Here
https://adx-energy.com/wp-content/uploads/2024/04/Auctus-Advisors-Important-step-to-unlock-Sicily.pdfAdx website is telling us that they are going to deepen the Welchau 1 exploration well.
This will cost some extra money because deepening the well will not be done with a low cost work over rig. There a real drilling rig will be needed plus all necessary oilfield service companies. Including the mob and de- mob fee for the rig. I am not excited for this not insignificant extra cost but I think this are the reasons we should bit the bullet :-(
1. Water Contact
usually when a gas and oil company discovers hydrocarbons it drills deeper till the drilling bit hits the water contact or you can assume there is no more chance to find more gas/oil. As I understand Adx did not see the water contact, and Adx finished drilling too early. Not so smart decision or situation (.. but see end of text about smart and luck). In this case our bitter pill has got some sugar coating because it can increase the reserves (I used here optimistically already the term reserves and not resources).
2. Low Permeability
The term h x k (pluse some other parameters as p) rule the production rate, if economical or not. At Welchau our Adx reported a tight Steinalm Formation matrix with some vuggurs and natural fractures. This can deliver a nice production rate only, when the seen fractures are connected to a big natural fracture network. Adx gave us NO indication that they have seen such a BIG FRACTURE NETWORK. Such hint could come from downhole sampling and pressure measurements (for me or as I understand I did not see this hints from Adx). If the Welchau 1 did not hit such a fracture network with the drill bit the test rate from the at the moment existing well can be dissapointingly low.
A) Drilling another 700 meters for example can increase the probability to hit a natural fracture network
B) If we do not hit more connected fractures, at least Adx increases the number of h to perhaps 1.000 meters, which is good to get a better h x k.
3. Perforation and optimised completion
It is not always easy to hit a fracture with a drill bit. And it is even more sophisticated/difficult to hit perhaps the only one important fracture with a connection to a bigger natural fracture system behind a cemented liner as we have at Welchau 1 with a perforation shot. So by drilling deeper Adx has now the chance to optimize their completion. Hopefully Adx knows already that the Steinalm is a good consolidated formation (or not?) . If good consolidated no cemented liner will be needed and for example big acid stimulation jobs could be done to improve production rates.
However, as always in the past, again Adx has delivered mixed and so so results with Welchau 1. First I was almost exited when I read the first reports with hydrocarbon shows, fracturs etc. I was happy that Adx hit a Steinalm Formation with gas. The down side: Adx delivered no economical production rate. They delayed the production test to Autumn, end of the year and plan to deepen the well. Till today it is no clear picture of the
results and thats the reason the share price is down again. Again we need the luck that the Anshof side track delivers and/ or the shallow gas project in Upper Austria is a hit and/or the Welchau 1 deepening is a hit and or again the Italian offshore adventure delivers the game changing hit for the Adx share holder. For the billionair wildcater Moncrief luck was more important than for example being smart. I realy hope that Mr Tchacos will deliver the one hit with some extra luck and not again a so so result. If Mr Tchacos would have had the necessary luck, Adx Welchau 1 would have hit a fracture of half a meter connected to a big extensive fracture network and not millimeters without knowing if there is a fracture network in the Steinalm Formation. And such a lucky hit would have overruled the not so smart decision or situation to stop drilling too early at Welchau 1.
(20min delay)