ADX confirms second oil-producing well in Austria

ADX Energy says it has struck oil again in Upper Austria, this time at its Anshof-2A appraisal well after it intersected a vertical oil column of 6.5m – a width three-times thicker than its currently-producing Anshof-3 well at the same location.

Anshof-3 churns out some 110 barrels of oil per day (BOPD) at the company’s Anshof field permanent production facility (PPF). The high-quality Anshof-2A oil column boasts a 20 per cent higher porosity reservoir than Anshof-3 and is expected to significantly increase flow rates from the reservoir.

Following the well success, ADX has immediately moved to tying in the increased oil production to the recently-completed Anshof PPF, where it is anticipated the well will add a further 300 to 500 BOPD.

Drilled by RED Drilling & Services, the Anshof-2A well reached a total depth of 2195m in just 10 days. The well pierced the high-quality Eocene sandstone reservoirs – which offer not only higher porosity, but also more permeability than previous finds – from 1586.5m.

The company has a 60 per cent economic interest in the Anshof-2A well it shares in a joint venture (JV) with European industry giant MND Austria, which holds the remaining 40 per cent slice.

The well is expected to make a significant contribution to ADX’s oil production and cash flow within a few weeks when it is tied in to the recently installed and commissioned Anshof Permanent Production facility.

The Anshof-2A well is expected to produce considerably more oil than its predecessor, the Anshof-3 well. The potential daily output should reach multiples of the current production, pushing ADX closer to its outlined goal of producing more than 1000 BOPD at the PPF by the 2025-26 financial year.

The Eocene reservoirs at Anshof-2A are similar in thickness and quality to the reservoirs encountered in the down dip Anshof-2 well. The company says the thicker and more productive reservoirs are likely to be prevalent in the eastern part of the Anshof field, compared to the Anshof-3 discovery well to the west.

As such, the well marks the first of two additional production wells in the east. Both are designed to be connected at the Anshof PPF, with the second planned for early next year.

Management believes each well drilled could net it up to $20 million in profit at current oil prices. The company expects to be able to provide well operations updates on completion of testing, which is expected to kick off early next month.

Anshof-2A is just the first well in ADX’s two-well drilling program for this year. Following the latest success, the company now has its sights set on its Lichtenberg-1 gas exploration well, about 60km to the west in the ADX-AT-I licence. Drilling is scheduled to soon begin, with management hoping for continued success – this time in the gas market.

The Lichtenberg prospect is fully permitted and claims significant shallow resource potential, with the benefit of being onshore and proximal to existing Austrian gas infrastructure. The drilling of the exploration well will be conducted within MND’s investment area, where the oil major will fund the first €4.5 million (AU$7.4 million) worth of costs to earn a 50 per cent economic interest.

Once the Anshof-2A well is up and running, the rig will be demobilised to the large-scale Welchau-1 gas liquids discovery well in the heart of Europe for reservoir testing.

All that awaits market punters now is the all-important flow rate figures to come from the Anshof-2A well and what that will mean for the company in terms of BOPD at its Anshof field PPF. With the Lichtenberg-1 and Welchau-1 prospects soon to follow, ADX appears to be in for a busy finish to the year.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au