Mr. Jim Hill reports

MCF ENERGY SETS PRODUCTION CASING AT AUSTRIA'S WELCHAU-1 DISCOVERY; PREPARING FOR IMMINENT DRILLING AT GERMANY'S LECH

MCF Energy Ltd. is pleased to update the drilling progress of the Welchau-1 exploration well in Austria, and to update on anticipated operations in the Lech and Lech East concessions in Germany.

Welchau-1 update

Further to the announcement by MCF Energy on March 18, 2024, of the discovery of condensate rich gas shows at Austria's Welchau-1 well, an extensive logging program has been completed, revealing high correlation between hydrocarbon shows and open fracture networks essential for well productivity. The well continues to show strong indications of hydrocarbons in the mud system and has flowed hydrocarbons to surface despite overbalanced mud weight. Production casing will be run.

The Welchau-1 well was drilled an 8-1/2-inch hole to a total depth (TD) of 1,733.1 metres, where a full set of wireline logging tools and an MDT formation test tool was run. The well encountered hydrocarbon shows between the depths of 1,346 metres measured depth (MD) and 1,702 metres MD (a 35-metre gross interval) across three interpreted lithological sequences. At 6 a.m. Central European Time (CET) on March 24, 2024, the well bore was being conditioned prior to running production seven-inch casing.

An extensive logging program was run in the 8-1/2-inch section, which included an image log and cross-dipole sonic in addition to standard logs for well evaluation. Visual interpretation of these logs clearly proves the presence of different types of porosity (vuggy and open fractures). Intervals with strong hydrocarbon shows correlate to either fractured zones or zones with vuggy porosity.

Hydrocarbon shows

Strong hydrocarbon shows have been encountered below the sealing Lunz and Partnach formations. Several gas peaks as high as 8.22 per cent have been recorded in the reservoir formations below the seal. In addition to the gas shows, liquid hydrocarbon shows were also observed. Those include direct and cut fluorescence on cuttings and core fragments. In core fragments the fluorescence is associated with the presence of fractures. Liquid hydrocarbon and gas inflow were monitored in the well following logging operations further confirming existence of live hydrocarbons.

Formation sampling

The well was planned to be pressure recorded and downhole sampled by running the modular formation dynamic tester (MDT) in a dual-packer operations mode. The main objective of acquiring downhole samples of reservoir fluids have not yet been achieved.

Five pressure recordings from the interval 1,479 metres to 1,597 metres MD revealed a complex carbonate reservoir setting in an overpressurized hydraulic system at an equivalent formation density of 1.28 specific gravity. The corresponding permeability of the pressure tested levels show medium to very high permeability which is in agreement with fracture density and petrophysical log interpretation.

The inability to sample reservoir fluids using the MDT from the zones of interest was primarily due to the extensive mud losses into the open fractures of the well and limited testing time. Furthermore operational difficulties hindered the sampling procedures due to tool sticking and the inability to recover representative samples from the zones of interest. The recovery of the stuck MDT tool string required 72 hours of rig time and three attempts to bring the tool string safely back to surface.

During fishing operations to recover the stuck MDT tool, hydrocarbon shows continued to build until the well had to recirculate several times to clear the gas from the well bore to a safe level. Also a strong oil odour was present near the mud tanks and drill floor.

Next operations

Anticipated well operations in the coming week include the casing, cementing and suspension of the well to preserve the well bore for testing, stimulation and future production, followed by rig down and demobilization of the RED Drilling E200 drill rig. Permit restrictions require drilling and production testing to end by March 31. Permitting will commence immediately for anticipated testing of the Welchau-1 well in the fourth quarter of 2024. Future testing and potential deepening of the well can be done with a cost-effective workover rig.

The well was drilled efficiently and safely, with some drilling mud fluid losses but without any significant drilling problems. Well penetration rates were faster than the original well plan due to the use of new drilling bit technology. Well costs for this success case are in line with the predicted costs.

ADX Energy Ltd. and MCF Energy conformed and strove to exceed all environmental regulations during the drilling and will continue that practice during the upcoming completion operations, exceeding them when possible.

James Hill, chief executive officer of MCF Energy, stated: "After careful review of the logs at Welchau-1 well and continued, encouraging shows of hydrocarbons in the well and at surface, we are cementing seven-inch production casing to the bottom of the Welchau-1 well. We will finish our analysis of the logs and the cores we have recovered and are excited to return for production testing in October, 2024."

Update on operations at Lech and Lech East concessions, Germany

Lech and Lech East background: Through its German subsidiary Genexco GmbH, MCF Energy has a 20-per-cent interest in the Lech concession (approximately 10 square kilometres), and is carried for the costs of the upcoming Kinsau-1A well up to five million euros. Genexco GmbH has a 100-per-cent interest in the Lech East concession (approximately 100 square kilometres).

Lech concession operations update: On Tuesday, March 12, 2024, representatives of RED Drilling, Genexco and MCF met with the Wasserwirtschaftsamt of Bavaria (Water Board of Bavaria) to discuss the upcoming Kinsau-1A reentry of the 1983 Mobil discovery well Kinsau-1. All issues identified by the Water Board were resolved. This was the final approval needed in order to obtain the drilling permit for the Kinsau-1A well located on the Lech concession. The final drilling permit for Kinsau-1A is anticipated after Germany's Easter holidays, and procurement of a drilling rig is under way.

Drill site preparation of the Kinsau-1A location has begun with clearing of trees, with drill site construction to commence imminently.

Lech concession -- prior wells: The Kinsau-1 well drilled by Mobil on the Lech concession block in 1983 was targeting oil but tested natural gas at 24.7 million cubic feet per day and shut in, probably due to low gas prices at that time. A second well drilled on the block, Kinsau-2 again was looking for oil and was completed in the next deeper horizon at 3,228 to 3,238 metres and tested at approximately 180 barrels of oil per day, which probably was not economic at that time.

Kinsau-3 was drilled across a fault boundary and found an oil/water contact which flowed some minor oil and gas but almost 1,500 barrels of water per day, evidence that the reservoir has the capability to produce at a high rate. One of MCF Energy's first planned drilling locations on Lech East is on trend and up dip of this well.

Lech East concession update: In August, 2023, MCF Energy's German subsidiary Genexco GmbH was awarded the Lech East concession, which is on trend and to the north and east of the Kinsau discovery wells on the Lech concession. Both blocks were covered by a 160-square-kilometre 3-D survey which MCF has analyzed using the new artificial intelligence and machine learning technology.

Calibrating the seismic data to the Kinsau discovery wells, machine-learning-artificial intelligence software identified 13 similar or identical seismic targets to the discovery made at Lech in Kinsau. With success, 10 additional development wells have also been identified. Although not productive in the existing Kinsau wells, nine additional wells are spotted for the more shallow Baustein-Chatt formations which have excellent indicators of gas. These zones are gas productive in the region.

Genexco GmbH has just completed negotiations and signed the land access agreement with the landowner for the first location on Lech East and will begin the process to secure a drilling permit this year. Several targets can be reached from this surface location greatly simplifying the permit process for several additional wells.

James Hill, chief executive officer of MCF Energy, said: "We appreciate the Bavarian Water Board's initial approval for the Kinshau-1 well drilling. This partner funded well, and our plans for Lech East, represent scalable, low-risk, high-return opportunities for MCF to increase shareholder value in 2024. Thanks to nearby pipeline connections, we have begun discussions with the pipeline company to sell the gas."

"Our work in Germany and our new production concessions in the Czech Republic should come on-line this year. We will accomplish this by redrilling Kinshau-1 and getting our Czech wells running again. Our team's capability in identifying optimal targets informs our preparation of a Czech work program. The specifics of this program will be disclosed soon."

Please see MCF's news release dated Feb. 26, 2024, for a description of anticipated operations in the Czech Republic.

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. MCF Energy is a publicly traded company (TSX.V: MCF; FRA: DC6; OTCQX: MCFNF) and headquartered in Vancouver, B.C.

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