ADX ENERGY LTD — Management Reports 2011

Sep 6, 2011

Ian Tchacos - Chairman

www.adxenergy.com.au

CORPORATE SUMMARY

Share Capital
Shares on Issue		398		million
Maket Capitalisation@ 11 cents	$	43.8		million
Options _ exersize price between 25 to 40 cents_**			**31 **	million
Share Trading History		Energy Index
		ADX

 ASX listed international

• 43% interest in Riedel

• Headquartered in Perth, WA

• Operational offices in

• 15 employees

GEOGRAPHIC FOCUS

Kerkouane

Lambouka

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Dougga

Sidi Dhaher

Appraisal and Exploration assets in Sicily channel (Tunisia and Italy), onshore in Tunisia and Onshore Romania held at high equity interest

• Sicily Channel Appraisal Projects

Three existing gas condensate discoveries – Dougga (60%), Lambouka (50%) and Kerkouane (60%) totalling approx 254 mmboe of most likely resource “ ADX estimate”

• Sicily Channel Exploration Prospects

410 mmboe prospective resource defined on 3D seismic

570 mmboe prospective resource defined on 2D seismic

• Drilling multi zone Sidi Dhaher Prospect onshore Tunisia currently drilling ( 175Bcf gas and 44mmbbls ) funded by farmouts..

• Prospective acreage position in Romania in under explored but proven oil and gas province.

• Majority of drilling funded by farmouts having benefited from Operatorship and early mover advantage

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• Experienced Board and Management team

Corporate Strategy

• Early entry to high impact exploration opportunities in proven

• Commercialisation of existing discoveries

Operating Philosophy

• Maintain operatorship through the exploration and appraisal

Funding Strategy

• Fund drilling via farmouts, enabling retention of large interests

Ian Tchacos – Chairman

• Petroleum Engineer with 25 years international experience in corporate development and strategy, mergers and acquisitions, petroleum exploration, development and production operations, marketing and finance. MD of Nexus Energy Ltd – leading it from micro cap (A$2 million ) to ASX 200 Company (A$1.2 billion )

Wolfgang Zimmer – Managing Director

• Ph.D University of Vienna in Geology & Petrology with 30 years industry experience in Europe, the US and North Africa.

• Established OMV’s Exploration and Production business in Australia and New Zealand and Managed OMV’s Tunisian production assets.

Paul Fink – Technical Director

• Explorationist with 18 years of diversified oil and gas exploration and producing experience in both technical and managerial positions in Austria, Libya, United Kingdom, Bulgaria, Romania, India, Australia and Pakistan.

Andrew Childs – Non Executive Director

• Geologist with extensive experience in founding oil and gas companies in Australia. Has held a number directorships in Australian and International oil and gas companies. Extensive industry network through his career in recruitment.

Peter Ironside – Company Secretary

• Chartered accountant and business consultant with over twenty years experience in the exploration and mining industry.

• Political situation has stabilised following revolution

• Interim government in place and democratic elections scheduled for October 2011

• Transparent and open legal system

• Competent and well educated public service

• Pro development government with strong demand for energy and excellent pricing for oil and gas

• Export oriented with strong links to Europe

• Well developed infrastructure on doorstep of Europe

• Domestic oil and gas pipelines, Export oil and gas pipelines, Good port and road access

• “ Tunisia is in with a good chance of having a decent democracy and a perky economy by the end of next year, “ The Economist 14 July 2011

TUNISIA OVERVIEW

Political Situation

• Beginning of Jasmine Uprising: December 17, 2010

• President Ben Ali Departs: January 15, 2011

• Election for Constitutional Assembly: October, 2011

General

• Area: 163.610 km[2 ]

• Population: 10,6 million (July 2011 est.)

• Languages: Arabic and French

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Oil Industry Overview

• Oil Production: 70,400 bbl/d (2010 est.)

• Condensate Production: 17,000 bbl/d (2010 est.)

• Gas Production: 264 mmcf/d (2010 est.)

• Operators:

• 50

Data Source: ETAP

• Government type: Republic (1956)

• GDP (purchasing power parity): US$ 71.5 billion (2010 est.)

• GDP – real growth rate: 3.8% (2010 est.)

1932 – 2007:

• Wells: 669 drilled; 120 discoveries

• Investment: US$ 1.7 billion + seismic

• GDP – by sector: services 53.7%, industry 35.3%, agriculture 11% (2008 est.)

Data Source: IMF

• Sidi Dhaher Well Spudded 26 August 2011 – a DHI supported, multi target, onshore .

• prospect - mean prospective resource exceeding 70 mmboe

• Dougga Resource Upgrade – increased _Tracs report_ mean contingent resource estimates of 79 mmboe (239 bcf Sales gas and 41 mmbbls liquids) based on 3D seismic. ADX most likely estimate is approx 110 mmboe.*

• Sicily Channel Prospect Inventory – new 3D seismic mapping generated three prospects with prospective resource potential of 400 mmboe . 2D prospective potential of 570 mmboe .

• [] [New Sicily Channel Acreage Award ][- acquisition ] of prospective new offshore exploration permit d 364 C.R-.AX at 100% in Italian waters adjacent to ADX’s Tunisian Kerkouane permit. Strategic acreage position enhanced!

• Tracs is an internationally accredited engineering

• firm that undertakes competent persons reports, resource and reserves reporting

Dougga Gas Condensate Discovery (ADX operated, 60% equity interest)

Audited mean recoverable contingent sales gas resources of 239 bcf and 41 mmbbls of associated liquids (TRACS)

The ADX most likely estimate is 340 bcf . sales gas and 59 mmbbls

Lambouka Gas Discovery

(ADX operated, 50% equity interest)

Mean recoverable gas resource estimated by ADX to be 309 bcf – additional deeper undrilled potential

Kerkouane Gas Discovery

(ADX operated, 60% equity interest)

Mean recoverable gas resource estimated by ADX to be 87 mmboe

				Most Likely
				Resource Estimate
			Percentage	(mmboe)
	Discovery Name	Hydrocarbon Type	Interest	ADXestimates
	Dougga	oilorgas condensate	60%	116
	Lambouka	gas condensate	50%	52
	Kerkouane	gas condensate	60%	87
	Total mmboe			254

Large Strategic Position

DOUGGA APPRAISAL PROJECT – ADX Operator, 60% equity interest

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Background

• Gas resource discovered in 1982 with high liquids content and approx 30% CO2

• Independently assessed volumes by Tracs in 2011 (post 3D)

Gross Contingent Resources	Gross Contingent Resources	Gross Contingent Resources	(Project)
Constituent	Low Estimate (1C)	Best Estimate (2C)	High Estimate (3C)	Mean Estimate
Sales gas (bcf)	148	226	341	239
Condensate (mmbbl)	19.5	29.7	44.6	31
LPG (mmbbl)	6.1	9.3	14.1	9.9
Total (mmboe)	49.1	74.9	112.9	78.9
Tracs AGR - 2011 Competent Persons Report

• Tracs assessment included prefeasibility capital and operating costs estimation as well as a commerciality review – Project NPV US$ 1.1 billion based on offshore liquids removal: ADX most likely resource estimates equivalent to Tracs 3C estimate

Development Attributes

• Condensate Rich, Proximal to onshore, strong market and gas pricing condition

• Potential to incorporate Kerkouane, Lambouka and other discoveries

• Land based development with subsea wells may significantly enhance economics

DOUGGA APPRAISAL PROJECT - continued

Way Forward

 Undertake further concept engineering to confirm minimum capex option

 Continue engagement with government authorities regarding project facilitation

 Finalise Dougga appraisal and near field exploration program to establish minimum development resource and future expansion opportunities

 Secure farmout for 2 to 3 well program

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Proximal Tie-in Opportunities – gas hub development
Dougga
Dougga
West Lambouka
Independently
assessed resource
2010 Gas Discovery
Near field prospect
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SURFACE LOCATION
KERKOUANE - 1
A (108m Water Depth) A’
Ain Grab / Nilde Limestones
TD 1352m
Ketatna limestones
Cretaceous Reservoir
A’
a
Kerkouane-1
A 5km
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• Sidetracked and then P&A in 1981 after massive gas kicks

• Solvent cut oil shows

• Cretaceous Abiod not reached !!

• Shell has acquired long offset 2D seismic survey in adjacent block and also in ADX Kerkouane block:

• ADX will get 104 km of new seismic data, to be processed by Shell

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Kerkouane-1
Discovery
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Prospect Inventory

Combined most likely contingent and prospective resource potential identified on 2D and 3D seismic data:

• 1.15 billion boe prospective resource potential estimated by ADX

Near Term Objectives

• Move significant contingent resources into reserves category through appraisal of Dougga

• Drill of material and prospective near field targets in the 3D area.

• Mature 2D prospects to drillable status

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Kerkouane
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• Assess impact of exploration efforts

• by our neighbours

MOST LIKELY PROSPECTIVE RESOURCES - 3D SEISMIC COVERAGE

Prospect Name	Status	Resource Estimate [mmboe]	Likely Fluid
Lambouka-Deep*	Drill Deeper - Exploration	126	gas condensate
Dougga West	Near Field Exploration	226	oil or gas condensate (resource base on Birsa oil case)
Elissa	Exploration	57	gas condensate
TOTAL COVERED BY 3D SEISMIC		409 mmboe

*Lambouka – Deep is undrilled potential at the Cretaceous level

MOST LIKELY PROSPECTIVE RESOURCE – 2D SEISMIC COVERAGE

Prospect / Lead Name	**Status **	ML Resource [mmboe]	Predicted Fluid Type
Kerkouane*	Appraisal	87	gas condensate
**Lambouka Overthrust **	Exploration	17	gas condensate
**Tazerka - North **	Exploration	24	oil
**Galliano **	Exploration	122	gas condensate
**East Galliano **	Exploration	146	gas condensate
**North Zibbibo **	Exploration	20	oil
**Cap Bon Mare **	Exploration	77	gas condensate
Carthage	Exploration	79	gas condensate
TOTAL COVERED BY 2D SEISMIC		572 mmboe

• The Kerkouane discovery intersected a gas column at the Ain Grab formation - Cretaceous potential remains undrilled

Exploration Highlights

• Provides rapid commercialisation potential

• Large undrilled onshore structures in producing oil and gas province

• High quality seismic definition available over prospects and leads

• Short distance access to onshore pipelines, strong gas market and oil equivalent pricing conditions

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• Follow up potential in a large prospective permit (2,438 km²)

• 175 bcf most likely gas potential

• 44 mmbbl most likely oil potential

• Deeper gas potential not included

• Challenger Rig 37 on Sidi Dhaher location, drill pipes in foreground.

• View from rig floor, desander and degaser units in foreground, green geotextile covered mud pits in mid ground.

• Radiators for cooling diesel engines in foreground.

• Local community members in front of medical unit cueing for a medical check.

• Rig inspector on top of a mud tank, desander unit on his right.

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SIDI DHAHER-1 Drilling Status

SE

SDHR-1

NW

Current status: Casing operations Casing Depth: 1001 meters; 13 3/8”

EL-G. GAS

Target 1: reach late this week: 175 bcf* gas

9 5/8” casing

ABIOD OIL

BIRENO OIL

2 Cretaceous oil targets (Abiod, Bireno): reach in 12 – 15 days; 44 mmbbls* each

TD: 2200 m

1 km

*** Prospective resources, most likely recoverable**

Target – 1 Map

ADX Operator – 60% Interest

Highlights

• Parta Block awarded at 10th bid round in October 2010

• Concession agreement signed with NAMR in January 2011

• Parta is a prospective permit in a proven and producing hydrocarbon province in Romania

• 1,200km² acreage with eleven identified leads

• Located in a European Union Country with favorable tax and royalty conditions

• Easy access to local infrastructure and European markets

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Strategy

• Acquire modern 2D and 3D seismic (first time in permit) in oil & gas producing area

• Low cost seismic and low cost drilling in area with access to European gas markets

RIEDEL RESOURCES

• 42.94% interest in issued Share Capital

Highlights

• Listed on the ASX 27 January 2011 (RIE)

• Competent, independent management and funding to progress asset base

• High order projects in proven mineralised districts of WA, including exposure to the emerging DeGrussa copper-gold trend

• Existing inferred gold resources – with potential for expansion and development

• Mature, drill ready targets - Au, Cu-Au and Ni targets on core project areas

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• Aggressive exploration with key exploration milestones by 2012

• Sidi Dhaher exploration well - onshore Tunisia SPUDDED 26/8/2011

• Multi target Onshore Prospect funded via farmout

• Dougga appraisal program and Sicily Channel Exploration Program

• Dougga pre feasibility studies

• Dougga + Exploration well farmout

Q3 & Q4 2011 Q3 & Q4 2011

• Drill Dougga gas field appraisal well

2012

• Test Lambouka well and or near field exploration

• Follow up exploration well (i.e. Dougga - West)

• Acquire seismic onshore Romania

2012 2012 Q4 2011

DISCLAIMER

Ian Tchacos Chairman Wolfgang Zimmer Managing Director Paul Fink Technical Director Office Suite 6, Level 2, 11 Ventnor Avenue West Perth, WA, 6005 T: 61 8 9226 2822 F: 61 8 9226 5333 Website www.adxenergy.com.au

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Website

Email

admin@adxenergy.com.au

ASX Code

ADX