ADX has announced an independent verification of the prospectivity of its giant Welchau gas prospect in Upper Austria as it works to put all the pieces into place for drilling to start in September.

International energy consultants Gaffney Cline & Associates, commissioned by Welchau partner MCF Energy, assigned the prospect with best estimate (2U) prospective resources of 584 billion cubic feet of gas and 10.1 million barrels of condensate.

This compares favourably with ADX Energy’s (ASX:ADX) best technical prospective estimate of 651 Bcf of gas and 26MMbbl of condensate.

ADX recently submitted documents relating to environmental and nature protection requirements for the Welchau-1 well in the ADX-AT-II exploration licence following consultation with a number of environmental experts recognised by government authorities in order to ensure an efficient approval process.

It has also finalised the Welchau-1 drilling program for submission to regulatory authorities.

This takes account of recently obtained shallow borehole data and confirmed the well’s optimal drilling location on the Welchau anticline following further detailed structural modelling by industry experts which support and enhance the company’s geotechnical interpretation.

Welchau is already operationally drill ready in terms of geological and engineering work, as well as in the procurement of long lead materials and services such as casing, well heads and drilling services.

The company expects to spud the well in September with drilling expected to take between six and eight weeks to complete.

Executive chairman Ian Tchacos noted that while the well was slightly delayed by the need to engage an inhouse permitting team, complete an environmental impact assessment and undertake further technical studies to optimise the well program, ADX was now better placed to progress the permitting process, engage with stakeholders and be on track to commence drilling operations in the third quarter.

“Welchau is a very high impact well that has attracted substantial local interest,” he added.

“Our local management team has engaged with key decision makers and relevant government representatives where there is clear support for the development of natural gas which is recognised as an important transition fuel by the EU and critical for Austria’s energy security.”

“During the permitting process and subsequent drilling operations, ADX intends to continue to conduct open engagement with the local community based on factual information in relation to the project’s environmental impact, relevant safeguards deployed and the potential economic benefits if the well is successful.”

Big gas resource in the heart of Europe

The shallow Welchau prospect in Upper Austria is particularly exciting for ADX given its large resource potential, proximity to a historical gas discovery (Mollin-1), proximity to the national gas pipeline system, and location smack in the middle of gas-starved Europe.

And the potential has not gone unnoticed, drawing TSX Venture Exchange-listed MCF Energy to commit the right to farm-in to a 20% stake in the prospect by funding 50% of the Welchau-1 well cost.

Should the well be successful and flow at commercial rates, which is a distinct possibility given that the nearby Mollin-1 well in similar but deeper reservoirs  flowed 3.5 million standard cubic feet of gas and 40 barrels of condensate per day in 1989 when gas was of little value and there was no nearby pipeline infrastructure, today there is the infrastructure and the demand hence ADX will have little difficulty finding buyers for its hydrocarbons.

 

 

 

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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