Mr. Jim Hill reports

OPERATIONS UPDATE - WELCHAU-1 PRODUCTION TESTING PROGRESS REPORT

MCF Energy Ltd.'s operations work for production testing is well under way at the Welchau-1 well in the ADX-AT-II licence in Upper Austria. MCF holds a 25-per-cent economic interest in the Welchau investment area, which contains the Welchau-1 well and other emerging prospects in the Northern Calcareous Alps. ADX Energy Ltd. is the operator of the Welchau-1 well.

A well completion has been run in the well (tubing, packer and perforating system), and two intervals have been perforated underbalance using high-density casing guns in the Steinalm formation. The test intervals are 1,452.5-metre-to-1,463.5-metre measured depth and 1,474.5 metre-to-1,480-metre MD.

A well cleanup flow has been conducted where gas was observed at surface followed by an unassisted sustained stable rate of liquid flow of drilling mud, likely contaminated formation water and some oil traces. Well productivity observed from the unstimulated perforated interval is between 240 and 290 barrels per day of fluids. The well is being flowed during daylight hours where fluid sampling is continuing, and a downhole production logging tool is being run in the well to diagnose flow contributions from perforations, pressures and fluid gradients.

Surface sampling and analysis of fluids recovered, as well as PLT results analysis, are continuing to determine the type and flow of liquids produced into the well at this level. This analysis is required to understand fracture system flow behaviour, recovery of mud losses from drilling, source of formation water and hydrocarbon charge in the complex Steinalm formation fracture system.

The perforated intervals are over fractured zones in the Steinalm formation where hydrocarbon shows were observed during drilling and above where oil was recovered from a downhole modular formation dynamic tester and intervals where hydrocarbon influxes were observed while drilling, as well as the interval where a formation core was recovered with fluorescence.

Welchau-1 operator ADX Energy said: "The lack of hydrocarbons encountered as the main fluid in the well at this interval is disappointing and contrasts with hydrocarbon shows recorded while drilling the well and oil samples recovered from the MDT sampler. More analysis is required to understand what appears to be a productive, extensive, well-connected and permeable fracture system in this part of the Steinalm formation that is now interpreted to be drawing formation water into the well."

The current forward plan is to complete the acquisition of the PLT data followed by the testing of the shallower Reifling formation while evaluating the results to date from the Steinalm formation test interval.

Economic participation in the Welchau investment area

MCF has executed an energy investment agreement with ADX to finance 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, which is part of ADX's ADX-AT-II licence in Upper Austria. The Welchau investment area contains the Welchau discovery well and other emerging oil and gas prospects. MCF has met its financing and earning obligations to ADX, and it holds MCF's 25-per-cent economic interest in the Welchau investment area with MCF obliged to pay 25 per cent of continuing well costs.

About MCF Energy Ltd.

MCF 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 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 is a publicly traded company and headquartered in Vancouver, B.C.

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