The Anshof field in Upper Austria has been an oil producing winner for ADX, strong enough in fact to attract a major European Industry farm-in partner to fund and accelerate further development.
The Anshof-3 discovery well is currently producing oil at a rate of about 120 barrels per day, though the company has been chomping at the bit as this is constrained by the current use of a leased early production system.
However, the introduction of MND Austria as its farm-in partner means that ADX Energy (ASX:ADX) can now progress plans to drill two appraisal and development wells at the field, which are expected to lift production from 120 barrels per day up to between 750 to 1000 barrels per day with a big resulting increase in cashflow.
Under the farm-in agreement, MND will pay back costs of €1.335m (A$2.225m) to the company and fund €5.28m towards the cost of drilling, completing and tie-in of the Anshof-2 and Anshof-1 wells to earn a 30% interest in the field in the ADX-AT-II licence.
Should Anshof-2 meet agreed production performance criteria, MND will then pay the company a further €1.335 million and provide another €3.57m in development funding, taking the total investment up to €11.52m (A$19.20 million).
Anshof-2 is due to spud during the fourth quarter of this year and is expected to deliver about 300 barrels per day of additional oil once it is brought into production.
The deal only covers the Anshof oil field and does not include the remainder of ADX prospect rich portfolio such as the giant Welchau gas prospect, which could host 651 Bcf of gas and 26 million barrels of condensate.
Not just oil
However, MND – a subsidiary of highly credentialed European explorer, producer and oil services group MND a.s, which generated about €8.5bn of revenue in 2022 – is also looking to invest in gas exploration and has agreed to work with ADX to develop a gas exploration investment in the ADX-AT-I licence.
ADX AT-I hosts multiple gas prospects including the 40 billion cubic feet (Bcf) IRR prospect as well as the Schoe, Hoch and Gast shallow gas prospects that were recently matured through the use of a combination of AI software, an international team of stratigraphic trap experts and local knowledge.
Schoe, Hoch and Gast will be cheap to drill but have large stratigraphic upside potential beyond the currently assessed best technical prospective resources of 6.6Bcf , 4.8Bcf and 3.6Bcf respectively.
Additional follow up prospects in this innovative new play-type are also being generated.
Executive chairman Ian Tchacos said the company was delighted to have entered into an investment agreement with MND that will accelerate development of the Anshof field.
“The Anshof field has an independently assessed 2P reserves base of 5.2 million barrels of oil equivalent which can deliver significant cashflow with the drilling of further wells,” he added.
“MND brings a substantial funding package of up to EUR 11.52 million as well as extensive experience and operating capability across Europe.
“We are also very encouraged that MND intends to participate in exploration drilling opportunities within ADX’ exploration licences which is further industry recognition of the potential of our portfolio in Austria.”
Anshof development
Following the farm-in, the company will have a 50% interest in the Anshof field with fellow Australian Xstate Resources (ASX:XST) holding the remaining 20%.
Whilst there are plans to boost production from the producing Anshof-3 well, successful drilling of Anshof-2 and Anshof-1 will deliver a step-change in the field’s production and reserves.
ADX has flagged that all three wells could deliver combined oil production of between 750bpd to 1,000bpd with high productivity and reserves recovery per well.
The company also intends to install a permanent facility at Anshof which will process and offload substantially higher volumes than the current rental early production unit.
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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