ADX Energy has completed the Welchau Gas Prospect farm-in with Kepis & Pobe Financial Group (KPFG) who have satisfied completion conditions including the payment of initial farm-in funds.

KPFG will fund 50% of the Pre-drill Well Costs of €197,000 ($305,000) for the Welchau-1 well – along with an option fee of €100,000 ($155,000) to fund the drilling of the Welchau gas prospect in ADX- AT-II exploration licence in Upper Austria.

Under the companies Joint Development Agreement (JDA), KPFG will also fund 50% of the Welchau-1 well drilling expenditure (budgeted at up to €3,810,000 ($5,910,000) to earn a 20% equity interest in the Welchau farm-in area.

By the payment of the Option Fee, KPFG may elect to fund a further 50% of the Welchau-1 well drilling cost to earn a further 20% equity interest in the Welchau farm-in area on or before 21 January 2023 – at which point they’ll hold 40% equity interest and ADX Energy (ASX:ADX) will retain a 60% interest in the Welchau farm-in area.

Land access secure in O&G friendly Austria

In addition, ADX has also signed a land access agreement for the Welchau-1 drill site with the Austrian Forestry Ministry.

It’s kind of a big deal, because securing access to the Welchau-1 well site, in combination with the procurement of long lead items required for the drilling of the well, provides the company with the certainty to progress the process of finalising regulatory approvals and the commitment to a drilling rig slot for the large Welchau gas prospect.

“At a time when certainty of access for exploration and development operations is becoming increasingly uncertain in many jurisdictions, ADX is very fortunate to be operating in oil and gas friendly Austria,” executive chairman Ian Tchacos says.

Drilling planned for H1 2023

Notably, the Welchau prospect has the potential to contain an 807 Billion Cubic Feet (BCFE) equivalent (approx. 134 MMBOE).

The prospect is also located up-dip from a gas discovery (Molln-1 well) drilled in 1989 which intersected at least a 400m gas column, with 900m interpreted from pressure data and tested condensate rich, pipeline quality gas (40 barrels per mmcf and maximum flow rate of 3.5 mmcfpd).

ADX is seeking to obtain the necessary regulatory approvals and access to a drilling rig slot to enable drilling the Welchau-1 well during the first half of 2023.

 

 

 

 

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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