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ADX Energy Anshof-2 Well Strikes Eocene Oil Reservoir at Elevated Depths

11 December 2023 10:47
ASX:ADX

ADX Energy (ASX:ADX) has revealed wireline logging results that disclose a larger and higher-quality reservoir than anticipated at the Anshof-2 appraisal well, prompting a strategic decision to suspend the well for side-tracking in collaboration with partner MND following the ADX Welchau-1 well drilling.

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Figure 2: Anshof Western Lobe Map schematic showing the area of high quality thick (+10 m) net reservoir areas in yellow, superimposed by structural contours and the expected ODT up-dip of Anshof-2. A future up-dip sidetrack for oil production is expected to encounter similar or better reservoir properties than Anshof-2.

Elevated Depths

The Anshof-2 well drilled to a total measured depth of 2321 metres, approximately 40 to 50 metres higher than the prognosis in terms of vertical depth.

Preliminary petrophysical analysis of the Eocene sands has revealed a robust reservoir, boasting a net vertical thickness of at least 12 metres with a porosity of approximately 20%.

Although the oil saturation at the bottom hole location falls short of expectations, oil shows at the top of the Eocene section suggest higher saturations further up-dip.

Strategic Suspension

The decision to suspend the well is grounded in the belief that the Eocene reservoir has been penetrated close to the oil-water contact.

This is supported by the presence of a thick, high-quality reservoir section aligning with ADX’s P10 (upside) case pre-drill maps.

Additionally, the Anshof oil field’s flatter and larger structure compensates for the shallower-than-expected oil-water contact, promising a larger crestal volume with greater net reservoir thickness compared to the Anshof-3 discovery well.

The suspension of the Anshof-2 well allows for the evaluation of an optimal up-dip location, aiming for an intersection of a similar or greater thickness of high-quality reservoir sandstones. The subsequent side-tracking from the bottom of 9 ⅝ inch casing is not only a strategic move but also offers significant cost savings for the planned sidetrack development well.

Unlocking Potential

Historically, Eocene oil production wells in the basin with similar high-quality sand intersections, as seen in Anshof-2, have achieved production rates of approximately 1,000 barrels per day.

The implications of the Anshof-2 well results are substantial. The reservoir quality and net reservoir thickness, in line with ADX’s pre-drill upside case, suggest positive productivity for a future up-dip producer.

The well’s higher-than-expected entry point results in an enlarged area of the Anshof Field above the proven oil-down-to level in the Anshof-3 well, translating to a significant increase in reserves at the structure’s crest.

Well Participation and Operatorship

In terms of participation and operatorship, ADX holds a 60% economic interest in the Anshof-2 well, with MND holding the remaining 40%.

XST has chosen not to participate in the Anshof-2 well, and ADX and MND will jointly fund XST’s share of well costs. The economic interests in the remainder of the Anshof Discovery Area Partnership are divided with ADX at 50%, MND at 30%, and XST retaining its 20% economic interest.

Future Outlook

The planned release of the RED E-202 drilling rig on December 12, 2023, follows the strategic suspension of the Anshof-2 well, setting the stage for future operations.

This pause provides a crucial window to identify an optimal up-dip well location for a future side track, aiming for a reservoir intersection with high-quality sands of similar or greater thickness.

The subsequent drilling of the side track from the bottom of the 9 ⅝ inch casing not only promises significant cost savings for a future development well but is anticipated to commence following the completion of the ADX Welchau-1 well, marking a carefully coordinated sequence of actions in ADX’s exploration strategy.

ADX’s Australian Stock Exchange-listed share price is currently selling at $0.099 (10:45am UTC+ 8 hours).

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