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ADX Energy Drills Deeper into Austrian Oil Reserve

4 March 2024 15:38
ASX:ADX

ADX Energy (ASX: ADX) is advancing the potential of its extensive European oil portfolio, with recent updates revealing that the Welchau-1 gas exploration well has reached a depth of 640 metres in a 12 ¼ inch hole.

Drilling into Austrian Oil

Nestled within Austria’s esteemed Vienna Basin, Welchau-1 boasts exceptional gas potential, as estimated by the company, with the best technical Prospective Resources of 807 BCFE.

The well’s focus is on gas reserves within the mid-Triassic age Steinalm formation, situated between depths of 1100 and 1800 metres, a prospect unveiled by the nearby Molin-1 well, which yielded condensate-rich, pipeline-quality gas at a rate of 4.0 MMSCFPD.

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

The rig was mobilised to the site on February 24th, and drilling progress has been swift, with the well already reaching a depth of 120 metres in a 17 ½ inch hole since the company’s last update on February 26th.

Given the Vienna Basin’s renowned oil pedigree, Welchau-1 occupies a prime location for potential offtake, situated near pipelines leading to both the Vienna refinery and gas pipeline.

Cashed Up

Moreover, ADX is poised to receive substantial funding for Welchau-1, as the company has recently entered into an economic investment agreement with MCF Energy Ltd.

This agreement entails MCF Energy funding 50% of Welchau-1 well costs, up to a maximum of EUR 5.1 million.

In exchange for this investment, MCF Energy will have the opportunity to acquire up to a 25% interest in the Welchau Investment Area, encompassing the Welchau Gas Prospect along with several other promising oil and gas prospects.

Looking Ahead

The RED Drilling & Services GmbH (RED) E200 drill rig remains operational on the project, with upcoming plans to advance drilling in a 12 ¼ 12-inch hole to a depth of around 1050 metres, followed by wireline logging tool operations and the installation of 9 ⅝ inch casing with cement.

The company anticipates drilling the well to a total depth ranging between 1500 and 1900 metres, while also acknowledging significant media interest in Austria regarding the need for gas exploration.

“Importantly, Austrian news reports are very positive due to a growing recognition of the
importance of gas exploration in Austria to provide security of supply, economic benefit and lessen the dependence on Russian gas imports,” Executive Chairman Ian Tchacos said.

ADX Energy’s Australian Security Exchange-listed share price has risen 9.52% and is currently trading at $0.105 (3.30 pm UTC+ 8 hours).

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