ADX spuds new well to ramp up search for Austrian gas

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ADX spuds new well to ramp up search for Austrian gas

Drilling has kicked off at ADX Energy’s Lichtenberg-1 (LICHT-1) gas exploration well in Upper Austria, with ****** venture (JV) partner MND Austria stumping up the first €4.5 million (AU$7.3 million) in costs as part of its earn-in agreement.

The company has confirmed the well was spudded yesterday morning, central ********* time, and will target an Upper Oligocene sandstone reservoir and two other slightly shallower reservoirs that share similar geological features. MND previously paid ADX a €400,000 (AU$648,000) cash payment as part of its JV earn-in.

ADX is the project operator and will retain a 50 per cent economic interest in the well and the wider MND investment area following the completion of its partner’s earn-in obligations. The company also retains a 100 per cent interest in the remainder of its ADX-AT-1 licence.

Management says the drilling is expected to take about 30 days to reach a total measured (MD) depth of 2900m. It expects to intersect the first reservoir at about 2000m MD and the main target reservoir at 2500m MD.

If successful, it expects the detailed logging, casing and suspension of the well will take a further 10 days. Management says there is potential for significant gas production and net cash flow within a year from a discovery.

Success at LICHT-1 could lead to a rapid development of a new production and revenue stream for ADX and its partner MND. ADX believes there is a high chance of success at LICHT-1. Moreover, several near-by, follow up exploration prospects could lead to very significant reserves growth and long-term gas production.

Drilling of the well is being conducted by RED Drilling’s E-202 rig that successfully completed the company’s Anshof-2 oil appraisal well earlier this year.

The LICHT-1 prospect has been mapped with high-quality 3D seismic. Management believes there is strong evidence for the likely presence of marine sandstones of Oligocene age at the site.

The likelihood of high-quality reservoirs is based on data from older offset wells to the north with similar seismic amplitude or brightness anomalies, which have encountered highly-productive gas sands.

The company’s ADX-AT-1 licence area includes similar prospects such as GOLL, HERR and STOET, with the latter pair’s potential resources considered twice the size of LICHT-1.

With strong global demand for gas and ADX’s prospective ground in excellent proximity to infrastructure, the company will be hoping the spudding proves to be a precursor to budding success.

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