ADX Energy (ASX:ADX) has commenced drilling operations at the Lichtenberg-1 gas exploration well in Upper Austria.
The well, situated in the ADX-AT-I exploration licence area, was spudded on Sept. 26.
The LICHT-1 well will target an Upper Oligocene sandstone reservoir along with two slightly shallower, geologically similar reservoirs.
"The board of ADX is delighted to follow on from the successful drilling of the Anshof-2A oil appraisal well with the first gas prospect to be drilled in the ADX-AT-I exploration licence targeting potentially high productivity Oligocene sandstone reservoirs," said Paul Fink, CEO of ADX Energy.
Success at the LICHT-1 well could potentially lead to significant gas production and net cash flow growth within a year.
Several nearby 3D seismic-defined gas prospects are also being considered for future exploration to increase the targeted gas reserves further.
The drilling operation is expected to take approximately 30 days to reach a total measured depth of around 2900m. MND Austria will fund the first €4.5 million ($7.3 million) of the drilling costs for the LICHT-1 well, in addition to a prior €400,000 ($649,602) cash payment, to earn a 50% interest in the well and part of the ADX-AT-I licence.
ADX will retain a 100% interest in the remaining parts of the licence.
The same rig used for the successful Anshof-2A appraisal well is being deployed for the current drilling activities.
Success at LICHT-1 and subsequent exploration prospects could lead to long-term gas production and enhance ADX's gas reserves.
At the time of reporting, ADX Energy’s share price was $0.10.