MCF Energy Provides an Operations Update

VANCOUVER, BC, Oct. 22, 2024 /CNW/ - MCF Energy Ltd. (TSXV: MCF) (FRA: DC6) (OTCQX: MCFNF) ("MCF", "MCF Energy" or the "Company") is pleased to announce an operations update for projects in Austria and Germany. 

Austria

The target date to commence operations is November 4 2024. The Welchau-1 well test program is designed to confirm the hydrocarbon characteristics, determine well productivity, the potential connected volumes and ultimately an estimate of recoverable resource volumes from future potential development wells.

Austria- Background

The Welchau-1 well was suspended on March 28, 2024 for future well testing after running and cementing 7-inch casing down to the well total depth ("TD") at 1,733 metres measured depth.  Operations were suspended to comply with the conditions of environmental permits limiting drilling and testing operations to the Austrian winter months from October 1, 2023 to March 31, 2024.

Based on the data analysis to date, it is most likely that Welchau is a high API hydrocarbon liquid (gas condensate to very light oil with 43.6° API gravity) and associated gas discovery rather than a liquids rich gas discovery as was predicted prior to drilling.

The formations of greatest interest are the Reifling and the Steinalm from a resource perspective, both of Triassic age (around 240 million years). The two prospective formations will be tested with the first being the primary target of the well, the Steinalm Formation (118 metres), a fractured carbonate sequence which was encountered in the nearby, downdip Molln-1 discovery well that tested condensate rich gas in 1989. 

The Steinalm will be perforated, and flow tested. An acid stimulation program has been designed and may be used to clean up any formation damage which occurred during the drilling process. Austrian legislation allows the cumulative production of up to 30,000 barrels of oil and gas equivalent during the testing phase. The planned sequence of operations and testing has a duration for the Steinalm formation of between six to ten weeks.

The second zone to be perforated and tested will be the Reifling Formation (128 metres), just above the Steinalm. This interval is a fractured carbonate sequence, looks very promising from both logs and hydrocarbon shows. An acid stimulation program for the Reifling Formation has been designed and may be used to clean up any formation damage which occurred during the drilling process. 

After testing and results evaluated the well may be drilled deeper to explore additional targets below the current zones. Based on current structural modelling there remains over 1,000 metres of exploration potential located below the current Welchau-1 well total depth.

MCF has executed an Energy Investment Agreement (EIA) with ADX VIE GmbH ("ADX") to fund some past costs and 50% of Welchau-1 well costs up to a well cost cap of EUR 5.1 million to earn a 25% economic interest in the Welchau Investment Area. MCF has met its funding obligations and has earned in the Welchau Investment Area within the ADX-AT-II licence in Upper Austria. This area contains the Welchau discovery well and other emerging oil and gas prospects. MCF is obliged to pay 25% of ongoing well costs.

Germany

Lech

Drill site construction for the Kinsau-1A well began on October 15^{, ,} 2024 with the clearing of the site (see Figure 1 below) in preparation for exhuming of the Kinsau-1 well casing.  The surface casing from the original well has been located and the abandonment cement exposed.  This concrete will be carefully removed and a new well head installed.  A cellar will be opened, and the drill pad built around the site.  It is estimated that the site will be drill ready by mid-December.  Rig availability is being determined with drilling estimated to start in Q1 2025.

Lech- Background

The Kinsau-1A drilling project is a re-entry and redrill of the Kinsau-1 discovery well, originally drilled in 1983 by Mobil, which produced impressive test results of over 24 million cubic feet (MMCF) of gas and condensate per day.  Mobil drilled the Kinsau-1 well to a depth of 3940 metres, where it encountered basement rocks. Gas and condensate indications were found within the Jurassic Purbeck Formation at 3,179 metres. The well was completed by stimulating it with acid and tested over a 22.5-metre perforated interval. The entire well test took 3.5 months to complete. A variable rate test was conducted on July 28, to 29^. 1983 with three flowing rates reported: 7,712 thousand cubic feet per day (MCFD) at 2,973 psi, 14,832 MCFD at 2,785 psi, and 24,706 MCFD at 1871 psi. The total test pressure dropped from 4,110 psi to 4,090 psi (283.4 to 282 bar). The test resulted in a recovery of 45.9 MMCF of gas and 1,510 barrels of condensate. These test results are not necessarily indicative of long-term performance or of ultimate recovery.

MCF Energy plans to leverage existing infrastructure to minimize costs and enhance efficiency of the Kinsau 1A well, using nearly 1,000 metres of existing steel and cemented casing from the original well to safeguard groundwater reservoirs. 

Through its German subsidiary Genexco GmbH, MCF Energy has a 20% interest in the Lech Concession (approximately 6 km²) and is carried by the operator Genexco Gas GmbH for the costs of the upcoming Kinsau-1A well up to EUR 5 million.  Consequently, MCF does not anticipate requiring additional capital for the drilling and testing of this potential high-impact well. Several additional well locations on the Lech Concession have been identified for potential development from this drill site. 

Lech East

MCF Energy holds a 100% interest in the Lech East Concession (approximately 100 km²), which is positioned to the north and east of the Lech Concession, adjacent to the Kinsau-1 discovery well and is fully surveyed with 3D seismic. The 3D has been analyzed with AI and machine learning tools with additional well locations identified. The surface location of the first test well has been selected and surface lease negotiated.  The environmental report has been submitted and well planning has started.  We anticipate having a permit to drill by Q2 of 2025. 

Reudnitz Gas Field

The first stage of the rework on the Genexco Reudnitz-Z2a horizontal well in the Reudnitz Gas Field has been completed with the flow-back of the freshwater soak to clear away the buildup of salts restricting flow from the well. The well was opened and the flow-back of the fluids began within the 5-inch casing string. Pressures within the well pushed over 30 barrels of water from the well and continued with a stable gas flow rate of over 1,000 cubic meters per hour. This is a very positive result in light of the flow attained through 5-inch casing; continued testing will be done with installation of smaller production tubing and possible acid stimulation.  Lime Petroleum has earned the option to farm into the project by funding the flow test and contingent on successful final testing, it will commit an additional EUR 5.5million to construct an extraction plant to provide pipeline quality gas into the German gas grid. Gaffney Cline & Associates ("GCA") has independently assessed the resource best estimate for Reudnitz (P50) of 118.7 billion cubic feet (BCF) of Methane, and 1.49 BCF of Helium resource.

During drilling of the Reudnitz 2Za well oil-stained core within the Zechstein carbonate were recovered. Oil bearing reservoirs are found within the Zechstein and GCA has estimated the potential for oil resources in the Zechstein Formation of 4.4 million barrels of oil.

Czech Republic

Progress has been made returning the NP-823 well to production. The well has been re-entered and little fluid was found confirming fluid-free gas production.  Installation of a dehydration unit is scheduled in the next few weeks after which inspection production can begin. Increased production is planned by installing a compression unit onsite in the coming months. 

Application for a long-term testing permit for the LM-3 well has been submitted for approval. Once approved, this will allow installation of a gas to electric power unit.  Plans are to power a Data Center unit, a Bit Coin Mining unit and after approval, feed up to two mega watts into the local power grid. Later installations will include an natural gas  compression unit so gas can be transported to the NT-2 site where gas will be sold into the pipeline. 

Inspection of the NT-2 well is  planned in the upcoming quarter with plans to return that well to production. This will complete the rework program and the return of these three wells to production. 

James Hill, CEO and Director of MCF Energy, stated, "Finally through the hard work of our staff, all our projects are active and underway. I am very excited to begin testing on the Welchau-1 well in Austria and the start of the drill site construction for the Kinsau-1A well site in Germany. The first phase testing of the Z2a horizontal well at Reudnitz has turned out better than expected, and good progress is being made returning our wells in the Czech assets to production in the next few weeks. I am grateful for the continued support of our shareholders while the Company strives to enhance value and meet our operational objectives. The fourth quarter of 2024 will be busy and impactful for the Company, and we expect to be providing many updates in the coming months as these projects proceed."

About MCF Energy

MCF Energy was established in 2022 by leading energy executives to strengthen Europe's energy security through responsible exploration and development of natural gas resources within the region. The Company has secured interests in several significant natural gas exploration projects in Austria and Germany with additional concession applications pending. MCF Energy is also evaluating additional opportunities throughout Europe. The Company's leaders have extensive experience in the European energy sector and are working to develop a cleaner, cheaper, and more secure natural gas industry as a transition to renewable energy sources. MCF Energy is a publicly traded company (TSX.V: MCF; FRA: DC6; OTCQX: MCFNF) and headquartered in Vancouver, British Columbia. For further information, please visit: www.mcfenergy.com.

Additional information on the Company is available at www.sedarplus.ca under the Company's profile.

Cautionary Statements:

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Advisories:

Forward-Looking Information

This press release contains forward-looking statements and forward-looking information (collectively "forward-looking information") within the meaning of applicable securities laws relating to the Company's plans and other aspects of our anticipated future operations, management focus, strategies, financial, operating and production results, industry conditions, commodity prices and business opportunities. In addition, and without limiting the generality of the foregoing, this press release contains forward-looking information regarding the anticipated timing of development plans and resource potential with respect to the Company's right to assets in Austria. Forward-looking information typically uses words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future.

The forward-looking information is based on certain key expectations and assumptions made by MCF Energy's management, including expectations and assumptions noted subsequently in this press release under oil and gas advisories, and in addition with respect to prevailing commodity prices which may differ materially from the price forecasts applicable at the time of the respective Resource Audits conducted by GCA, and differentials, exchange rates, interest rates, applicable royalty rates and tax laws; future production rates and estimates of operating costs; performance of future wells; resource volumes; anticipated timing and results of capital expenditures; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; the timing, location and extent of future drilling operations; the state of the economy and the exploration and production business; results of operations; performance; business prospects and opportunities; the availability and cost of financing, labour and services; the impact of increasing competition; the ability to efficiently integrate assets and employees acquired through acquisitions, the ability to market natural gas successfully and MCF's ability to access capital. Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because MCF Energy can give no assurance that they will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. MCF Energy's actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that we will derive therefrom. Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide securityholders with a more complete perspective on future operations and such information may not be appropriate for other purposes.

Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of this press release and we disclaim any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Oil & Gas Advisories

Abbreviations:
Bar	1 atmosphere (14.5 pounds per square inch)
Bcf	billion cubic feet
Bcfe	billion cubic feet of natural gas equivalent
Bbl	barrels
Boe	barrels of oil equivalent
M	thousand
MM	million
MMbbls	million barrels of oil
MMBOE	million barrels of oil equivalent
MMBC	million barrels of condensate
MMcf	million cubic feet of natural gas
Mcfe	thousand cubic feet of natural gas equivalent
MCFD	thousand cubic feet of natural gas per day
psi	pounds per square inch
MMcfe/d	million cubic feet equivalent per day
Scf	standard cubic feet
Tcf	trillion cubic feet
Km2	square kilometres
€	Euros

SOURCE MCF Energy Ltd.

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