ADX Energy has sealed the deal to bring London-listed Empyrean Energy aboard to help bankroll the next gas well in Upper Austria, a savvy move that de-risks the company’s drilling campaign hot on the heels of a significant gas discovery.

Under the terms of the formal investment commitment, Empyrean will fund 20 per cent of GOLD-1’s drilling, completion and testing costs for a 10 per cent interest in the GOLD Cluster Area within the ADX-AT-II licence. Signed at the end of October, the Energy Investment Agreement cements a partnership to explore, develop and produce in the cluster. ADX has started site construction and secured a rig slot for January 2027.

The deal backs ADX’s Upper Austrian shallow-gas play, which gained a boost after its HOCH-1 discovery well flowed gas from multiple zones. A 12-hour test combining four zones delivered water-free gas at an average of 3.15 million cubic feet per day, equivalent to 548 barrels of oil equivalent per day.

The result gives ADX an encouraging proof point for its model, which targets biogenic methane in shallow Miocene sandstones.

The next test is GOLD, 40km east of HOCH, with a mean prospective resource of 8.3 billion cubic feet of gas (Bcf). Estimates range from 4.1Bcf to 13.4Bcf, with a best estimate of 7.5Bcf. These are undiscovered resources, not reserves, and further exploration and appraisal are required to establish whether a significant quantity of potentially movable gas exists.

SCHOE, the third well in the campaign, lies immediately south of HOCH and carries a 6.3Bcf mean estimate, while HOCH’s mean is 8Bcf. Their similar scale and shared geological model give ADX a cookie-cutter line-up, with more lookalike prospects waiting in the wings.

To secure its stake, Empyrean has already paid a non-refundable €50,000 (A$81,000) option fee and will stump up €555,400 (A$900,000) towards the well’s estimated €2,777,000 (A$4.5 million) cost. ADX will remain the operator, keeping its hands firmly on the wheel.

Empyrean will earn a 10% economic interest in the GOLD Cluster Area by funding 20% of the GOLD-1 well drilling, completion and testing costs.

Empyrean’s contribution represents 20 per cent of GOLD’s well-cost cap. Within five days of signing, it is due to pay a further €70,600 towards its share of pre-drill costs for long-lead items and site construction. Any unused funds can go towards its share of a subsequent cluster well; after earning in, it will meet 10 per cent of future partnership costs.

With the funding pathway for GOLD now clear, ADX is targeting a first-quarter 2027 spud, followed by a move to SCHOE, the third well in its shallow-gas campaign.

The commercial kicker for ADX’s Upper Austrian shallow-gas play is its proximity to infrastructure. The prospects are centred on the Miocene Hall Formation sands, which can be thin yet productive and lie just 2km from open-access pipelines. With European gas at €105 (A$169) per megawatt hour, or US$34.30 (A$53) per million British thermal units, and storage at 75 per cent - the lowest for this time of year since 2017 - domestic supply is particularly valuable.

While the shallow-gas campaign moves forward, ADX is targeting a 100-barrel-of-oil-equivalent-per-day lift from Vienna Basin workovers, a 40 per cent increase in current Austrian output. Production from Vienna Basin and Anshof supports the growth and exploration program.

ADX’s larger exploration upside lies at Welchau in Austria and the Sicily Channel offshore Italy. Welchau hosts a light oil discovery and a deeper, undrilled gas-condensate target with a mean prospective resource of 387 billion cubic feet. An independent review supported a 31 per cent increase in the Sicily Channel estimate to 619 billion cubic feet.

To keep the Austrian program moving, ADX has launched a two-for-five renounceable rights issue to raise up to A$5.2 million at 1.2 cents a share. The funds will mainly support production-enhancement work in the Vienna Basin, phase-two testing of the HOCH gas discovery and the drilling, testing and completion of the GOLD well.

By bringing a partner in to share the load at GOLD, ADX has kept its foot on the accelerator in Austria. With cash flow from existing fields, a gas discovery under testing and a funded well ready to go, the company is building serious momentum. Success at GOLD could quickly turn this Austrian gas hunt into a full-blown production build-out.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au