ADX Energy is now racing to drill the Welchau-1 gas exploration well in January 2024. Pic: via Getty Images.
Energy
Special Report: ADX has cleared the last regulatory hurdle in the way of drilling the potentially transformational Welchau-1 gas well in Upper Austria after receiving environmental clearance.
Welchau has a best technical prospective resource of 807 billion cubic feet equivalent (Bcfe) of gas equivalent in relatively shallow reservoirs updip from the nearby Moln-1 gas discovery, that intersected a gas column of at least 400m in 1989 and flowed 3.5 million cubic feet of gas per day during testing.
For context, a single Bcf of gas can power 24,315 average homes for a year.
Couple this substantial resource with the project’s being right smack in the middle of energy-hungry Europe with access to established pipelines and it is easy to see why a success could be transformative for ADX Energy (ASX:ADX).
Drilling has also been de-risked by the company’s agreement with MCF Energy, which is funding 50% of its costs for a 20% interest in the field. While a drilling permit from the Austrian government has already been granted the Environmental Clearance was required to commence drilling operations.
The receipt of the environmental clearance from the Department of Nature Protection of the State Government of Upper Austria follows an extensive effort by the company to ensure that it minimise the impact of drilling on the area, which has tourism value and is close to a small nature protection area.
ADX said that while the drill location is on agricultural land, the Department took extra care to balance all stakeholder interests including the outspoken opposition from a small group of environmentalists who took special interest in a nearby nature protection area.
It added that the local community has shown no opposition to the project and a large number of prominent community members have provided strong public support for the drilling of Welchau.
The company will begin drill site construction as soon as possible with the goal of spudding Welchau-1 during January 2024.
Drilling will be carried out by the RED Drilling & Services GmbH (RED) E202 drilling rig which has been pre-approved based on the required safety, noise and environmental emission standards.
The same rig is currently drilling ADX’s Anshof-2 appraisal well on the Anshof Oil Field.
ADX is planning two drill four wells in the next 12 months (two development wells on Anshof including Anshof-2) and two gas exploration wells (the first being Welchau)
“The board of ADX is delighted that the last hurdle for the commencement of operation to drill the exceptional Welchau gas Prospect has been achieved,” executive chairman Ian Tchacos said.
“While some delays have been experienced in receiving the Environmental Clearance, we continue to be impressed by the highly efficient and transparent regulatory environment for energy projects in Austria compared to many other jurisdictions.
“Despite opposition from activists, high media interest and the need for additional experts reports, decisions have been made in a relatively fast, predictable timeframe in accordance with a clear and enforceable legal framework.
“This Environmental Clearance is based on a balance between environmental, community, economic and energy security interests.
“The drilling of Welchau comes at a time when Russian gas still supplies over 50% of Austria’s gas requirements but is now officially threatened to be cut off in 2024.”
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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