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ADX Energy Drilling Set to Commence at Welchau Gas Prospect in Austria

12 February 2024 13:27
ASX:ADX
ADX Energy Drilling Set To Commence At Welchau Gas Prospect 1

ADX Energy Ltd (ASX:ADX) has announced the mobilisation of the RED E202 drilling rig is set for February 14th, with drilling to follow on the 20th, marking the start of a hopeful exploration campaign pursuing the significant gas resource potential at Welchau.

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Figure 1: Map showing ADX-AT-II license area and the Welchau-1 drilling location in the Northern Calcareous Alps

Key Operational Details

The Company has now fulfilled all regulatory requirements for drilling operations at Welchau-1 and has completed well site construction, paving the way for a successful drilling campaign.

The mobilisation of the RED E202 drilling rig, scheduled for the 14th of February, signals the beginning of a significant operational phase.

The rig move and assembly process, estimated to take six days, will culminate in the commencement of drilling on the 20th this month, with the drilling anticipated to take approximately 39 days.

Financial Partnership

Through an Energy Investment Agreement with MCF Energy Ltd., ADX has secured funding for 50% of the Welchau-1 well costs, up to EUR 5.1 million.

In exchange, MCF will earn a 25% economic interest in the Welchau Investment Area. Upon completion of MCF’s funding obligations, ADX will retain a 75% economic interest, reflecting the collaborative approach adopted by both parties to advance exploration initiatives.

Resource Potential

The Welchau gas prospect boasts significant resource potential, situated in a strategically advantageous location, at a relatively shallow drill depth and in close proximity to gas pipelines.

ADX estimates the best technical Prospective Resources of Welchau to be 807 BCFE (134 MMBOE), targeting reservoirs similar to those of the nearby Molln-1 well, which exhibited promising gas flow rates in 1989.

This positioning aligns with ADX’s strategy of targeting high-potential assets in accessible regions conducive to efficient resource extraction.

Exploration Outlook

Prospective Resources require further exploration, appraisal, and evaluation to ascertain the presence of commercially viable hydrocarbon reserves.

ADX remains committed to conducting thorough assessments to unlock the full potential of the Welchau prospect and capitalise on opportunities for future development.

Operational Readiness

ADX has diligently prepared for drilling operations, securing necessary services and long lead items while ensuring compliance with safety, noise, and environmental standards.

The Company’s track record with the RED E202 drilling rig, evidenced by the incident-free and within-budget drilling of previous wells in Austria, instills confidence in its operational capabilities.

Moreover, ADX prioritises local engagement, relying on highly trained local staff to deliver services, thereby contributing to community development and fostering a culture of safety and environmental stewardship.

ADX Energy’s Australian Stock Exchange-listed share price is currently trading at $0.10 (1.15pm UTC+ 8 hours).

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