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MCF Energy Ltd
Symbol MCF
Shares Issued 241,000,000
Close 2024-03-15 C$ 0.265
Market Cap C$ 63,865,000
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MCF Energy drills 115 m of gas at Welchau-1 in Austria

2024-03-18 08:49 ET - News Release

Mr. James Hill reports

MCF ENERGY ANNOUNCES SIGNIFICANT GAS DISCOVERY IN AUSTRIA

MCF Energy Ltd. has made a potentially significant gas and condensate discovery at the Welchau-1 well in Austria. The well encountered 115 metres of rich gas shows between 1,452 metres and 1,567 metres with strong evidence of natural fracturing, essential for gas production performance. A hydrocarbon seal was confirmed above the primary target, mitigating a major risk with the project. The Welchau prospect, measuring over 100 square kilometres, is near pipelines and offers numerous potential drilling sites. Initiatives for testing, detailed analysis and forward planning are currently under way.

The Welchau-1 well was drilled to a total depth of 1,733.1 metres using an 8.5-inch bit. A suite of wireline logging tools, along with an MDT formation test tool, will be deployed for down-hole pressure measurement, inflow testing and formation fluid sampling in the targeted zones. Following the logging phase, a seven-inch production casing will be installed and cemented to secure the wellbore for subsequent testing, stimulation and potential production activities.

Above the primary target, drilling encountered a 380-metre section of the Lunz formation, which has effectively trapped gas and condensate. This formation served as an essential seal, with results from this well successfully mitigating initial concerns about its quality and thickness.

The well reached its main target, the Steinalm formation, at a depth of 1,452 metres, aligning closely with the anticipated geological model. The Steinalm formation is the same zone which flowed gas and condensate from the down-dip Molln-1 well, drilled previously by OMV in 1989.

The Welchau-1 well encountered rich gas shows over a 115-metre interval from 1,452 metres to 1,567 metres. Fluorescence, indicating the presence of liquid hydrocarbons, was observed from 1,507 metres to 1,563 metres. The highest gas peaks were associated with fractures in the limestone, accompanied by a hydrocarbon odour in unwashed samples. The deepest gas shows were found at a depth of 1,645 metres. The compositional analysis of the gas shows at Welchau closely matches the condensate-rich gas previously tested in the Molln-1 well.

The Steinalm formation is extensively fractured, exhibiting gas shows ranging from methane (C1) to isopentane (C5), indicative of mobile natural gas enriched with liquid condensates. A whole core was extracted from the formation between 1,511 metres and 1,519 metres to analyze rock characteristics, such as lithology, mineralogy, stratigraphy and petrophysical properties. This information aims to enhance gas production completion and performance. A continuous core of seven metres was recovered, sectioned into one-metre segments and stabilized with foam for laboratory transport. Examination of the cut surfaces confirmed the existence of an extensive natural fracture system.

During the core recovery and preservation process, a strong gasoline odour was noted emanating from the core barrel. The visible ends of the cut core sections revealed a highly fractured carbonate structure.

The well achieved its total depth of 1,733.1 metres at 5:22 p.m. Central European Time on Sunday, March 17. It appears the wellbore penetrated beneath the main thrust fault responsible for the formation of the Welchau anticline structure and commenced drilling into what is believed to be the younger Reifling formation located below the fault before reaching the total depth.

The drilling of the well was carried out both efficiently and safely, experiencing only minor losses of drilling mud fluid and no significant drilling issues. The rate of penetration surpassed expectations set in the original plan, thanks to new drilling technology. The project is advancing as anticipated, with plans to complete the well for testing and eventual production aligning with the success-case scenario. The costs associated with this phase are consistent with initial projections.

ADX and MCF have complied with and aimed to surpass all environmental regulations throughout the drilling process. This commitment to environmental stewardship is expected to continue into the planned completion operations, with efforts to exceed standards wherever feasible.

MCF Energy will finance the Welchau-1 well costs up to 50 per cent of the cap of 5.1 million euros and 25 per cent of any well costs exceeding the cap to earn a 25-per-cent economic interest in the Welchau investment area. The Welchau gas prospect has exceptional gas resource potential, located in the heart of Europe at a relatively shallow drill depth and proximal to gas pipelines.

James Hill, chief executive officer and a director of MCF Energy, stated: "The results we have seen after entering the target zone are exactly what we had hoped for in a gas discovery well. The discovery of gas and hydrocarbons in the massive Welchau structure could be a game-changer for Austria in the struggle for energy security and independence."

About MCF Energy Ltd.

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.

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