ADX Energy Ltd has obtained the final regulatory approval required to proceed with drilling operations for the Welchau-1 gas well in the ADX-AT-II license in Upper Austria. The company received environmental clearance from the Department of Nature Protection of the State Government of Upper Austria, marking the completion of the permitting process.

This clearance is the last regulatory step necessary for ADX to commence drilling operations at the Welchau-1 prospect. ADX holds an 80 percent economic interest in the Welchau Investment Area, which includes the Welchau Gas Prospect and other emerging gas prospects.

The drilling operations for the Welchau-1 well are expected to commence in January 2024, with a success-case drilling program estimated to take approximately 39 days. Funding for 50 percent of the well's cost will be provided by MCF Energy Ltd., allowing them to earn a 20 percent economic interest in the Welchau Investment.

ADX has already acquired all necessary long-lead items for the Welchau-1 well and will enlist RED Drilling & Services GmbH for drilling rig services, the same company that handled ADX's first Austrian exploration well, Anshof-3.

The Welchau gas prospect holds significant technical prospective resources, estimated at 807 billion cubic feet equivalent or 134 million barrels of oil equivalent. This prospect targets the same reservoirs as the nearby Molln-1 well, which tested for pipeline-quality gas in 1989.

The clearance process took longer than anticipated, as the Welchau drill site is located on agricultural land close to a small nature protection area. The regulator ensured a balanced approach to stakeholder interests, including addressing opposition from a small group of environmentalists with media connections. ADX agreed to limit drilling operations to the winter months to minimize impact on the nearby nature protection area during the six to eight weeks of operations.

Ian Tchacos, ADX Executive Chairman, expressed the board's delight at overcoming the final hurdle for the Welchau gas prospect. Despite delays, Tchacos emphasized the efficient and transparent regulatory environment in Austria for energy projects. The Welchau exploration project is viewed as a crucial domestic energy supply and economic growth opportunity for Austria.

ADX's partner, MCF, joins in the commitment to responsible gas exploration. The project gains significance amid concerns about the potential cut-off of Russian gas supplies to Austria in 2024, making the Welchau exploration project a valuable asset for the state's energy security and economic development.