ADX Energy plans deeper tests at HOCH-1 and a deeper gas target at Welchau-1

ADX Energy (ASX:ADX), a small European oil and gas producer, has two next steps lined up: deeper testing at its HOCH-1 well and a deepening of its Welchau-1 well. The company has not stated dates for either. Its disclosures point to a window running from late July to November 2026.

HOCH-1: deeper zones next

On 28 August ADX said Zones 3, 4 and 5 all flowed water-free gas. Commingled with Zone 2, the well produced 3.15 MMCFPD (548 BOEPD) over 12 hours. The well is now shut in for a pressure build-up to determine reserves. ADX plans to test at least two deeper Hall Channel zones in Phase 2, but that needs a workover rig to drill out a cement plug.

Earlier, a pressure build-up on Zone 1 indicated potential of 3.5 MMCFPD (580 BOEPD) and sand extending at least 600 m. Timing has already slipped once: further zone testing moved to the week of 24 August because an explosives licence for perforation was delayed.

Welchau-1: a deeper gas objective

On 20 July ADX said the deeper gas objective "can be reached cost effectively by deepening Welchau-1 well". It has not given a start date or cost.

Why it matters

ADX produced 197 BOEPD in the June quarter, against 200 in March. If HOCH-1's flows hold up, the well's tested rates would be large relative to that base. That is an inference, and the company has yet to report reserves from the well.

The company's listed assets are mostly unproven. Of the five resource figures disclosed with a company interest, ADX holds 100% of Carp-55 (gas contingent P50 17.4 bcf, prospective P50 8 bcf, stated 2018) and three Italian D363 leads (13, 12 and 14 mmbbl prospective P50, stated 2016). It holds 50% of BUCH (gas prospective P50 7.6 bcf). Several other estimates, including Anshof at 31.3 mmbbl, carry no disclosed interest, and some date from 2012 to 2019.

Funding and other uncertainties

Unrestricted cash fell from A$4.88m to A$2.20m in the June quarter, before a A$3.58m July placement. Loan notes of A$750k remain drawn. A GOLD-1 farmout and early fourth-quarter drilling were flagged, and ADX anticipated a farm-in in the coming quarter.

ADX has also applied for three Sicily Channel permits, d 368, d 369 and d 370 C.R-AU. Together with CR 150.AU, they would cover about 1,650 km². None has been granted, and a three-month competing-application window applies.