ADX Energy Ltd (ASX:ADX) provides update on Welchau-1 discovery well

ADX Energy Ltd (ASX:ADX) has provided an update on the resources potential and the planned well testing program for the Welchau-1 discovery in the ADX-AT- II exploration licence in Upper Austria. ADX is the operator and holds a 75% economic interest in the Welchau Exploration Area. The Welchau-1 well targeted the reservoirs encountered in the nearby, downdip Molln-1 discovery well that tested condensate rich gas in 1989. The well was suspended on the 28th of March 2024 for future well testing after running and cementing 7-inch casing down to the well total depth at 1733 metres measured depth. Operations were suspended to comply with the conditions of environmental permits limiting drilling and testing operations to the Austrian winter months from 1 October 2023 to 31 March 2024.

Executive Commentary on Welchau-1 Discovery Well Update

Based on the data analysis to date, ADX believes it is most likely that Welchau is a high API hydrocarbon liquid (or light oil) and associated gas discovery rather than a liquids-rich gas discovery as was predicted prior to drilling. ADX does not believe it is appropriate to provide a definitive resources range at this stage due to the uncertain nature of the Welchau reservoir performance prior to testing. However, ADX provides the following unrisked Prospective Resources range at 26 September 2024 as guidance to shareholders of the oil and associated gas potential of reservoirs intersected in the Welchau-1 well. The range of Prospective Resources estimated using probabilistic methodology is very large from a low case of 12 MMBOE to a high case of 217 MMBOE. ADX intends to revise Welchau resource estimates following the planned testing program, subsequent analysis of test results and further ongoing mapping work.

Summary of Welchau-1 Discovery Well Update and Outlook

The update from ADX Energy Ltd (ASX:ADX) provides insight into the resources potential and the planned well testing program for the Welchau-1 discovery in Upper Austria. The company aims to commence an extended testing program on Welchau-1 to confirm the hydrocarbon characteristics, determine well productivity, the potential connected volumes, and ultimately estimate recoverable resource volumes from future potential development wells. The company's analysis suggests that Welchau is likely a high API hydrocarbon liquid and associated gas discovery. ADX plans to revise Welchau resource estimates following the planned testing program and provide an update on the follow-up exploration potential at the nearby Rossberg lead, as well as the deeper potential at Welchau in reservoirs below the 7" casing at the well's TD. The discovery of light oil at Welchau is expected to have significant economic implications, particularly in the context of Austria's crude oil requirements and refined product demand. The company also intends to execute an extended testing program to assess the reservoir's fluid type, flow capacity, and reserves potential. ADX has identified several follow-up target structures in the same gross trend as Welchau and has executed an Energy Investment Agreement to fund 50% of Welchau-1 well costs up to a well cost cap of EUR 5.1 million to earn a 25% economic interest in the Welchau Investment Area. The company remains optimistic about the economic significance of the Welchau discovery and is committed to providing further updates throughout the testing program.