Xstate Resources Limited informed its shareholders and the market of the results of the production test at Anshof-3, in which Xstate has 20% working interest. The Company advises that 132 barrels per day of water free oil flow has been recorded from the Anshof3 well in the ADXATII license in Upper Austria during flow testing of the Eocene oil zone. This more recent and detailed analysis incorporating down pressure data recovered from gauges in the well at the end of testing ("Pressure Data") compares very favourably with the previously announced initial flow rate of 75 barrels of oil per day.

The analysis of Pressure Data indicates better than expected reservoir flow performance from the relatively thin Eocene reservoirs encountered at the crest of the Anshof structure. The Pressure Data analysis also has indicated that there are no flow barriers close to the well. The positive flow performance at the Anshof3 well has positive implications for future Anshof appraisal and development wells down dip from the crest of structure where the Eocene reservoirs are expected to thicken considerably in some areas based on offset well data and 3D seismic attributes.

The absence of interpreted flow barriers during the test is a positive indication for future oil recovery from the planned long term Anshof3 production when processing facilities are installed. At the conclusion of testing operations, the well was acidised to further enhance productivity and a production string was installed in the well, as well as a down hole pump in preparation for long term production. The Anshof well flowed during the testing without any acidisation to overcome reservoir damage from drilling.

Acidisation has been routinely deployed in offset wells which has often resulted in substantial increases in production rates. Due to the positive test results ADX intends to install an early production testing processing facility for commercial oil sales to be delivered by truck to a nearby oil terminal with a view to generating cash flow as soon as possible and obtaining further information in relation to the greater Anshof oil accumulation. Interim production of up to 37,000 barrels (approximately 100 barrels per day for a period of one year) is allowed under Austrian legislation prior to finalising a production license for the entire discovery area which ADX has mapped to extend over an area of approximately 24 km².

The Anshof3 well was spudded at 00.30 hours on the 18th of December 2021. The Anshof3 well is located in the ADXATII license in Upper Austria. The Anshof well site has provision for up to 3 drilling slots (the well name Anshof3 stems from the fact that physical surface location number 3 which was the first approved by all necessary authorities to allow spudding of the well).

Well operations were concluded following the running and cementing of 7inch casing to a total depth (TD) of 2499 m. The RED E200 rig was released on 15 January 2022. The well has been suspended in preparation for completion with production tubing utilising a workover rig prior to testing and potential longterm production thereafter. The Anshof discovery well intersected 3 hydrocarbon bearing zones of interest in a large, high relief structure providing very significant appraisal and development potential in an onshore setting adjacent to readily available gathering, production and export infrastructure.

The Anshof3 well is expected to yield a second production asset in Austria for ADX in the near future.