ADX Energy will start spinning the drill bit in a week at its giant Welchau gas prospect in Austria, where it holds a best technical prospective, or P50, resource of 807 billion cubic feet (bcf).
Drilling is expected to take about 39 days and cost about €5.1 million (AU$8.4 million), of which joint venture (JV) partner MCF Energy will fork out half to earn a 25 per cent interest in the Welchau Investment Area.
ADX says the Welchau-1 well pad is now cleared and ready to receive the local Austrian-run RED Drilling & Services GmbH E202 rig, which is expected to arrive at the site next week ahead of spudding the well a week later. Management says the rig was chosen specifically for the task and has been pre-approved to drill based on the required safety, noise and environmental emission standards.
The company has a strong track record with the rig, which successfully drilled its first exploration well in Austria – Anshof-3 – in addition to the follow-up appraisal well, Anshof-2. Both wells went down without any lost time for safety incidents and within budget.
Achieving regulatory approvals at Welchau has exceeded the usual less than 6-month licensing process in Austria due to greater environmental sensitivities at the Welchau location as result of its proximity to an area of touristic interest and a small nature protection area. Despite these additional environmental and community considerations the licensing process in Austria has been far more predictable and timely than other jurisdictions such as many other parts of Europe, the U.K. and Australia where such approvals can take up to two years.
ADX Energy executive chairman Ian Tchacos.The prize at Welchau is gas housed within the naturally-fractured Steinalm carbonate reservoir that was drilled at a down-dip location by OMV with its Molln-1 well back in 1989 and flowed gas at 3.5 million standard cubic feet per day. Molln-1 hit a 400m column of gas, but downhole reservoir pressure measurements suggest it may be up to 900m.
The maximum Welchau structural closure at the top Steinalm carbonate level is about 100 square kilometres, corresponding to a high-case prospective resource estimate for the structure of 1.631 trillion cubic feet.
With a 75 per cent interest still in its grasp, ADX will remain as the operator of the Welchau Investment Area. Management says if the Welchau-1 well cost estimate is exceeded, it will pay 75 per cent of the ongoing costs and MCF will pick up the remaining 25 per cent.
The top of the reservoir is expected at just 1120m below the surface, meaning ADX news flow is likely to come thick and fast in the next month as the bit cuts away at overburden on its way to what the company hopes will be a game-changing discovery for the Austrian gas market.
Austria, a proudly politically-neutral country, has continued to import Russian gas at maximum capacity since the beginning of the Ukraine invasion, while most other European countries have reduced their dependence in efforts to cut funding to Russia.
