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ADX maintain momentum at Welchau

11 March 2024 11:50
ASX:ADX

ADX Energy (ASX: ADX) maintains its rapid pace of drilling at the Welchau gas prospect, with the company announcing that the prospects flagship well, Welchau-1, has reached depth of 1028 metres in a 8 ½ inch hole.

Accelerating Gas Exploration

ADX has made significant progress since its update just last week, with the company drilling a 12 ¼ inch hole to a depth of 930 metres, running wireline logging tools, setting and cementing 9 ⅝ inch casing then commenced drilling ahead in 8 ½ inch hole in just one week.

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Figure 2: Map showing ADX-AT-II license area and the Welchau-1 drilling location in the Northern Calcareous Alps.

This blistering pace brings the company ever closer to taking advantage of the projects considerable best technical Prospective Resources of 807 BCFE, with the well targeting the mid-Triassic age Steinalm formation where the neighbouring Molin-1 well, which was able to test condensate rich, pipeline quality gas at an outstanding rate of 4.0 MMSCFPD.

The company noted that drilling is four days ahead of schedule due to penetration rates being faster than expected, with the company anticipating that Welchau-1 hit its target depth between 1100-1800 meters and complete its evaluation program as early as the 29th of March.

Enticing Evidence

While drilling is still ongoing, early results are promising, with a “quick look” interpretation of the image and drill logs of the 12 ¼ inch open hole section confirming that the rig intersected a large North-verging anticline close to the Welchau anticline structure.

Intersected Carbonate formations showed evidence of faulting, faulting and gentle folding the company interprets as resulting from deformation at the crestal location of the Welchau anticline structure which lines up with its predictions, noting that Fractures are important for enhanced productivity in carbonate reservoirs.

Additionally, minor hydrocarbons were encountered within the carbonate formations, with gas shows comprised predominately of methane, thane and propane increasing from 0.0099% to 0.1765%.

The company stated that while these formation gases are not producible, they are evidence that the Welchau-1 well location hosts an active petroleum system and that a producible gas formation may exist deeper in the targeted formation.

Looking Ahead

Despite being ahead of schedule, ADX shows no sign of slowing down, with the company now working to drill ahead in the 8 ½ inch hole to the main target.

And the explorer will be well funded to maintain this rapid pace of exploration, having executed an Energy Investment Agreement with MCF Energy Ltd for MCF to fund 50% of Welchau-1 well costs up to a well cost cap of EUR 5.1 million in return for the opportunity to earn a 25% economic interest in the Welchau Investment Area.

ADX Energy’s Australian Security Exchange-listed share price is currently trading at $0.11 (11:44 pm UTC+ 8 hours).

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