ADX Energy Ltd has received a permit to drill the Welchau-1 well on license ADX-AT-II in Upper Austria from the Ministry of Finance of the Republic of Austria, or Bundesministerium fur Finanzen (BMF).
The permit allows ADX to drill and test the Welchau-1 well and conduct long-term production test production if necessary, the company said in a news release Wednesday. The permit is linked to two specific types of rigs, including a drilling rig and a work platform provided by the drilling contractor RED Drilling & Services GmbH.
Under the terms of the permit, the Welchau-1 well can be drilled during the Austrian winter period between October 1 and March 31 during the term of the exploration license, ADX said. The final stage of the authorization process is the receipt of an environmental authorization which is based on the environmental report of an independent expert.
The company expects drilling operations to begin in the fourth quarter of 2023 after receiving an environmental permit. The successful case drilling program is expected to take approximately 39 days, ADX said.
The Welchau gas prospect has the best prospective technical resources of 807 billion cubic feet equivalent or 134 million barrels of oil equivalent (boe). ADX said the Welchau prospect targets the same reservoirs as the nearby Molln-1 well that tested pipeline-grade gas in 1989.
MCF Energy Ltd., under an energy investment agreement, has agreed to finance 50 percent of the cost of the Welchau-1 well to obtain a 20 percent economic interest in the Welchau investment area, with ADX retaining an 80 percent economic interest in Welchau. Investment area, according to the release.
“The ADX Board is very impressed and encouraged by the transparent and efficient permitting process carried out by the Austrian Mining Authority to evaluate extensive technical, legal and environmental documentation, as well as to openly address the interests of relevant stakeholders and community,” Ian, Executive Chairman of ADX. said Tchacos.
“The Welchau exploration project is an exceptional economic opportunity and domestic energy supply for the state of Austria. ADX and our partner MCF Energy Ltd are committed to responsible gas exploration. We look forward to the ongoing engagement with our stakeholders and the local community based on information made in relation to the environmental impact of the project, the relevant safeguards deployed, as well as the potential social and economic benefits if the well is successful,” added.
Investment deal for Anshof
Meanwhile, ADX’s wholly-owned subsidiary ADX VIE GmbH has signed an Energy Investment Agreement (EIA) for the Anshof field area in the ADX-AT-II license with MND Austria, as , under the terms of the EIA, MND has firm and contingent investment and payment obligations. up to $12.53 million (11.52 million euros) for a 30 percent economic interest in the Anshof field area in Austria, ADX said in an earlier press release.
The transaction is subject to approval by the BMF of the Anshof Partnership documentation between ADX, MND and existing partner Xstate Resources Limited. Upon completion of the transaction, ADX will remain the operator and retain a 50 percent economic interest in the Anshof field area, with MND and XST holding a 30 percent and 20 percent economic interest, respectively, according to the statement.
The Anshof partnership intends to drill the Anshof-2 appraisal and development well during the fourth quarter, at which time MND will pay ADX its first investment in the Anshof field area. Success at the Anshof-2 well will result in a substantial increase in the field’s oil rate, as well as an MND payout, ADX said.
The Anshof-1 development well is expected to be drilled in the first half of 2024. The combination of Anshof-1, Anshof-2 and Anshof-3 is expected to provide an aggregate oil rate of approximately 750 to 1000 barrels per day, ADX noted.
“The ADX Board is delighted to have signed an investment agreement with MND that will accelerate the development of the Anshof field,” said Tchacos.
“The Anshof field has an independently assessed 2P reserve base of 5.2 million boe that can provide significant cash flow with the drilling of more wells. MND is providing a significant financing package of up to 11 .52 million euros as well as extensive experience and operational capability across Europe.We are also very encouraged that MND intends to participate in exploration drilling opportunities within ADX’s exploration licences, which is further industry recognition of the potential of our portfolio in Austria,” he added.
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