to source a further US$ 2 to 3 million investment in Danube by mid 2018, which will provide sufficient funding to drill a second well in the Parta appraisal program. This will also satisfy ADX's commitment under the agreement with Reabold to subscribe to or procure an investment into Danube Petroleum of at least £375,940 to fund the agreed work program at 1 GBP per share or greater.

Note 1: Refer to ASX announcement 8/8/2017 in relation to Contingent & Prospective Resources referenced in this release.

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Parta Apprai sal Program Background

A recently acquired 3Dseismicin the northern part of the ADX-operated 1,221 sqkm Parta license in Western Romania(Figure 1) has enabled ADX to delineate a number of oil and gas appraisal drilling opportunities based on historic wells which were drilled but never produced. The Parta Appraisal Program (Program) includes 2 gas redrill opportunities named after existing nearby wells and the villages of Iecea Mare ("IM") and Carpinis ("CARP"). Due to their short distance to an active oil and gas processing facility (Satchinez - Calacea) a rapid, low cost development is expected, which ensures that even relatively small resources can be developed economically.

Figure 1 : Parta Licence Location Map

The Program is expected to commence in the second half of 2018 and offer access to both contingent and prospective resource targets. Each of the wells will intersect two or more potential gas accumulations; with at least one previously tested zone in each thereby offering significant, low risk appraisal and exploration potential and a fast track to early cash flow from gas production.

Of special interest is the shallowest opportunity (approx. 1600 meters) at the new CARP location (Figure 2). Excellent reservoirquality has already been proven by a well just at the edge of the bright seismic amplitude anomaly shown in the figure below. While it has some exploration character, it offers significant upsidepotential (32 bscf P10 GIIP) and would also de-risk several othersimilarfollow up prospects already identified within the license.

Figure 2 : CARP Location Shallow Reservoir Target

With sediment input from the north, reservoirsands are pinching out against the structural high to the south, which sets up an ideal stratigraphictrapping position and allows for excellent resource upside potential. The prospect's success chances are further enhanced because the top of the prospect features a (small) 4-way dip closure located on the greater structural nose.

The table below summarizes the key five prospective and/or tested gas reservoir intervals which will be intersected by the two wells resulting in a number of possible discrete outcomes. Due to the relatively low expected drilling costs of US$2 to $3million perwell and shallow gas pool depths (around 1600 to 2400 meters), even a single well, single pool discovery can be profitably commercialized.