ADX is pushing its European oil and gas agenda with big moves ahead
ADX Energy has plans to boost existing oil production and explore low-risk, low-cost gas targets
Gas play benefits from existing infrastructure and is expected to significant productivity
Plans also in the works to resume Welchau testing and explore the Sicily Channel gas project
Europe remains hungry for energy and with demand likely to climb further as data centres become more common, finding new sources of fuel – particularly gas – to supply generation is extremely important.
Couple that with the desire to achieve as much energy security as possible and it is clear why companies such as ADX Energy (ASX:ADX) are focusing their efforts on finding and developing new sources of gas – and to a lesser extent oil – in Europe.
The company has flagged several strategic priorities that will enable it to meet this objective.
This include maximising its oil production at the Vienna Basin and Anshof oilfields in Austria, carrying out low-risk, low-cost gas exploration in Upper Austria, and finally pursuing high impact growth at its Welchau and Sicily Channel projects.
Initial steps
Speaking to Stockhead, executive chairman Ian Tchacos said the company had continued to do workovers at its Vienna Basin wells.
'We're also analysing a couple of well bores there that are probably not being optimally utilised and the possibility of drilling sidetrack wells and maybe an infill well.
'There's a possibility of getting our production rate up from around 200 barrels a day maybe to over 300 barrels.'
He also flagged the potential of working with its neighbour OMV – a major Austrian petrochemical company – as some of their assets are not fully developed.
Tchacos adds that while its Vienna Basin assets probably have another seven years of life left, they have virtually no royalty attached to them, meaning that anything that increases production will enhance profitability.
ADX will also seek to drill at least one Anshof appraisal well with Tchacos saying that some targets could be reached with deviated wells from the existing facility while others could be vertical wells that will be tied back.
Concurrently, the company will seek to commence drilling of its extensive gas portfolio to increase its exposure to Europe's well-priced gas market.
'We have been able to generate a prospect inventory of shallow gas prospects that have got a very high probability of success because they've already been successful nearby in the basin,' Tchacos said.
'We've been able to basically understand how the gas is distributed across the basin using a combination of AI and improved seismic processing and identified about 10-12 prospects.'
He added the gas play is close to existing infrastructure and features targets that are shallow and cheap to drill, making them potentially highly profitable.
'Historically, these things were drilled 10-15 years ago looking for deeper oil because they didn't have the 3D seismic that has now been enhanced and processed to the state that it is nowadays.
'More recently, there were a couple of these that were actually outside our acreage that we were trying to get access to drill were drilled by their operator RAG and they came in as we expected.'
Having worked on these targets for almost two years, ADX varied its exploration licence to take in more of the targets with plans to kick off operations by drilling up to three wells.
'We will try to drill them as a cluster so we can install a facility and a pipeline but the good thing is that they're also very close to open access infrastructure so that's going to be that's important just in terms of being able to get these things under production,' Tchacos said.
'They're pretty much 100% methane so they don't require a lot of processing and they're typically pretty good productivity with the sands expected to produce 5-10 million standard cubic feet of gas per day.'
High impact growth
ADX is also hoping to continue testing at Welchau-1 in the near-term with Tchacos saying that a judgement relating to a challenge to existing environmental clearances is expected soon.
He also flagged that quite a bit of work had gone into studying Welchau Deep, which is essentially a new play, as well as other follow-up structures.
Obviously we've been doing quite a bit of work on it and it is essentially a new play and there's a lot of follow-up potential within Welchau as well as follow-up structures.
The final piece of the puzzle is the company's Sicily Channel exploration licence.
'We were informed by the ministry that we were offered the permit but there's a formal process for the award that we expect will conclude by the middle of May,' Tchacos said.
'We like that acreage a lot and we have identified a number of prospects.
'Again, what's interesting about this is the area was heavily explored for oil, there was an oil discovery in the area and the oil is deeper.
'There's very good quality 2D seismic across this because of ENI and Shell actually held this acreage through around 2014.'
'On that dataset we can see some nice prospects but also what we've been able to see from going through old well reports is that there was also gas across a lot of these intervals while they were drilling the wells.'
He added that while these gas intervals were not tested, they gave the company plenty of confidence that the amplitudes seen on seismic were likely to be gas.
'This acreage has been further enhanced by the new Cassiopea field within 100km of us that's being developed by a consortium of ENI and Energean.
'Those fields are in a very similar geological setting to where we're at. There's not a big reserve. It's probably around 300 or 400Bcf (billion cubic feet). We see at least that sort of potential in our block, so it would also make it sort of a very nice sort of tie-in opportunity.'
Road ahead
ADX is looking to mature the first three or four of its shallow gas locations by the end of May and start permitting in order to enable drilled by the end of 2025.
'The gas in terms of production rate and cash flow can be very exciting and very lucrative,' Tchacos added.
'We've got a bit of interest from potential farminees to come in and drill some of these things with us.
'The nice thing about that is because they're relatively shallow and quick to drill – the sort of things that we can start with drilling two or three wells and then go on to drilling further wells because we've identified quite a few of these things.
'If we can put it together in two or three drilling campaigns then we can also lower costs.'
He added that the oil appraisal at Anshof could follow a similar timeline.
In regards to the Sicily Channel project, he said that once the block is formally awarded, the company will buy more available seismic and then come up with an independent resource assessment as its ultimate goal would be to secure a partner and drill a well by the end of 2026.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
West Australian
an hour ago
- West Australian
US government throws more weight behind Dateline rare earths
Dateline Resources has scored another major political win in its bid to develop the Colosseum rare earths project in California after United States Secretary of the Interior Doug Burgum publicly backed the mine's revival in a national television appearance. Appearing on Fox News over the weekend, Burgum, who is also chairman of the powerful National Economic Development Council (NEDC), declared the restart of the Colosseum project as 'pivotal' in securing America's critical mineral future. The Secretary underscored the importance of reducing US reliance on overseas rare earth supply chains and spotlighted the Trump administration's mission to ramp up domestic mineral production. Shortly after, Dateline's management met with Burgum in Washington DC, where federal support for the Colosseum project has been put on the fast track. The Secretary has directed the NEDC's top brass to coordinate efforts across US government agencies to expedite the project's development, effectively giving Dateline the green light for federal-level collaboration. Dateline's fully owned Colosseum project sits in California's Walker Lane Trend and already has a juicy gold resource of 27.1 million tonnes at 1.26 grams per tonne for 1.1 million ounces of gold. Last month, the company upped the gold price assumption on its gold project scoping study to US$2900 (A$4461) per ounce to deliver a whopping net present value of US$550M (A$846M) and a healthy payback of just 19 months. The project's potential for a rare earths discovery has lit up the government's radar, given its striking geological similarities to the US's only active rare earths mine - the nearby fabled Mountain Pass mine. Dateline is wasting no time capitalising on its moment in the sun and already has plans underway to start drill testing Colosseum's rare earths potential. The company pointed to the strong federal support as a massive boost to accelerate the project's permitting, environmental studies and project approvals, potentially shaving years off its development timelines. Dateline's strategic position, 10 kilometres from the Mountain Pass mine, also puts it in a prime spot to plug into existing infrastructure and logistics. This would be a huge advantage in the rare earths game, where processing options often cause a major bottleneck. With Washington on side and drilling on the horizon, Dateline could soon find itself sitting atop a dual-purpose gold and rare earths powerhouse – one with the full weight of the US government behind it. Is your ASX-listed company doing something interesting? Contact:
Perth Now
2 hours ago
- Perth Now
Aussie shares target record close as bank stocks rally
The Australian share market is on track for its best close, as US-China trade talks continue and the nation's corporate watchdog fast-tracks local stock listings. The S&P/ASX200 jumped 65.1 points, or 0.74 per cent, to 8,578.8, as the broader All Ordinaries rose 62.6 points, or 0.72 per cent, to 8,804.5. By midday, the top-200 was ahead of its February 14 record close of 8,555.8, but 64 points short of its 8615.2 intraday high, also set on Valentine's Day. The uptick followed two positive Wall Street sessions after local markets paused for the long weekend, and as officials from the US and China work to reach common ground on trade, particularly on rare earths and technology export restrictions. A two-year trial by the Australian Securities and Investments Commission to speed up the local listing process also had traders talking about a potential boom in initial public offerings, Moomoo market strategist Jessica Amir said. "A flood of IPOs would not only encourage foreign investment on the ASX, but also get Aussies more involved in their wealth creation," she said. Under the trial, ASIC will shorten the timeline for companies to list on the ASX, reducing deal execution risk and shortening the window of market volatility ahead of the public offering. "Our initial public offerings are the lowest they have been in over a decade, and companies are de-listing," ASIC chair Arthur Longo said. 'While we do not see regulatory settings as the silver bullet, we have received lots of ideas and are considering further regulatory adjustments to support a strong and well-functioning market." Nine of 11 local sectors were trading higher by lunchtime, as banks (+1.2 per cent) and consumer discretionary stocks (+1.3 per cent) led the bourse higher. All big four banks were trading at least one per cent higher, and the Commonwealth Bank was again within one per cent of its $182 record share price reached last week. Buy now, pay later player Zip Co was among the top-200's best performers, up almost six per cent to $2.32. Energy stocks led the gains in early trade and were up 1.1 per cent by midday, as positive signs from US-China trade talks helped oil prices to seven-week highs. Brent crude futures are trading at $US66.83 a barrel as a potential deal could boost the outlook for global growth and crude demand. The talks also helped lift large cap miners BHP and Fortescue by more than one per cent each, helping to push the materials sector 0.3 per cent higher. Gold miners were a sea of red, as risk-on sentiment pushed investors away from the safe haven in search of growth, with gold futures slipping to $US3,372 ($A5,105) an ounce. Uranium, lithium and other critical minerals plays were also higher. A lift in consumer discretionary stocks came with rallies for gambling machine plays Aristocrat Leisure (+2.7 per cent) and Light & Wonder (+4.0 per cent), along with a two per cent lift in JB Hi-Fi. IT stocks jumped 0.8 per cent, with help from data centre play NextDC, which surged 5.4 per cent to after announcing yet another improved contract utilisation update. The Australian dollar is buying 65.12 US cents, up from 64.41 US cents on Friday at 5pm.
AU Financial Review
2 hours ago
- AU Financial Review
Eight reasons this super giant likes private markets
ASIC's public and private markets review is already making waves. Mid-review, the regulator's tinkering with initial public offering rules to make it easier for privately owned businesses to transition to the ASX shows it is serious about bolstering public markets. That's understandable. Strong public markets have been great for Australia. Public markets are where Commonwealth Bank of Australia got its $300 billion valuation, where governments and banks raise capital, where our biggest corporate taxpayers live and where the bulk of the country's $4.2 trillion is invested.
