ADX Energy has launched an ambitious eight-week well work program in Austria, targeting a handy production boost of 100 barrels of oil equivalent per day (BOEPD) from its existing fields, whilst simultaneously working to unlock its recent HOCH-1 gas discovery with a second phase of testing.
The move comes against a backdrop of tight European energy markets, with the continent entering winter with gas storage levels well below the five-year average. Analysts have warned that significant LNG imports will be needed to offset supply disruptions, creating a period of elevated prices and volatility.
ADX’s focus on bringing more local gas and oil online could prove to be a timely move. The company noted the current European gas price of EUR€86 per megawatt-hour is equivalent to a striking oil price of US$170 per barrel against the current price of US$98.
The program will use the MB Well Services workover rig to conduct a series of production enhancement activities across ADX’s wholly owned Vienna Basin fields, in addition to testing the promising HOCH-1 well in its Upper Austria exploration licence.
The company says it is aiming to squeeze more production from three of its Vienna Basin wells by tapping into fresh new gas zones, a move expected to deliver between 50 and 60 BOEPD of incremental gas alone. A pump replacement in one oil and gas well is slated to add another 15 BOEPD, while the perforation of a new oil zone in another well is expected to deliver between 30 and 40 BOEPD.
However, the main event will be the eagerly awaited phase two testing of the HOCH-1 gas discovery, scheduled to begin in early December.
Drilled in May, HOCH-1 was a significant breakthrough for ADX, encountering up to eight biogenic gas reservoirs. Phase one testing of four of those zones delivered a co-mingled flow rate of 3.15 million cubic feet per day, equivalent to a solid 548 BOEPD.
The upcoming second phase is slated to test the slightly deeper Hall Channel zones, which were not tested in the initial program, requiring the drilling out of phase one’s cement plug and re-running a new production completion before perforating the target zones.
The company says the prize could be a substantial one. Post-drill 3D seismic mapping has correlated these deeper Hall Channel sands with nearby gas discoveries and production wells. The interpretation suggests the potential for a large stratigraphic trap extending at least 2.5 kilometres to the south-east. If the upcoming tests confirm the productivity of these deeper zones, it could materially expand the resource potential of the HOCH discovery.
ADX holds a 50 per cent economic interest in HOCH and is the operator.
With European gas prices elevated and new local supply proving invaluable, the mature operating region brings another big tick, as treatment facilities, pipelines, roads and service contractors lie at its doorstep.
Beyond its near-term Austrian production base, ADX has bigger exploration prizes in its sights, led by the deeper Welchau carbonate play in Upper Austria and offshore gas opportunities in Italy.
With a workover rig on site and a clear eight-week activity schedule, ADX is moving to capitalise on its recent exploration success and the compelling economics of the European energy market. While the Vienna Basin workovers provide a direct line to near-term production increases, all eyes will be on the results from the HOCH-1 well to see if the company can confirm a hefty new gas resource.
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