ADX Energy poised for production boost after Anshof-2A hits 6.5m high quality oil column

ADX Energy’s Anshof-2A appraisal well’s 6.5m oil column is about three times greater than at Anshof-3 with better porosity and permeability.

The Anshof-2A oil column is three times greater than the one at Anshof-3, which should translate into greater production from the new well in October. Pic via Getty Images.

• ADX Energy’s Anshof-2A sidetrack appraisal well intersects 6.5m oil column, three times more than at existing Anshof-3 well producing at 110 barrels per day

• High quality Eocene reservoir at the well also has better porosity and permeability, which could increase productivity

• Company will now complete Anshof-2A as an oil producer and move to drill the Lichtenberg-1 gas exploration well

Special Report: ADX Energy is likely to enjoy a significant boost to oil production at its Anshof field in Upper Austria after intersecting a 6.5m vertical oil column at its Anshof-2A sidetrack appraisal well.

This high quality Eocene reservoir was encountered updip from the water wet Anshof-2 well and slightly down dip from the Anshof-3 discovery well, which is now interpreted to be near the crest of the Anshof structure.

Importantly for ADX Energy (ASX:ADX), the 6.5m oil column at Anshof-2A is about three times greater than that encountered in the Anshof-3 discovery well, which currently produces about 110 barrels per day (bpd) of oil.

To top it off, the reservoir at Anshof-2A has 20% higher porosity and greater permeability – both important factors in determining the productivity of a reservoir, which means that it wouldn’t be a stretch to believe the well could produce at least twice if not three times as much oil as the discovery well.

A fantastic result indeed.

The company is currently casing and cementing Anshof-2A for suspension as a production well, which will include the installation of production tubing and a rod pump in early October.

It will then be tied-in to the Anshof permanent production facility.

“We are very pleased to announce a second Anshof oil field producer. The well is expected to make a significant contribution to ADX’ oil production and cashflow within a few weeks when it is tied in to the recently installed and commissioned Anshof permanent production facility,” executive chairman Ian Tchacos said.

“The ANS-2A well is the first of a two well drilling program. It will be followed by the Lichtenberg-1 gas exploration well and the testing of Welchau-1 liquids rich gas discovery.”

Rig drilling the Anshof-2A well. Pic: ADX Energy

Anshof oil field

The Anshof field in the ADX-AT-II licence is just one of several potential oil closures mapped by ADX in the immediate area.

Oil was initially produced from Anshof-3 at a constrained rate through a temporary production facility before this was shut-in after reaching the regulatory limit of 36,000bbl of long term test production over a 10 month period.

A permanent production facility with capacity to produce 3,000 bpd of liquids per day was subsequently installed, allowing the company to bring Anshof-3 back into production.

It now looks likely that Anshof-2A will go a long way towards ensuring that this capacity is filled, which would also boost the company’s revenue and cash flow generation.

Completion operations will be undertaken using a smaller and cheaper workover rig which is currently operating in the company’s Vienna Basin fields.

Following tie-in, the Anshof-2A well will be tested to determine a long-term optimal rate and commercial production will commence in conjunction with the existing Anshof-3 well.

The workover rig will then be moved to the Welchau-1 gas liquids discovery well to start planned well work in preparation for testing operations.

Further operations

ADX will move the RED Drilling & Services E-202 rig to drill the Lichtenberg-1 (LICHT-1) gas exploration well in the ADX-AT-I licence.

This well will test a reservoir with best estimate prospective resources of 21.1 billion cubic feet of gas that was identified from updated mapping from 3D reprocessing and a review of reservoir distribution.

Cost of drilling the well, estimated at $8.5m on a dry hole basis, is largely covered by partner MND Austria’s commitment to fund €4.5 million ($7.4m) to earn 50% of the MND Investment area within the ADX-AT-I licence.

This article was developed in collaboration with ADX Energy, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as ADX Energy poised for production boost after Anshof-2A hits 6.5m high quality oil column