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ADX nears drilling after Austrian well site construction

ADX Energy could have a trilogy of wells in its crosshairs after receiving final environmental approval and commencing site works for the drilling of its Anshof prospect in Upper Austria. ADX says that if drilling of the first well at its Anshof-3 site proves successful, the area’s combination of proven, highly productive reservoirs and proximity to an oil and gas pipeline used to process and export crude oil could result in the very real prospect of near-term cash flow.

Interestingly, the Anshof-3 well’s surface position lies just outside an area that mandates approval by the Forestry Authority, elevating the wells drilling to the top of the company’s punch list. The company plans to drill the two subsequent Anshof wells following the receival of the aforementioned approvals. ADX anticipates having the approvals under its belt by early next month.

Previous work by independent advisory firm RISC, suggests Anshof has a mean un-risked prospective resource of 6.6 million barrels of oil equivalent and it suggests a 43 per cent chance of success. Given these figures and the potential bounty at stake, ADX says the decision to spud further wells in the area is an easy one. The site could also facilitate rapid field development opportunities.

The company’s Austrian oil venture has not only been backed by RISC, but also by Xstate Resources, a Perth-based oil and gas developer. The company recently agreed to stump up 40 per cent of ADX’s Anshof well costs up to €1.8m, in order to secure 20 per cent of the broader prospect area.

Noteably, the support didn’t end there with Xstate including in the deal an option to fund an additional 40 per cent of the cost of a second well on either the Anshof prospect area or the larger Anshof Farmin area. Under the terms of the agreement the funding a second well would see Xstate take a 20 per cent interest in the much larger Anshof Farmin area.

The work in Upper Austria bookends a frantic year for the ADX that only recently announced it had swelled its hydrocarbon reserves in Austria by more than 50 per cent. ADX’s net present value for its 1P and 2P reserves is now worth $8.7m and $24.4m, respectively.

Outside of its conventional energy interests, ADX is also looking to carve itself out a slice of the lucrative green energy pie, recently signing a Memorandum of Understanding with Windkraft Simonsfield to produce and store green hydrogen, among several other ventures.

With the company gearing up to sink its first of a potential 3 wells at its soon-to-be completed site in Upper Austria, ADX could be setting itself up for a busy end of year, particularly if it can pierce one of the areas highly productive reservoirs and utilise the oil and gas pipeline on its doorstep.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au

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