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ADX Energy deal clears pathway for Anshof drilling in Austria

Anshof field area partnership approved. Credit: File

The Anshof field area partnership between ADX Energy and European energy giant MND Austria has been approved, clearing the way for immediate preparations to start drilling the Anshof-2 well in Austria.

The deal will see ADX receive $19.2 million from MND in exchange for a 30 per cent interest in the Anshof oil asset that contains 5.2 million barrels of gross reserves and is modelled to produce between 750 and 1000 barrels per day from three high-angle development wells.

The approval from the Republic of Austria’s Ministry of Finance green-lights the deal, which will see two broad cash payments jump into ADX coffers – $11.025 million in initial firm payments and a further $8.175 million contingent upon the yet-to-be-drilled Anshof-2 well meeting performance testing criteria.

ADX says the initial cash injection is comprised of $2.225 million in back costs and $8.8 million to fund its upcoming drilling, completion and tie-in of the Anshof-2 and Anshof-1 wells, which will be drilled from the same surface location as the Anshof-3 discovery well.

The contingent payments will be made up of a further $2.225 million in back-payments and $5.95 million to fund Anshof development work, which may include further drilling.

Anshof-2 has the potential to substantially increase production and reserves at Anshof. The documentation of the partnership model developed for Anshof also provides an accepted model for further co-investment transactions with MND and other parties in ADX’s Upper Austrian exploration acreage where ADX has an extensive portfolio of drillable prospects that are attracting industry attention. ADX Energy executive chairman Ian Tchacos

Upon MND meeting its funding obligations, ADX will remain operator and retain a 50 per cent economic interest in the Anshof field area. MND will hold a 30 per cent interest, while existing partner Xstate Resources has the remaining 20 per cent.

ADX will retain a 100 per cent interest in the remainder of the ADX-AT-II exploration area, separate to the Welchau Area where the company has an 80 per cent economic interest in a joint venture with Canadian company, MCF Energy.

The Anshof field currently has one well – Anshof-3 – which is producing oil at about 120 barrels of oil per day (BOPD). ADX says it plans to drill the Anshof-2 appraisal and development well in this year’s fourth quarter and expects to see a substantial increase in oil rate as a result.

The company says it plans to drill the Anshof-1 well in the first half of next year and will commission a permanent surface production facility to handle the product.

ADX says the deal with MND can be used for further co-investment opportunities in its upper-Austrian exploration acreage, including the Welchau gas investment area about 20km to the south. ADX and MND have already planned, but not finalised, a gas exploration investment program in part of the ADX-AT-I licence area that sits about 60km west of Anshof and contains many leads.

Management says co-investment transactions in its upper-Austrian exploration acreage are an important element of its funding and risk mitigation strategy.

ADX’s exploration portfolio now features 20 prospects totalling 213 million barrels of oil equivalent (MMboe). It says 195 MMboe lies within the high-impact exploration or trend exploration categories, with about 18 MMboe added to the low-risk, low-cost appraisal/exploration category – an increase of 340 per cent due in part to the company leveraging AI to detect stratigraphically-trapped reservoir sands on 3D seismic.

With two appraisal and development wells planned in an already producing field, ADX is looming as one to watch in the coming months.

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