Legal Delays Stall Welchau Testing as ADX Expands Austrian and Italian Exploration
ADX Energy reported a 13% rise in Austrian production and a 15% increase in sales revenue for Q1 2025, while Welchau-1 well testing remains suspended pending legal review. The company also secured a key Italian gas exploration permit, positioning for growth across Europe.
- Austrian net production up 13% to 246 BOEPD
- Sales revenue increased 15% to A$2.5 million
- Welchau-1 well testing suspended due to environmental clearance objections
- Upper Austria licences renewed and varied to include multiple shallow gas prospects
- Sicily Channel Gas Exploration Permit offshore Italy offered and accepted, formal award expected May 2025
Production Growth in Austria
ADX Energy Ltd (ASX:ADX) has reported a solid operational quarter ending March 2025, with Austrian net production averaging 246 barrels of oil equivalent per day (BOEPD), marking a 13% increase from the previous quarter. This uplift was driven primarily by a successful well workover program in the Vienna Basin Fields, which saw production rise from 194 BOEPD in December 2024 to 229 BOEPD in March 2025. The Anshof oil field contributed an additional 56 BOEPD net, supporting the overall production growth.
Correspondingly, sales revenue climbed 15% to A$2.5 million, reflecting both higher volumes and stable oil pricing, with Brent crude averaging USD 75.66 per barrel during the quarter. ADX has also implemented a rolling hedging strategy to stabilize near-term revenues amid market volatility, hedging 100 BOPD of Vienna Basin crude at put and call strike prices of USD 65 and USD 75.20 per barrel respectively.
Welchau-1 Testing Suspended Amid Legal Challenges
Despite operational progress, testing at the Welchau-1 well in Upper Austria was suspended following objections from environmental NGOs to the Environmental Clearance. A recent court ruling repealed a law that previously allowed testing to continue during appeal processes, leading to a halt in operations pending the State Administrative Court of Upper Austria's decision. The well had shown promising hydrocarbon indications during initial testing phases, but further analysis and testing are now on hold.
ADX is monitoring well pressure and plans to recommence testing once legal clarity is achieved. The company remains optimistic about the Welchau play’s potential, which is part of a broader portfolio including deeper Jurassic oil and gas prospects.
Licence Renewals and Exploration Expansion
During the quarter, ADX secured renewal of its ADX-AT-I and ADX-AT-II exploration licences in Upper Austria through to the end of 2028. The licences were also varied to incorporate multiple new shallow gas prospects and extensions to the Welchau play and Rossberg prospect. These shallow gas plays, identified using advanced 3D seismic and artificial intelligence techniques, represent low-risk, low-cost drilling opportunities with rapid commercialisation potential due to proximity to existing infrastructure.
ADX has matured three drill-ready shallow gas prospects and identified up to seven additional leads, positioning the company to attract funding partners and commence drilling later this year. Near-field appraisal prospects around Anshof are also being advanced, with plans to drill appraisal wells to support production growth.
Italian Offshore Permit and Strategic Positioning
ADX’s strategic footprint expanded with the offer and acceptance of the Sicily Channel Gas Exploration Permit offshore Italy. Formal award by the Italian Ministry of Environment and Energy Security is anticipated by mid-May 2025. The permit area is highly prospective for sweet gas, supported by historical wells and proximity to existing gas infrastructure.
Following the permit award, ADX plans to acquire additional seismic data to refine resource assessments and engage independent evaluations. The company highlights attractive fiscal terms, shallow drilling depths, and a supportive political environment under Italy’s current government as key enablers for exploration success.
Financial Position and Outlook
ADX ended the quarter with a robust cash balance of A$6.7 million, supporting ongoing exploration and development activities. The company also extended repayment terms on A$1.25 million of loan notes to March 2026, providing financial flexibility. Capital expenditure during the quarter focused on well testing and connecting new production wells.
Looking ahead, ADX plans to recommence Welchau-1 testing pending court decisions, progress drilling of shallow gas and appraisal wells in Upper Austria, and advance seismic acquisition and resource updates in Italy. The company is also exploring renewable energy and hydrogen storage projects in the Vienna Basin, aligning with a multi-energy transition strategy.
Bottom Line?
ADX’s blend of production growth, exploration expansion, and strategic permit acquisitions sets the stage for a pivotal year, though legal and regulatory hurdles remain key watchpoints.
Questions in the middle?
- When will the State Administrative Court of Upper Austria resolve the Welchau-1 Environmental Clearance objections?
- How quickly can ADX secure funding partners to drill the newly identified shallow gas prospects?
- What impact will the formal award and subsequent exploration activities in the Sicily Channel have on ADX’s production profile?
