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ADX Energy nails $19.2m deal in Austrian oilfields

ADX Energy has made a $19.2 million deal at its Anshof oilfield. Credit: File

Perth company ADX Energy will receive $19.2 million from European energy giant MND in exchange for a 30 per cent interest in its Anshof oil asset in Austria that contains 5.2 million barrels of gross reserves.

The deal will see two broad cash payments jump into ADX coffers – $11.025 million in initial firm payments, with a further $8.175 million contingent upon the yet-to-be-drilled Anshof-2 well meeting performance testing criteria.

The company 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 Asnhof-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.

Management says the energy investment agreement will kick off in this year’s fourth quarter when Anshof-2 well drilling commences. Drilling of the Anshof-1 well is expected to follow in the first half of next year.

Completion of the transaction is subject to the approval of the deal by the Austrian Ministry of Finance. Once complete, ADX will retain a 50 per cent interest and remain the project operator, with MND and existing joint venture (JV) partner Xstate Resources respectively owning 30 per cent and 20 per cent.

The Board of ADX is delighted to have entered into an investment agreement with MND which will accelerate the development of the Anshof field. The Anshof field has an independently assessed 2P reserves base of 5.2 million BOE1 which can deliver significant cashflow with the drilling of further wells. MND brings a substantial funding package of up to EUR 11.52 million as well as extensive experience and operating capability across Europe. We are also very encouraged that MND intends to participate in exploration drilling opportunities within ADX’s exploration licences which is further industry recognition of the potential of our portfolio in Austria. ADX Energy executive chairman Ian Tchacos

The Anshof oilfield has been an active producer for ADX since it was discovered via the Anshof-3 well last year. The company says production performance to date has exceeded its expectations, flowing at an average stable rate of 113 barrels per day (BOPD) of light crude oil during production testing.

Insignificant pressure decline was observed after the cumulative production of about 10,000 barrels. Strong pressure support was confirmed by pressure build-up at the end of the shut-in period and estimated at 165.8 bar, compared to an initial reservoir pressure of 169.4 bar based on surface pressure measurement.

Management believes that once Anshof-3 production is boosted by Anshof-1 and 2, the cumulative rate for the field is expected to be about 750 to 1000 BOPD and it plans to commission a permanent surface production facility to handle the product.

Outside of the Anshof field area, but still covered by the newly-formed energy investment agreement, ADX will retain full ownership of its current ground, except for the area surrounding its exploration flagship Welchau gas prospect where ADX holds an 80 per cent economic interest along with Canadian company MCF Energy.

Welchau follows up on an accidental gas hit back in oil-focused 1989 when the Molln-1 well stumbled across a 400m gas column. The well produced gas at 3.5 million cubic feet of gas per day for 16 days, with a rich 40 barrels of condensate per million cubic feet of gas.

An independent review of the potential size of Welchau suggested a best estimate of the prospective resources of 807 billion cubic feet gas equivalent. The company plans to drill Welchau next month and expects drilling operations to take about two months.

ADX has worked up four more gas leads along the 100-square-kilometre Welchau structure that boasts shallow reservoirs about 1120m below the surface – about an 18km tie-in distance from Austria’s national gas pipeline network.

Further afield, the company has been busy topping up its exploration portfolio and now has 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.

Recent ADX funding comes weeks after it revealed an eight per cent increase to its Austrian oil and gas production rate for the past quarter, mainly from the Zistersdorf & Gaiselberg oilfields in the country’s north-east, in addition to some from the Anshof-3 extended well test.

With plenty of cash, an advanced exploration portfolio and now an experienced JV partner to develop Anshof, ADX seems poised to secure another source of energy for Austria during Europe’s now worryingly protracted energy crisis.

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