ADX Energy - Sicily farm-out unlocks value

Oct 05th 2012 - Edison Investment Research today published a report on ADX Energy entitled "Sicily Farm-out Unlocks Value". In summary, the report says:

While news of ADX’s unsuccessful Sidi Dhaher well test was clearly disappointing, the company still has the potential to create significant shareholder value through its Sicily Channel, Romanian and onshore Tunisian assets. However, with funds at a premium, the near-term challenges are largely commercial before it can demonstrate further progress with the drill bit. The Sicily Channel assets in particular offer considerable upside as confirmed by a recent independent resource opinion. However, to achieve this we believe ADX must secure alternative funding ahead of a suitable farm-out before any drill commitments can be made. Based on the farm-out terms ultimately achieved, we could derive a valuation range for the Sicily assets of 3.5-5.9c. This would imply a nominal valuation range...