Score one for ADX as Welchau-1 is declared a discovery. Pic via Getty Images
Energy
Special Report: ADX Energy has declared its Welchau-1 exploration well as a discovery after logging tools revealed a high correlation between hydrocarbon shows and open fracture networks essential for well productivity over a large gross interval.
Further evidence that ADX Energy (ASX:ADX) might just have found what it was looking for came from the observation of liquid hydrocarbons and gas inflow at surface – a clear sign that mobile hydrocarbons are present.
ADX is now moving to case and suspend the well, though testing to determine if the discovery has the potential to achieve its pre drill potential will have to wait until later this year due to environmental permit commitments limiting drilling and testing to a strict period between October 1 and March 31.
Welchau-1 was drilled to test a best technical prospective resource of 807 billion cubic feet equivalent (Bcfe) of gas within relatively shallow reservoirs updip of the nearby Moln-1 gas discovery that flowed 4 million cubic feet of pipeline quality gas per day during testing.
The well intersected liquids (condensate) rich gas shows in the primary target Steinalm Formation from a measured depth of 1,452m, in line with pre-drill prognosis and adding confidence to the company’s structural model for the Welchau field.
Drilling risk was also mitigated by partner MCF Energy, which is funding half of the drill costs to a cap of €5.1 million ($8.46 million) in return for a 25% interest in the Welchau Investment Area.
Logging carried out over Welchau-1 have now confirmed open fracture networks and vuggy porosity essential for well productivity coincident with hydrocarbon shows over a gross interval of 356m from a measured depth of 1,346m across three interpreted lithological sequences.
The Modular Formation Dynamic Tester (MDT) tool returned signs of medium to very high permeability, which is in agreement with fracture density and petrophysical log interpretation.
A well inflow with mud gas readings for C1 (methane – natural gas) of up to 20% were recorded from the well bore with heavier components up to C5 (liquid hydrocarbons) recorded confirmed mobile hydrocarbons.
However, MDT sampling of the reservoir fluids was unable to sample reservoir fluids from the zones of interest primarily due to the extensive mud losses into the open fractures of the well, as well as tool sticking impacting the recoverability of representative samples from the zones of interest.
Following the observation of gas seen at surface, liquid hydrocarbons were also observed in the mud at surface exhibiting florescence.
“The logging results have confirmed the presence of well-developed open fracture networks and vuggy porosity coincident with hydrocarbon shows,” ADX executive chairman Ian Tchacos said.
“These fracture networks and vugs are key to well productivity in carbonate reservoir systems.
“Encountering potential productive zones over a gross interval of 356m is very compelling.
“While it is frustrating that the attempted fluid sampling was hampered due to operational difficulties which are relatively common in fractured carbonate reservoirs, the well inflow of hydrocarbons further confirms the existence of mobile gaseous and liquid hydrocarbons that can only be properly evaluated with a cased hole testing program.
“We will now run casing to protect the reservoir encountered in the well and look forward to coming back to test the well in accordance with previous environmental permit commitments to limit drilling and well testing during the period 1 October to 31 March.
“Environmental permitting for future operations will commence immediately. In between time, there is much analysis work to do on the data recovered to date from drilling, coring and logging to commence the evaluation of the resource potential at Welchau.
“The intervening period gives us the time to plan a testing program with a smaller, lower-cost workover rig that is appropriate for running testing equipment in cased hole at Welchau, as well assessing the undrilled deeper potential that may be accessed from this well.”
ADX is now conditioning the well before running and cementing the 7-inch casing down to the total well depth for well suspension.
Tchacos says more detailed mapping will be undertaken on follow-up structures already recognised within the company’s acreage.
This article was developed in collaboration with ADX Energy, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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