ADX Energy (ASX: ADX) has confirmed plans to drill its Anshof-2A oil appraisal well in Austria in September, in addition to diving into a gas exploration well and bringing another well into production in a busy period ahead.
The company says it remains well-funded following a $13.5 million capital raising in May as it also prepares its Welchau-1 well for production testing later this year.
ADX continues to pump some 177 barrels of oil per day (BOEPD) from its Vienna oilfield, generating $2.141 million in profit for the company during the March quarter. Following the drilling of the Anshof-2A appraisal well into the thick Eocene reservoir, a further 300 to 500 BOEPD are expected to be tied into the company’s new Anshof permanent production facility (PPF), which was brought back online in March.
Management says the PFF has a maximum capacity of some 3000 BOEPD for multiple well tie-ins and boasts additional storage capacity. 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 previous production test run where ADX was regulated to a total of 36,000 barrels of oil. It will enable the company to aim for continuous daily output ramp-up.
The well initially pumped out some 134 BOEPD upon its restart, taking the company’s total in Austria to 311 BOEPD.
Its goal is to continue drilling wells at Anshof to produce more than 1000 BOEPD by FY26. Each well drilled could net it up to $20 million in profit for at the current oil price.
The Company can look forward to production testing the large hydrocarbon column encountered at Welchau, the drilling of an appraisal well to build oil production at Anshof as well as the drilling of a high impact gas exploration prospect within its extensive Austrian portfolio located in the heart of energy-starved Europe.
ADX Energy executive chairman Ian Tchacos
The company will look to test its Welchau-1 discovery late this year after the well returned hints of gas liquids and light oil prior to the being cased off in March. Its analysis on the 450m column of gas and liquids intersected in the Welchau is ongoing, with a revised resource estimate likely to be released in early September.
The potentially large-scale Welchau prospect lies in the heart of Europe. It features shallow drill depth and is near major gas pipelines in an otherwise gas-hungry continent.
Earlier this year, ADX executed an energy investment agreement with MCF Energy to fund half of the Welchau-1 well costs up to a cap of EUR5.1 million (AU$8.9 million) to earn a 25 per cent economic interest in the Welchau Investment Area – which is part of ADX’s ADX-AT-II licence.
Additionally, the company also has a gas exploration well marked in the calendar at its ADX-AT-I licence. The drilling of the well is planned in early October in European giant MND’s investment area where that company will fund the first EUR4.5 million (AU$7.4 million) of well costs to earn a 50 per cent economic interest in the area.
It seems this primarily Austrian-based ADX has many irons in the fire, which has sometimes proved challenging for junior exploration companies … unless they have multiple revenues streams and increasing oil production to fund all of its activities. ADX seems well-positioned to carry out all its planned activities with plenty of cash to spare should one of its exploration wells turn towards production.
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