ADX delivers cash-flow boost with better oil price hedge | Ralph-Lauren

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ADX Energy says it has enhanced its hedging position for production from Gaiselberg and Zisterdorf oil field assets in Austria’s Vienna Basin, serving up a cash-flow boost from the operations. The revised hedging status together with a stronger oil price are expected to provide a substantial increase in sales revenue from the two oil fields.

ADX appears to have hit the bullseye with the new contract, executed with oil and gas production titan, BP.

The company has secured fixed price swaps at an average Brent crude oil price of US$66.03 per barrel for the period from July 1 this year through to the end of December. The new contract speaks for about 40 per cent of forecast output from the Gaiselberg and Zistersdorf oil fields during the period.

Gaiselberg and Zistersdorf currently produce a combined 340 barrels of oil-equivalent per day. The new contract covers about 100 barrels of oil produced per day, equating to some 18,035 barrels for the six-month hedge period.

ADX says a previous swap contract that expired at the end of April used a fixed Brent price of US$41.77/bbl.

The new contract captures a hefty 58 per cent rise in the Brent crude oil price and appears set to bolster the company’s Austria oil operations.

A separate ADX fixed price swap contract due to expire at the end of June this year covers 40 per cent of the company’s oil production from Gaiselberg and Zisterdorf at a Brent crude price of US$44.34/bbl.

Management says that will leave 60 per cent of oil production from the two fields unhedged from the start of July.

Last year’s COVID-19 induced global economic slowdown hit the price of oil hard. In recent months a resurgent oil price has markedly improved conditions for producers and ADX seems well positioned to capitalise on the better conditions.

The company says the recent rise in the price of oil above pre-COVID levels is set to significantly boost net revenue from the Gaiselberg and Zisterdorf oil fields.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au



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