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.