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ADX Energy’s Welchau-1 Well suspended for future flow testing

2 April 2024 10:21
ASX:ADX

ADX Energy Limited‘s (ASX:ADX) Welchau-1 Discovery Well has reached a significant milestone with its temporary suspension following casing, laying the groundwork for future flow testing.

Initial analysis of retrieved hydrocarbons suggests promising indications of condensate-rich gas to light oil within the Steinalm formation, underscoring the company’s ongoing exploration efforts and the potential significance of the Welchau discovery.

Operational overview

The Welchau-1 gas exploration well, which began on February 24th and utilised the RED Drilling & Services GmbH (RED) E200 drill rig within the ADX-AT-II exploration license in Upper Austria, concluded its operations with the release of the rig on March 28th.

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Figure 1: The RED Drilling & Services GmbH (RED) E200 drill rig drilling at Welchau

Notably, the entire operation was completed ahead of schedule and below budget, showcasing operational efficiency and cost-effectiveness.

Well data analysis

The analysis program for the Welchau-1 Well has already begun, centering on downhole pressurised fluid samples and the 7 meters of core from the Steinalm formation, with core analysis projected to last sixteen weeks and fluid sample analysis estimated at three weeks.

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Figure 2: Image of the cut section of recovered core showing the presence of a natural fracture system which is essential for gas production performance

Despite the Modular Formation Dynamic Tester (MDT) tool getting stuck during sampling, two sample bottles with minor liquid hydrocarbons were retrieved, albeit with considerable drilling mud contamination, and preliminary findings indicate resemblances to the hydrocarbon system observed in the down dip Molln-1 Well drilled in 1989.

The compositional analysis of a gas sample at ambient conditions revealed 92 mole % methane, 4 mole % ethane, along with low CO2 and absence of H2S, indicating characteristics that require confirmation through subsequent flow testing.

Further analysis encompassing viscosity and densities, will be conducted on the fluid samples, with a comprehensive PVT analysis contingent upon sample volumes.

Looking ahead, the planned production test in Q4 2024 aims to conclusively confirm the characteristics of the hydrocarbon system across the column.

Core analysis

Analysis of the core from the Welchau-1 well has begun in a specialised Vienna laboratory, revealing insights into the reservoir’s composition, with initial CT scan-based findings confirming the presence of a carbonate reservoir characterised by low matrix porosity, significant vuggy porosity, and an extensive vertical fracture network.

The triple-porosity system, consisting of matrix, vugs, and fractures, indicates potential reservoir connectivity and production performance, with further analysis, including measurements of porosity and permeability, enhancing understanding of the reservoir’s properties.

The upcoming Welchau-1 Well test seeks to confirm hydrocarbon characteristics, determine well productivity, and estimate recoverable resource volumes from potential development wells.

Executive commentary

ADX Energy Executive Chairman, Mr Ian Tchacos, emphasised the importance of temporarily suspending the well for future testing, highlighting the extensive analysis work underway to assess the resource potential of the Welchau discovery.

“The importance of successfully drilling, evaluating and temporarily suspending the Welchau-1 well for future testing ahead of schedule and below budget by our operations team cannot be underestimated. ADX has now commenced a programme of extensive analysis work that will culminate in post-drill analysis of the resource potential for the Welchau discovery,” he said.

Mr Tchacos reiterated the value of recovering hydrocarbons despite sampling challenges, expressing optimism about the forthcoming flow testing.

“Recovering hydrocarbons from the impaired down hole sampling programme provides further valuable data. We will continue to provide data analysis from the drilling of the Welchau-1 well, as we look forward to the flow testing of the exceptionally important discovery on behalf of the Republic of Austria,” he added.

ADX’s Australian Security Exchange-listed share price is currently trading at $0.12 (10:15 am UTC+ 8 hours).

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