ADX to resume flow testing at promising Austrian gas discovery

ADX Energy is set to resume testing at its HOCH-1 shallow gas discovery in Upper Austria after initial flow rates returned up to 2.7 million cubic feet per day (MMCFPD), equivalent to a healthy 450 barrels of oil equivalent per day (boepd).

The promising early signs at HOCH-1 show tangible evidence that the company’s Upper Austrian shallow gas strategy could deliver Europe’s next new energy source, with results so far only measured from the very first of up to eight potential gas zones.

ADX says following a two-week pressure build-up analysis, the zone for testing has shown excellent reservoir productivity with the potential to flow at an even higher 3.5MMCFPD, or 580boepd, as it gears up to resume testing on the remaining deeper gas zones later this month.

The HOCH-1 well is just the first of three shallow gas prospects ADX plans to drill in its Upper Austria licence, where it operates a 50 per cent economic interest in the prospect. With its saddlebags full from a recent $3.58 million placement, the company’s well-stocked coffers give it plenty of runway to deliver the planned work.

The initial 11-hour test on the first zone within its Hall formation reportedly produced water-free gas and confirmed a sand body extent of at least 600 metres from the wellbore.

The HOCH-1 well testing results to date are encouraging. The first basin floor fan sand interval of the Hall formation tested has shown excellent productivity characteristics and lateral continuity. The yet to be tested Hall Channel sand system are very prospective and productive in the area. The relatively thin deep marine Hall Channel sands have yielded several relatively large gas discoveries ranging between 25 to 40 BCF. A single well to the East of HOCH-1 has recovered 10 BCF from several channel sands.

ADX’s eight potential gas reservoirs spread across two distinct geological formations, from the more evenly distributed Hall basin floor reservoirs and the deeper, elongated Hall Channel reservoirs.

The company says its two-phase testing program will now kick back into gear in the third week of August, with the remainder of phase one set to perforate the Hall sands and a Hall Channel sand together in a comingled test. Following that ADX says a phase two program will drill out a cement plug and access at least two deeper Hall Channel sand zones for testing.

Importantly, the real prize could lie in those yet-to-be-tested Hall Channel sands. ADX says post-drill mapping, using recently reprocessed 3D seismic data, has allowed it to correlate the sands intersected in HOCH-1 with historic wells located between 2.5km and 3km away.

Management believes this indicates the potential for a large lateral extension of several sand bodies, which could form the payload stratigraphic traps for perfect for gas.

While the HOCH-1 gas discovery is a promising development, it fits into a broader Austrian portfolio that is already delivering for ADX. The company’s Vienna Basin operations remain a key cash cow, with oil production recently receiving a boost from optimisation programs at its Anshof oil field, some 200km to the southwest. Notably, the infrastructure at Anshof is designed to handle up to 3000 barrels per day, giving ADX plenty of headroom to fast-track any significant new production volumes to market, as oil once again hovers near a wallet-busting US$90 a barrel.

With gas already flowing at HOCH-1 and up to seven more zones in the wings, ADX may only be scratching the surface in Upper Austria. If the deeper Hall Channel sands also fire, this European gas story could heat up quickly.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au