Timing is everything and ADX expects to bring its Anshof-3 oil well into long-term test production in mid-October after executing agreements for the lease of an early production system and oil offtake.

This early production – carried out under Austria’s legislation, which allows production of up to 37,000 barrels prior to finalising a production licence – will give the company additional cashflow and accelerate development of the oil discovery.

With the EU facing a full-blown energy crisis, ADX Energy’s (ASX:ADX) lease of the EPS will provide oil and gas separation, power generation, well site storage, offloading and telemetry control systems at the Anshof-3 location, allowing crude oil to be efficiently produced from the well with minimal operator intervention.

Meanwhile, the Oil Processing, Transportation and Sales (OSA) agreement provides the commercial framework for the processing, transportation, delivery of Anshof crude to RAG Exploration and Production for sale in conjunction with its own crude to the OMV refinery near Vienna.

Anshof crude will be sold at the benchmark Brent crude price, less a small quality differential while the processing, storage and transportation charge will be about US$11 per barrel.

The well is expected to produce at a sustained rate of 100 barrels per day during long-term production testing.

ADX expects the EPS to enable about 10 months of commercial production prior to the drilling of the Anshof-1 and Anshor-2 development wells, following which a permanent facility will be installed which will allow the maximisation of production from the three well cluster.

“The Board of ADX is very pleased with the finalisation of collaborative arrangements with RAG E&P to enable cost effective and efficient long-term test production from the Anshof-3 discovery,” executive chairman Ian Tchacos said.

“The fast tracking of cashflow and gathering of production data will enable ADX to accelerate the assessment and development of the Anshof oil discovery.

“Given the supply chain issues for oil and gas equipment, as well as the critical demand for energy in Europe, this is an excellent achievement by our local management team.”

Anshof-3 discovery

The Anshof-3 oil discovery in Upper Austria produced up to 132 barrels of water free light crude oil during testing.

Eocene oils produced in the area typically have a low gas oil ratio and hence require pumping from commencement of production

Oil rates in subsequent wells on the flank of the large 25km2 structure, where the Eocene reservoirs are expected to thicken, are likely to result in significantly higher production rates than from Anshof-3.

 

 

 

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.

Read MoreOil & Gas

Featured Companies

You might be interested in