ADX Energy has delivered the first tangible evidence that its Upper Austrian shallow gas strategy could deliver a new European energy source, with its HOCH-1 discovery well flowing gas at an encouraging rate of 2.8 million cubic feet per day, or 467 barrels of oil equivalent per day.

The result marks the first indication that HOCH-1 may be capable of commercial gas production. The clean, water-free flow was achieved from a perforated interval at 1465m depth on a small 16/64-inch choke, with a flowing wellhead pressure of 940 pounds per square inch that was still rising, suggesting strong reservoir deliverability.

Before drilling, the HOCH prospect carried a mean prospective resource estimate of 8 billion cubic feet of gas, with upside to 17.3Bcf. Notably, the deeper gas-bearing intervals encountered after ADX extended the well beyond its original target were not included in those pre-drill estimates, providing additional upside if testing proves successful.

The tested interval is a Basin Floor Fan reservoir that ADX had already interpreted as extending across a broad area. The encouraging flow result supports that model and, according to management, raises the prospect of a sizeable, connected gas accumulation. For a play built around clustering multiple shallow discoveries, that could prove an important early leg-up.

However, the key data is still to come. ADX will now install downhole pressure gauges and undertake a 14-hour stabilised flow test followed by a two-week pressure build-up period to estimate connected reservoir volume and reserves potential.

This is a positive result from the first zone perforated, delivering a clean-up flow of 2.8 million cubic feet per day, equivalent to 467 barrels of oil equivalent per day, on a small 16/64-inch choke.

The tested interval is the first of up to three firm gas zones scheduled for testing, with a possible fourth contingent zone also available. Testing is being undertaken in two phases, with the current campaign focused on selected Hall and Base Hall intervals before shifting to additional Base Hall channel reservoirs in a second phase.

HOCH-1 exceeded expectations during drilling by encountering up to eight potential gas-bearing reservoirs across the Hall and Base Hall formations. ADX has prioritised the most prospective intervals, with the first perforation targeting the 1465m Basin Floor Fan reservoir.

Additional firm test zones sit at 1498m and 1550m, while a fourth contingent zone lies near 1364m. Three further Base Hall reservoirs remain available for second-phase testing.

Hall Formation analogue fields across Upper Austria have collectively produced more than 233 billion cubic feet of gas, demonstrating the commercial punch these relatively thin reservoirs can pack.

The result also materially de-risks ADX’s broader shallow-gas strategy. HOCH-1 is the first of three shallow-gas prospects planned for drilling in Upper Austria this year, with the company holding a 50 per cent economic interest in the prospect. The well is regarded as a pathfinder for the permitted GOLD-1 and SCHOE-1 follow-up wells. Together, the three prospects form part of a broader Upper Austrian shallow-gas inventory exceeding 60 billion cubic feet of gas (Bcf).

Success at HOCH-1 would strengthen confidence that the wider play can support a scalable regional gas business and potentially open the door to a repeatable development model across the licence area.

The project also benefits from an infrastructure advantage. HOCH-1 sits just 2km from open-access gas pipeline infrastructure, potentially providing a rapid pathway to commercialisation if testing continues to deliver positive results.

Europe continues to prioritise energy security, increasing the value of discoveries that can be quickly tied into existing infrastructure.

For ADX, a successful shallow-gas development could provide a new cash-flow engine alongside production from its Anshof oil field. It could also help fund development of larger opportunities within the portfolio, including the Welchau gas-condensate project in Austria and the Nilde gas discovery in the Sicily Channel.

The market will likely now be watching for pressure-build-up data, results from the remaining Hall and Base Hall test zones and the company’s first indication of commercial reserves potential.

If pressure testing confirms a laterally extensive reservoir, HOCH-1 could quickly move from a geological success to the first building block in a scalable Upper Austrian gas business.

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