Signs are promising for ADX as Welchau-1 intersects 115m of liquids-rich gas shows in the target Steinalm Formation

ADX intersects 115m of liquids-rich gas shows in the target Steinalm Formation at Welchau-1
Welchau gas shows are in the same formation and show similar composition to gas from the nearby Moln-1 gas discovery
Company will proceed with running wireline logs, pressure management and inflow testing

Special Report: ADX Energy’s dream of making a transformational gas find in Upper Austria has received a major boost after the Welchau-1 exploration well intersected 115m of condensate rich gas shows in the primary target formation.

Welchau targets 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.

Half of the drill costs to a cap of €5.1 million are funded by ADX Energy’s (ASX:ADX) partner MCF Energy in return for a 25% interest in the Welchau Investment Area.

Drilling of the well previously intersected carbonate formations with evidence of fracturing, faulting and gentle folding as a result of deformation predicted at the crestal location of the Welchau anticline structure.

This is promising as fractures are essential for enhanced productivity in carbonate reservoirs.

Success case evaluation to proceed

Welchau-1 has intersected 115m of liquids (condensate) rich gas shows in the primary target Steinalm Formation from a measured depth of 1,452m.

This is in line with pre-drill prognosis, providing confidence in the company’s structural model for the Welchau field.

That the Steinalm Formation intersected in Welchau is the same zone that flowed condensate rich gas in Moln-1 just adds to the potential, particularly since compositional analysis of gas from Welchau-1 indicates very similar results as gas from Moln-1.

Additionally, drill data suggests that the Steinalm Formation is an extensively fractured carbonate, while the C1 (methane) to C5 (pentane) ratio plots indicate that a permeable reservoir is present.

ADX Energy (ASX:ADX) — Recovered core showing presence of a natural fracture system. Pic supplied (ADX)

Both of these findings are indicators the reservoir will be capable of producing gas should it be present in commercial quantities.

Welchau-1 also intersected 380m of effective seal in the Lunz Formation above the target Steinalm Formation, removing a key risk in drilling the well.

“The Welchau gas discovery has the potential to yield an exceptional gas resource for ADX, its partner MCF and the Republic of Austria,” executive chairman Ian Tchacos said.

“The results to date are in line with pre-drill expectations confirming the exceptional geological and technical work by our Vienna team supported by local and international experts.

“Over the coming week ADX plans to execute its success case evaluation program for the well which will include electric line logging, down hole sampling, inflow testing and pressure measurement required to confirm the reservoir characteristics and the hydrocarbon composition.

“We look forward to providing further results on this potential play-opening discovery as they become available.”

Forward plan

Drilling is continuing ahead with well penetration rates returning to the level anticipated in the original well plan though savings in drilling the 12 1/4 inch section will likely result in a success case well program in line with the predicted dry hole cost.

Once the well hits its total depth, ADX will run wireline logs as well as carry out down hole pressure measurement, inflow testing and formation fluid sampling across the zones of interest.

It will then case and suspend Welchau-1.

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.