AXP Energy Secures 25% Stake in Syria's Onshore Block 9 and Launches Oklahoma Drilling Program Targeting 30+ Wells

Strategic Entry into Syria's Post-Sanctions Onshore Oil Market via Block 9 Farm-In

AXP Energy's acquisition of a 25% non-operating interest in Syria's Onshore Block 9 production sharing contract marks a significant strategic entry into a re-energized oil region following sanctions relief. Covering 10,039 square kilometres, Block 9 offers exposure to exploration upside while allowing AXP to focus capital on its Oklahoma development program. The farm-in aligns the company with major global players committed to exploration and development in the area, reflecting confidence in the geopolitical and macroeconomic environment surrounding Syrian hydrocarbons.

The farm-in structure enables AXP to participate in exploration opportunities without operational responsibilities, balancing risk and resource allocation effectively.

Exploration Potential Highlighted by 152 MMboe Prospective Resources

Block 9’s prospective resources total an estimated 152 MMboe on a 45% working interest basis, including 101 MMboe from the Itheria prospect and 46 MMboe from the Bashaer prospect. On a 100% field basis, these resources amount to 337 MMboe. These estimates, prepared by RPS Energy Canada Ltd as of 31 December 2011 under the 2007 SPE-PRMS standard, carry inherent discovery and development risks. AXP confirmed as of 23 July 2026 that no material new data has altered these estimates, which were compiled by qualified evaluator Michael C.P. Rego.

Investors should note that actual economic interests will be lower than 25% due to contract terms and royalties, with no specific economic interest percentage disclosed.

Oklahoma Vertical Well Development Program Launches July 2026

Complementing its Syrian interests, AXP is initiating a vertical well development program on 1,400 leased acres in Kay County, Oklahoma. Targeting the Mississippi Lime formation at approximately 4,300 feet depth, the program plans to drill 30+ wells focusing on a naturally fractured, liquid-rich zone with a 66% oil and 33% gas composition. This development drilling targets proven geology rather than exploratory wildcat wells.

Historical data from nearby wells drilled in 2011–2012 show initial production rates up to 374 BOE per day and a 95% drilling success rate. Estimated drill and completion costs are approximately $650,000 per well, with production achievable within 60 days post site preparation. Additional recompletion opportunities behind pipe offer optionality at roughly $70,000 per zone. AXP’s Managing Director has prior experience developing adjacent leases, establishing over 2,000 BOE per day production within three years.

Drilling Schedule Targets October 2026 Production Start

Drilling operations are set to begin in July 2026 with wells Charlie #1 and Charlie #2 progressing through planning, regulatory approvals, and mobilisation in parallel. Charlie #1 is expected to take about 10 days to drill, with Charlie #3 commencing as Charlie #1 reaches total depth. The rig will alternate between wells to maintain efficiency, while completion crews operate concurrently.

Both Charlie #1 and Charlie #2 are projected to reach production by Week 14 of the program, enabling cash flow generation by mid-to-late October 2026. The phased drilling approach allows progressive well completions, supporting data-driven decisions on accelerating further development. The schedule includes 16 wells planned between July and October 2026, providing a scalable foundation for the broader program.

Balanced Asset Portfolio Combines Exploration Upside with Cash Flow Generation

AXP’s combined strategy balances the transformational exploration potential of Syria’s Block 9 with the near-term, lower-risk cash flow from Oklahoma’s vertical well program. The company describes the Syria asset as transformational and the Oklahoma program as complementary, reflecting distinct roles within the portfolio. This approach enables capital allocation flexibility based on drilling outcomes and market conditions.

Maintaining a non-operating role in Syria allows AXP to participate in exploration while focusing operational resources on Oklahoma’s development drilling.

Experienced Management and Contractors Underpin Oklahoma Execution

AXP’s management and contractor teams bring extensive experience, having drilled and completed over 80 vertical wells in Kay County, Oklahoma. This expertise encompasses geological understanding, regulatory compliance, and operational execution specific to the Mississippi Lime formation. The Managing Director’s prior success in developing surrounding leases reinforces the company’s capability to execute the planned 30+ well program efficiently.

Historical data indicates only about 1.25% of wells were uneconomic, supporting a consistent and repeatable economic profile for the development.

Production Profile and Gas Monetization Flexibility Enhance Revenue Prospects

The Oklahoma wells’ production mix of 66% oil and 33% gas offers diversified revenue streams, with oil commanding higher prices and natural gas liquids providing a 1.3x price multiple compared to dry gas. The extensive lateral extent of the Mississippi Lime formation supports replicable drilling success across multiple locations.

AXP also considers alternative gas sales options, including off-grid arrangements with bitcoin miners, addressing potential constraints in traditional gas markets. Rapid production initiation within approximately 60 days post site preparation allows timely validation of production forecasts and reserve estimates.

Resource Estimate Disclaimers and Compliance with Technical Standards

AXP emphasizes that the Block 9 prospective resource estimates involve inherent uncertainties, with no guarantee of discovery or commercial production. The estimates comply with the 2007 SPE-PRMS standard but have not been updated to the 2018 standard. The company holds rights to earn a 25% participating interest, though actual economic interests will be reduced by contract terms and royalties. The data was compiled by qualified evaluator Michael C.P. Rego, adhering to appropriate disclosure standards for prospective resources.

Geopolitical and Operational Risks in Syrian Operations

While Block 9 is described as a post-sanctions proven oil region, Syria’s geopolitical environment presents commercial and operational risks. AXP’s non-operating status limits direct control over development decisions and operational timing. The production sharing contract’s terms, including royalties and cost recovery, will impact actual cash returns, though these specifics remain undisclosed.

The prospective resource estimates date from 2011 and may not reflect recent technical developments. Dependence on the operator’s decisions and capital priorities adds uncertainty to AXP’s participation.

Upcoming Milestones and Investor Considerations

AXP’s drilling program in Oklahoma, commencing July 2026, will serve as an early test of operational execution, cost control, and production performance. Investors should monitor initial well results, including production rates and estimated ultimate recovery of approximately 100,000 BOE per well. The progression of Charlie #1 and Charlie #2 wells through drilling, completion, and production by October 2026 will provide critical validation.

Further updates on the Syria Block 9 farm-in will likely cover transaction completion, initial work programs, and exploration timelines. Continuous disclosure under ASX Listing Rules will inform investors of material developments impacting both assets. Production data and operational metrics from Oklahoma wells will be key indicators for assessing the scalability and economics of the broader drilling program. Any deviations from forecast costs, timelines, or production performance will require careful analysis of implications for AXP’s growth strategy.