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Writer's pictureDoug Bright

Welchau-1 gas hit scorches market with ADX Energy price hike

Updated: Mar 25


A cut section of ADX Energy’s recovered core shows a high degree of natural fracturing, essential for gas well production performance Credit: File

ADX Energy (ASX: ADX) says it had plunged 1733m into its Welchau-1 gas well in Austria by yesterday, recording 115m of liquids-rich gas between 1452m and 1567m and triggering an ASX share price hike of 100 per cent.


The deepest gas shows were encountered in the well at 1645m and management says the discovery could yield “an exceptional gas resource” not only for the company and its partner MCF Energy, but also for Austria in general.


An update today, which prompted the share price jump to 23c from a close last week of 11.5c, shows drilling intersected the targeted mid-Triassic age Steinalm Formation at 1452m. The 115m liquids-rich gas column was logged within the formation at depths of between 1452m and 1567m.


ADX had previously stated that its targeted depth sat between 1100m and 1800m. The company says the targeted Steinalm Formation is the same zone that was tested back in 1989 in the down-dip Molln-1 gas discovery well that yielded condensate-rich gas flow at a rate of 4 MMscf (million standard cubic feet) per day.


The results are in line with pre-drill expectations confirming the exceptional geo-technical work by our Vienna team and local and international experts. ADX plans to execute its success case evaluation program for the well which will include electric line logging, down hole sampling, inflow testing and pressure measurement to confirm the reservoir characteristics and the hydrocarbon composition.
ADX Energy executive chairman Ian Tchacos

Management is targeting Welchau-1 with a best technical prospective resource of 807 billion cubic feet equivalent (BCFE) of gas within relatively shallow reservoirs up-dip from the Molln-1 gas discovery.


Significantly, gas composition analysis shows that Welchau gas is of similar make-up to that tested at the Molln-1 well, adding to the indicated potential of the field partly through implied continuity and validating ADX’s pre-well program modelling.


Gas ratio plots show the C1 (methane) to C5 (pentane) ratio also supports the interpretation of a permeable reservoir being present. That is a positive aspect further supported by other drilling observations, including a high degree of fracturing recorded in the cut core section of Steinalm Formation carbonate.


Half of the drill costs to a cap of €5.1 million (A$7.7 million) are being funded by MCF in return for a 25 per cent interest in the Welchau Investment Area. ADX will hold a 75 per cent economic interest in the Welchau Investment Area and retains a 100 per cent economic interest in the remainder of the ADX-AT-II license, other than the Anshof discovery area.


The company says drilling is continuing with well penetration rates returning to the level anticipated in its original plan. Savings made while drilling the 12¼-inch section will likely result in a success case well program in line with the predicted dry hole cost.


Management says once the well hits its total depth, it will run wire-line logs, down-hole pressure measurements, inflow testing and formation fluid sampling across the zones of interest. It will then case and suspend Welchau-1, pending further data and economic assessments.


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