ADX Energy's Welchau-1 Well Testing Update - November 2024
ADX (ADX) Share Update November 2024 Tuesday 26th
ADX Energy Advances Testing at Welchau-1 Well
ADX Energy Ltd (ASX: ADX) has provided an update on the production testing activities at its Welchau-1 well located in Upper Austria. The company is moving forward with plans to test the Reifling formation after initial results from the Steinalm formation.
Instant Summary:
- ADX holds a 75% economic interest in the Welchau discovery.
- Initial Steinalm formation test shows dominant flow from lower interval.
- Reifling formation testing to commence by early December.
- MCF Energy Ltd funds 50% of Welchau-1 well costs for a 25% interest.
Steinalm Formation Test Results
ADX Energy has completed the first flow test of the Steinalm formation in the Welchau-1 well. The test was conducted over two perforation intervals, with the lower interval showing dominant fluid flow. The production logging tool (PLT) results indicated that most of the fluid came from the lower perforation interval, suggesting a fracture system accessing an oil/water contact lower in the structure.
The initial test was not considered diagnostic of hydrocarbons' presence or absence, and ADX may re-test the upper interval after isolating the lower one.
Upcoming Reifling Formation Testing
Following the Steinalm test, preparations are underway to test the Reifling formation. This involves perforating three intervals in the upper section of the 128-meter thick Reifling formation. The testing is expected to start by the end of the first week of December.
The results from the Reifling test will help determine the forward testing program and provide further insights into the potential of the Welchau discovery.
Economic Participation and Future Prospects
ADX holds a 75% economic interest in the Welchau Investment Area, with MCF Energy Ltd funding 50% of the well costs up to EUR 5.1 million to earn a 25% interest. This partnership highlights the strategic importance of the Welchau-1 well and its potential to unlock further oil and gas prospects in the region.
The ongoing testing at Welchau-1 is crucial for ADX Energy as it seeks to confirm the presence of commercially viable hydrocarbons. Successful results from the Reifling formation could positively impact ADX's stock by boosting investor confidence in the company's exploration capabilities.
Investor Reaction:
Analysts are cautiously optimistic about the upcoming Reifling test, noting that a positive outcome could enhance ADX's valuation. The partnership with MCF Energy Ltd is seen as a strategic move to mitigate financial risks associated with exploration.
Conclusion:
Investors should keep an eye on the results from the Reifling formation test, as they will be pivotal in determining the future potential of the Welchau-1 well. Continued updates from ADX Energy will provide further clarity on the project's progress and its implications for the company's growth strategy.