ADX doubles Austrian acreage and bolts on big leads

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Matt BirneySponsored
The Welchau prospect is up-dip from a 1989 well that encountered a gas column in excess of 400m when drilling for oil.
Camera IconThe Welchau prospect is up-dip from a 1989 well that encountered a gas column in excess of 400m when drilling for oil. Credit: File

ADX Energy is backing up its European energy business model after doubling down on its acreage position in Upper Austria by bolting on three major ‘drill-ready’ exploration targets it plans to chase amid European gas prices trading at four times that of the USA. It has now started a farmout process to attract drilling partners.

Austrian regulators have awarded ADX significant extensions to its AT-I and AT-II permit boundaries, increasing the acreage spread from 450 square kilometres to 1022 km2 of highly prospective ground. The added acreage comes after ADX revealed the 20 million barrel OHO prospect in November.

The headline target is the gas-prone Welchau prospect in AT-II on which ADX has put an estimated 750 billion cubic feet of gas, or “bcf” or 125 million barrels of oil equivalent, or “mmboe”.

Welchau is relatively shallow at 2000m and within tie-in distance to the national gas pipeline network in the foothills of the Austrian Alps. Notably, ADX said Welchau is analogous to the giant anticline structures discovered in Kurdistan and Iraq and it will provide further details in the near future in a dedicated release regarding Welchau.

Welchau is up-dip from the 1989 Molln-1 well which accidentally encountered a gas column in excess of 400m within Alpine thrust sheets when drilled by Austrian explorer OMV in its search for oil rather than gas. Interestingly, ADX CEO Paul Fink worked for OMV for many years.

The 100km2 prospect area extends over 23km and has a potential gas column height in the prognosed well in excess of 1000m with exceptional resource potential given the area is proved by the Molln-1 results to be gas charged, according to management.

Previous exploration efforts were focused on large, deep oil targets below the thrust sheets which led to the neglect of the gas potential of the area for many years.

Helping to drive the exploration of the prospects, the European natural gas market has seen a 3.5 fold price increase in 2021 with its average of US$30 per thousand cubic feet, or “mcf” offering a stark comparison to the US$8 per mcf a US producer is lucky to get on a good day.

Whilst not as large as Welchau, the added AT-I acreage brings with it conventional gas and geothermal opportunities in the Gmunden prospect. The fractured and often karstified Jurassic limestone reservoir is comparable to highly successful geothermal developments in the Munich region in neighbouring Germany. ADX said in the event of a two well development, the geothermal potential at Gmunden is capable of delivering 15 to 20 MW of long term continuous geothermal energy.

The extension to AT-I also contains the 15mmboe ZAM lead, thought to be a follow up target on trend with the 20mmboe OHO gas prospect.

The added acreage at AT-II, containing the Anshof discovery, holds the Piberbach oil field rejuvenation project that ADX said has been matured to the project execution stage.

On top of the Piberbach project, the new ground offers low risk exploration potential that, according to ADX, is proven by several nearby oil and gas discoveries with excellent reservoir quality and high flow rates from shallow drill depths of approximately 1000m. Management believes this opportunity will attract potential farmin partners who are seeking low risk development with follow up growth.

We have been able to add opportunities such as the World class Welchau gas prospect to the recent Anshof oilfield discovery within 18 months of securing our exploration licenses in Upper Austria.

Success at the Welchau gas prospect would help meet the large gas supply shortfall in Europe. In addition to Welchau, several other large prospects have been added to the portfolio on trend with the independently assessed OHO prospect.

ADX Energy CEO, Paul Fink.

At the other end of the spectrum the acreage extension includes an oilfield redevelopment project with excellent satellite follow up potential providing a low risk, rapid cash flow growth opportunity says Fink.

The company has kicked off a farmout process to bring in drilling partners for the opportunities that range from smaller, low risk leads to larger scale, higher risk targets such as the OHO prospect.

In addition to the oil and gas targets, ADX said there are very attractive geothermal opportunities in the portfolio which are attracting new investment interest.

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

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