March 2, 2024

ADX Energy Ltd has received the final regulatory requirement for the Welchau-1 gas well in the ADX-AT-II license in Upper Austria.

ADX received an environmental clearance from the Department of Nature Protection of the State Government of Upper Austria, which is the final stage of the permitting process and the last regulatory approval required to begin drilling operations on the Welchau-1 prospect, the company said in a news release Wednesday. ADX holds an 80 percent economic interest in the Welchau Investment Area which contains the Welchau Gas Prospect and other emerging gas prospects.

The company intends to start drilling operations in January 2024, estimating a success-case drilling program to take approximately 39 days. MCF Energy Ltd. will fund 50 percent of the cost of the Welchau-1 well to earn a 20 percent economic interest in the Welchau Investment, according to the release.

ADX said it has purchased all the necessary long-lead items to drill the Welchau-1 well and will tap RED Drilling & Services GmbH for drilling rig services, which also handled the company’s first Austrian exploration well Anshof-3.

The Welchau gas prospect has best technical prospective resources of 807 billion cubic feet equivalent or 134 million barrels of oil equivalent. ADX said the Welchau prospect targets the same reservoirs as the nearby Molln-1 well which tested for pipeline-quality gas in 1989.

According to ADX, clearance from the Nature Protection Department took longer than expected, as the Welchau drill site was located on agricultural land and close to a small nature protection area. The regulator took extra care to balance all stakeholder interests, including “outspoken opposition from a small group of environmentalists with media connections”, resulting in a delay in the start of the project, the company said. ADX noted that the local community had not shown opposition to the project and “a large number of prominent community members have provided strong public support for the drilling of Welchau”. ADX agreed with the regulator to limit its drilling operations to the winter months when fauna and flora activity is at its minimum or completely inactive, in order to minimize any impact on the nearby nature protection area during the six to eight weeks of operations.

“The board of ADX is delighted that the last hurdle for the commencement of operations to drill the exceptional Welchau gas Prospect has been achieved”, ADX Executive Chairman Ian Tchacos, said. “While some delays have been experienced in receiving the Environmental Clearance, we continue to be impressed by the highly efficient and transparent regulatory environment for energy projects in Austria compared to many other jurisdictions. Despite opposition from activists, high media interest and the need for additional experts reports, decisions have been made in a relatively fast, predictable timeframe in accordance with a clear and enforceable legal framework. This Environmental Clearance is based on a balance between environmental, community, economic and energy security interests”.

“The drilling of Welchau comes at a time when Russian gas still supplies over 50 percent of Austria’s gas requirements but is now officially threatened to be cut off in 2024”, Tchacos continued. “The Welchau exploration project is an exceptional domestic energy supply and economic growth opportunity for the State of Austria. ADX and our partner MCF are committed to responsible gas exploration”.

In August, ADX received a permit to drill the Welchau-1 well from the Ministry of Finance of the Republic of Austria, or Bundesministerium fur Finanzen (BMF). The permit is tied to two specific rig types including a drilling rig and a work-over rig provided by drilling contractor RED Drilling & Services GmbH.

Under the terms of the permit, the Welchau-1 well can be drilled during the Austrian winter period between October 1 and March 31 during the term of the exploration license, ADX said in an earlier news release.

To contact the author, email rocky.teodoro@rigzone.com

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