Mr. James Hill reports

MCF ENERGY PROVIDES AN OPERATIONS UPDATE

MCF Energy Ltd. has provided an operations update for projects in Austria and Germany.

Austria

The target date to commence operations is Nov. 4, 2024. The Welchau-1 well test program is designed to confirm the hydrocarbon characteristics, and 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 seven-inch casing down to the well total depth at a 1,733-metre measured depth. Operations were suspended to comply with the conditions of environmental permits, limiting drilling and testing operations to the Austrian winter months from Oct. 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-degree 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) and 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 10 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, and 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 are evaluated, the well may be drilled deeper to explore additional targets below the current zones. Based on current structural modelling, there remain over 1,000 metres of exploration potential located below the current Welchau-1 well total depth.

MCF Energy has executed an energy investment agreement with ADX VIE GmbH to finance some past costs and 50 per cent of Welchau-1 well costs up to a well cost cap of 5.1 million euros to earn a 25-per-cent economic interest in the Welchau investment area. MCF Energy has met its financing 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 Energy is obliged to pay 25 per cent of continuing well costs.

Germany

Lech

Drill site construction for the Kinsau-1A well began on Oct. 15, 2024, with the clearing of the site, 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 first quarter 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 of gas and condensate per day. Mobil drilled the Kinsau-1 well to a depth of 3,940 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 and July 29, 1983, with three flowing rates reported: 7,712,000 cubic feet per day at 2,973 pounds per square inch, 14,832,000 cubic feet per day at 2,785 pounds per square inch and 24,706,000 cubic feet per day at 1,871 pounds per square inch. 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 million cubic feet 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-per-cent interest in the Lech concession (approximately six square kilometres) and is carried by the operator Genexco Gas GmbH for the costs of the coming Kinsau-1A well up to five million euros. Consequently, MCF Energy 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-per-cent interest in the Lech East concession (approximately 100 square kilometres), which is positioned to the north and east of the Lech concession, adjacent to the Kinsau-1 discovery well, and is fully surveyed with 3-D seismic. The 3-D has been analyzed with artificial intelligence 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. The company anticipates having a permit to drill by second quarter 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 flowback of the freshwater soak to clear away the buildup of salts restricting flow from the well. The well was opened, and the flowback of the fluids began within the five-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 metres per hour. This is a very positive result in light of the flow attained through five-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 financing the flow test, and, contingent on successful final testing, it will commit an additional 5.5 million euros to construct an extraction plant to provide pipeline quality gas into the German gas grid. Gaffney Cline & Associates has independently assessed the resource best estimate for Reudnitz (P50) of 118.7 billion cubic feet of methane and 1.49 bcf of helium resource.

During drilling of the Reudnitz 2Za well, oil-stained core within the Zechstein carbonate was 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 on site 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 centre unit and a bitcoin mining unit, and, after approval, feed up to two megawatts 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 coming 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, chief executive officer and director of MCF Energy, stated: "Finally through the hard work of our staff, all our projects are active and under way. 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 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 and headquartered in Vancouver, B.C.

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