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ADX Energy set to appraise reserve upside of Anshof-2 well

ADX Energy’s Anshof structure. Credit: File

ADX Energy is poised to spud the Anshof-2 appraisal well within its AT-II license in Upper Austria as early as this Saturday.

The well will test the field’s current best estimate gross reserves of 5.2 million barrels of oil equivalent (MMboe). The company says success at the well may extend the field’s reserves base towards the independently-estimated high-side of 26 MMboe, should a deeper field oil-water contact be supported by drilling data.

The Anshof-2 well will be the second drilled into the Anshof oilfield and follows on from last year’s successful drilling of the Anshof-3 discovery well, which penetrated the crest of the structure. The interpreted oil-water contact intersected by the Anshof-3 well equates to a closure of 6.5 square kilometres and the related 5.2 MMboe 2P field reserves.

Anshof-2 will appraise the height of the oil column below that oil-water contact in efforts to firm-up the field’s reserve estimate. It is planned as a high angle hole – at an inclination of 79 degrees – and is expected to intersect about 280m of Eocene sandstone reservoir some 1.8km east of the Anshof-3 well cut point in the same reservoir section.

The predicted Anshof-2 Eocene reservoir penetration point is 80m down-dip from the lowest oil encountered in the Anshof-3 discovery well, which underpins the current reserve estimate. If oil and encouraging reservoir conditions are encountered in the Eocene sand by Anshof-2, ADX may re-interpret the field makeup and upgrade the resource estimate accordingly.

The company says it hopes the Anshof-2 well will provide data to support a reserve upgrade to as high as 26 MMboe for the field, which represents the current 3P reserves and 3C resource volumes combined. Management says success at Anshof-2 may also allow it to move reserves from the currently low-side gross estimate (1P) of 0.5 MMboe into the 2P classification, topping up the current best estimate.

The well is an important milestone for the Anshof project and provides ADX with the opportunity to establish a large reserves base as well as a potentially large increase in oil production rate. A successful well at Anshof-2 may provide the reserves base for a multi well development with a potentially large build up in production rate and cashflow. It is particularly pleasing for ADX shareholders that ADX’s share of well costs will be funded by Anshof Investment Agreement with MND. ADX Energy executive chairman Ian Tchacos.

Last year’s Anshof-3 discovery well is currently producing oil at 120 barrels per day through an early production unit constraining that rate. Following the drilling of Anshof-2, that facility will be replaced by a permanent production facility (PFF) that is to be installed at the site in February next year and is expected to have a total capacity of 3000 barrels per day.

Success at Anshof-2 is expected to contribute about 300 barrels per day to total field production with an ultimate well recovery of 0.8 MMbbls. The company says the PFF provides ample capacity to efficiently and rapidly scale up its Anshof field development, including the Anshof-1 well planned for drilling in next year’s second or third quarter.

The financial interest in the Anshof discovery area partnership sits at 50 per cent for ADX, 30 per cent for MND Austria and 20 per cent for Xstate Resources. However, Xstate today revealed it had elected not to participate in Anshof-2, pumping up the exposure at that well for the other two companies.

XST may at some point opt to buy back in, but it will have to cough up a premium of 400 per cent to the well cost.

With proven business partners and Austrian locals RED Drilling & Services currently rigging up the E-202 rig at the surface location, the market will no doubt be watching ADX’s news flow in the immediate future.

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