ADX Energy (ASX: ADX): Well test results at Welchau support interpretation of an updip light oil accumulation
• Following a small acidisation treatment (6 m³ across 45 m of perforations) in the Reifling interval at the Welchau‑1 well, gas and light oil were recovered at surface during swabbing operations. Although stable inflow was not achieved—indicating that the limited acid volume did not access the open fracture network—the response is encouraging given that the formation had previously been unresponsive.• The light oil recovered from the Reifling Formation is non‑biodegraded and matches the density of the oil sampled from the deeper Steinalm Formation during drilling. The oil–water contact is still interpreted to lie within the Steinalm, ~125 m below the top of the Reifling, indicating the light‑oil column at Welchau-1 has a 500 m updip component within the mapped crest of Welchau anticline.
• The well has been suspended to allow monitoring of pressure build‑up and fluid inflow. Depending on cost considerations, the company may use coil tubing to inject a larger acid volume to reach open fractures. An appraisal well near the structural crest could be drilled around YE26.
• Prospective resources at the Welchau deep‑gas prospect are likely to increase, as the current 65–125 bcf (P50–Pmean) estimate accounts for only two of the five horses in the shallower Duplex 1 array, while the deeper Duplex 2 has not yet been included in the resource assessment.
• We have improved our risking factor on Welchau and have increased our target price from A$0.20/sh to A$0.21/sh. ADX plans to spud the HOCH shallow gas prospect in April.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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