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Writer's pictureJames Pearson

ADX Energy gears up for Austrian flow test, reveals oil resource


ADX Energy’s drill rig at the site of its Welchau-1 discovery well in Upper Austria. Credit: File

ADX Energy (ASX: ADX) has revealed a new appraisal of its successful Welchau-1 discovery well in Upper Austria, with a belief that it may now be holding a mean prospective resource of 85 million barrels of oil equivalent (MMBOE).


In laying out a timetable for flow testing and appraisals today, the company says the well is also more likely to be a light oil and associated gas find rather than a liquids-rich gas discovery as previously predicted.


Plunging a total depth of 1733m in March, the wildcat was suspended after hitting three primary hydrocarbon zones. At the time, ADX saw consistent signs of oil and gas before it was closed off and lined using a 7-inch casing in readiness for flow tests after the Austrian winter operating window reopens next month.


Testing and appraisals are now marked to begin next month in what the company sees as a critical phase in confirming reservoir productivity, connected volumes and the overall potential for further future exploration wells.


When the well was first drilled, the intention was to target up-dip from the same formations as the Molln-1 well, which was drilled in 1989 and tested rich condensate gas. However, ADX’s data has since indicated that Welchau-1 may instead hold mostly light oil and associated gas.


From further studies, management has now concluded that the estimated prospective resources may be as low as 12MMBOE in a conservative scenario to a high estimate of 217MMBOE, with a mean of 85MMBOE – highlighting significant upside potential.


Next month’s testing program will focus on uncovering the type of reservoir fluids, flow capacity and reserve potential across the deeper Steinalm formation and the Reifling formation. As the drilling in March ended in hydrocarbons in the bottom of the well, ADX also plans to assess deeper exploration potential beyond the current well depth, which may unlock further reserves.


In addition to Welchau, the company is exploring its nearby Rossberg prospects, 6km to the north-west, which show similarly promising geological features.


Coupled with the Welchau discovery, ADX has been busy pumping oil from its Vienna oilfield, producing 177 barrels of oil equivalent per day (BOEPD) and $2.1 million in cash in the June quarter. The company is hoping to crank up the daily production further with the reopening of the Anshof-3 well – previously shut in after producing the regulatory limit of 36,000 barrels of oil for test production – now that construction of its permanent production facility (PPF) nearby has been completed.


The development of the Welchau field could be highly beneficial economically given its proximity to infrastructure and Austria’s state-of-the-art refinery near Vienna. With Austria importing 92 per cent of its crude oil needs, a significant domestic light oil discovery would contribute to national energy security, while also offering ADX a quicker path to production compared to gas projects.


Well-funded with more than $8 million in the bank, the upcoming months may prove pivotal for ADX as it increases production at the Vienna field and embarks on an extended testing program. Investor interest is likely to be piqued at the prospect of results that could confirm Welchau-1 as a cornerstone discovery for the company and in Austria’s hydrocarbon landscape.


Is your ASX-listed company doing something interesting? Contact: office@bullsnbears.com.au

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