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Austrian oil pumps $2.141m into ADX Energy coffers

Updated: May 1


ADX Energy’s Anshof permanent production facility installed at its Anshof-3 area in Upper Austria. Credit: File

ADX Energy’s (ASX: ADX) Vienna oilfield production pumped $2.141 million into its bank account after pumping out 177 barrels of oil equivalent per day (BOEPD) in the past quarter, with a higher oil output now on the company’s horizon.


During the March quarter, management also rebooted production from its Anshof-3 well after the successful completion of its permanent production facility (PPF) in Upper Austria.


ADX’s latest quarterly cashflow and activity statements released today show a productive quarter. Despite a dip in production because of corrosion and sand influx issues, sales from the average of 177 BOEPD generated revenue of $1.83 million.


The company says it is confident it has remedied some of the issues it faced during the quarter and sees tailwinds ahead, such as the improving oil price outlook. It finished the quarter with a healthy cash balance of $7.161 million and said it secured a further $540,000 in sales after the reporting period had ended.


It has been an exceptional quarter for your Company with the gas liquids discovery at Welchau-1, the installation of the Anshof permanent production facility and preparation for recommencement of production at Anshof3.
ADX Energy executive chairman Ian Tchacos

Tchacos said the company would now look to test its Welchau-1 discovery and drill an oil development well at Anshof and a gas exploration well in Upper Austria, in addition to potentially deepening Welchau-1.


ADX says it successfully produced the regulatory limit of 36,000 barrels of oil for test production at its Anshof-3 well before it was shut-in from September last year. The PPF was then declared ready for operation on April 3.


The well is located in the Anshof Field area within the company’s ADX-AT-II licence in Upper Austria and encouragingly, it has shown to be churning out water-free oil during the production process.


The PPF was permitted for production in November last year, with project site works and installation starting soon after. All work including precommissioning and commissioning was completed on time and on budget, according to the company.


ADX says the facility is capable of producing oil from more than one well and has a maximum capacity of some 3000 barrels of oil per day. It also has additional storage capacity.


It can use associated gas for power generation and has improved automation that requires less manual operation. It requires no onsite manpower and can be operated around the clock using wireless data transmission.


The Austrian mining authority has granted permits for the new facility that will not subject it to the same limits as a production test run, enabling the company to aim for continuous ramp-up of its daily output.


The benefit this quarter is that production will help boost revenue numbers as management aims for 150 BOEPD, up from the 134 BOEPD the well began pumping out upon its restart. It will result in two income streams, with both the Vienna oilfield and Anshof-3 in production.


ADX has a 50 per cent economic interest in the Anshof discovery area and a 60 per cent interest in the Anshof-2 well and the ADX-AT-II licence.


The company remains bullish on Welchau-1 after well operations finished last month. It says it has seen hints of gas condensate and light oil in just two downhole pressurised samples that made it back to surface after the downhole tool got stuck.


However, ADX says the fact that gas flowed to surface in addition to gas condensate and light oil shows in the two fluid samples that were recovered, represents a significant success. The well has now been cased off and temporarily suspended and the company says its confidence in its potential remains undiminished.


Management recently concluded a massive data analysis program that will be used to design a flow testing campaign that is expected to kick off in October. The program analysed results from logging, fluid sampling, coring and hydrocarbon shows.


The potentially large-scale Welchau prospect is in the heart of Europe. It features shallow drill depth and is near major gas pipelines.


The company says Welchau has exceptional gas resource potential, with estimated technical prospective resources of 807 billion cubic feet equivalent (BCFE), or 134 million barrels of oil equivalent (MMBOE).


ADX has executed an energy investment agreement with MCF Energy for the latter to fund half of the Welchau-1 well costs up to a cap of €$5.1 million (AU$8.4 million) to earn a 25 per cent economic interest in the Welchau Investment Area – which is part of ADX’s ADX-AT-II licence.


The Welchau Investment Area contains the Welchau gas prospect and other emerging oil and gas plays. ADX will retain a 75 per cent economic interest in the Welchau Investment Area upon MCF’s funding obligations being completed.


The company is undertaking ongoing planning and preparation for drilling the Anshof-2 sidetrack well in work that will include an assessment of the best drill targets. It is also looking to farm out some of its mature gas prospects within its 100 per cent equity acreage in the ADX-AT-1 licence area.


With oil flowing from two of its projects and ADX seeming to increase its hydrocarbon prospects on a regular basis, it will now be interesting to see what the upcoming quarterlies reveal.


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