ADX lands Austrian geothermal partnership

ADX Energy has finalised commercial arrangements to enter the European geothermal power market via a ground breaking pilot project at its 100 per cent owned Austrian tenure. ADX will partner up with German energy giant, Siemens Energy and Austrian drilling outfit, RED Drilling and Services as it looks to expand into commercial-scale geothermal power generation to supplement its existing oil and gas production in the Vienna Basin.

The three parties have agreed final commercial arrangements to evaluate geothermal power generating technology on ADX’s tenure.

The pilot project will test a closed system CO2 based geothermal power generation technology utilising an existing reservoir and well. According to the company, the technology holds the potential to be six times more efficient than existing geothermal systems. The new method of geothermal power generation has the potential to contribute to a profitable and integrated transition to green energy production for ADX whilst preserving and enhancing the value and lifespan of its existing oil and gas assets.

ADX and Red Drilling have selected the best location for the pilot project on an existing well site with the best heat transfer attributes, an exceptionally high geothermal gradient and highly porous and permeable reservoirs that will allow solid flow capacities and deliver high volumes of hot recycled CO2. Technology provided by Siemens will convert heat captured by the recycled CO2 to electricity.

ADX is the acting operator for the permit and will be responsible for all aspects of stakeholder relations and operations including engineering and geological analysis.

Red will provide all well workover and related services for the pilot project and Siemens Energy will provide the expertise in thermodynamic engineering and evaluation of the power generation system employed for the project.

According to ADX the pilot project will provide the company with the necessary knowledge and experience to develop and deploy suitable geothermal power generation technologies on a large commercial scale at it’s Austrian licenses and throughout its Central European acreage holdings where ADX has identified geothermal power generation opportunities. The company says the project is designed to provide proof of concept in extending the life of existing fluid production systems in geothermally suitable locations in an energy transition from oil and gas to electrical energy for the European market. Engineering, planning and procurement work is expected to commence during October 2021.

Whilst ADX advances energy transition projects such as this one, it continues to extend the life of its oil and gas producing assets. The company recently extended its oil price hedging position for its Vienna Basin field production.

Its latest Brent crude swap contract with BHP has been secured at USD$71.85 per barrel and extends its previous fixed price swap contracts scheduled to expire at the end of October and the end of December 2021. The previous swap contracts were at USD$66.03 per barrel, hedged until the end of December 2021 and USD$71.71 per barrel to the end of October 2021. Those contracts covered 200 barrels per day or 80 per cent of forecast proven oil production with each contract covering 100 barrels per day.

ADX has secured the new contracts to lock in a solid portion of its realised price for produced oil for the period from the 1st of November 2021 to the 31st of March 2022 at the improved price of USD$71.85.

Interestingly, ADX has reduced its volume of hedged production by half, down from 200 bbls per day to 100 bbls per day. The company says the Gaiselberg and Zistersdorf fields in the Vienna basin continued to pump out an average of 306 bbls oil equivalent per day during the first half of 2021. With Brent crude futures continuing to improve, ADX says its hedging strategy intends to secure the current strong revenues from production whilst retaining exposure to further upside in Brent crude oil pricing.

With strong production and improving oil prices ADX says it intends to pursue further well work to enhance production and continue its program of portfolio growth in oil and gas whilst expanding its compatible green energy development opportunities.

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