Mr. James Hill reports

AUSTRIA AND GERMANY OPERATIONS UPDATE

MCF Energy Ltd. has provided an update on production testing at the Welchau-1 well in the ADX-AT-II licence in Upper Austria and well site preparation for the Kinsau-1A well at Lech, Germany.

First test of Steinalm formation, Welchau-1, Austria

MCF Energy and its Welchau investment area partner and licence operator ADX Energy Ltd. have completed the first flow test of the Steinalm formation in the Welchau-1 discovery well, located in the ADX-AT-II licence in Upper Austria. MCF Energy holds a 25-per-cent economic interest in the Welchau investment area, which contains the Welchau-1 discovery and other emerging prospects in the Northern Calcareous Alps.

On Nov. 20, 2024, MCF Energy announced the initial results of the first test of the Steinalm formation, where gas was observed at surface, followed by an unassisted stable rate of liquid flow, including drilling mud, likely contaminated formation water and some oil traces. The observed liquid rate was between 240 and 290 barrels per day from unstimulated perforated intervals.

The Steinalm formation was tested across two perforation intervals between 1,452.5 metres and 1,463.5 metres of measured depth upper and between 1,474.5 metres and 1,480 metres of MD lower. The perforated intervals are over fractured zones, where hydrocarbon shows were observed during drilling of the well and above where oil was recovered from a downhole modular formation dynamic tester.

Further analysis of the first Steinalm formation test

A production logging tool was run in the well to determine the source of the produced mud and formation water. The PLT results indicate that most of the fluid produced during the first Steinalm test came from the bottom of lower perforations with little or no contribution from the upper interval approximately 27 metres above. Fluid entry to the wellbore appears to be at a single point at approximately 1,478 metres of MD, which was flowing preferentially to the upper perforations. The dominant flow is interpreted to be from a fracture system of an oil/water contact lower in the structure. Based on the PLT results, the first Steinalm test is not considered diagnostic of the presence or absence of hydrocarbons. A retest of the upper Steinalm perforations can be conducted at a future time after isolating the lower perforations.

Planned Reifling formation testing program

The Steinalm test completion has been retrieved, and the Steinalm upper and lower perforations have been isolated with a packer below the Reifling test interval. The plan is to move up the hole, higher into the interpreted hydrocarbon column, and undertake a test at the uppermost part of the 128-metre-thick Reifling formation.

A new test completion will be run in the well, and the Reifling will be perforated across three intervals. The three intervals to be tested contemporaneously will include a 16-metre interval from 1,324 metres to 1,340 metres of MD, a five-metre interval from 1,346 metres to 1,351 metres and a 24-metre interval from 1,358 metres to 1,382 metres of MD.

The commencement of testing of the Reifling formation is expected to occur by the end of next week.

The future testing program after the above-mentioned Reifling test will be determined based on further analysis of Steinalm and Reifling test results.

Economic participation in the Welchau investment area

MCF Energy 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. Under the energy investment agreement between MCF Energy and ADX Energy, MCF Energy financed 50 per cent of Welchau-1 well drilling costs 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. MCF Energy has met its financing and earning obligations to ADX, and it holds MCF Energy's 25-per-cent economic interest in the Welchau investment area with MCF Energy obliged to pay 25 per cent of continuing well costs.

Kinsau-1A well site preparation, Lech, Germany

Construction of the well site for the Kinsau 1A re-entry was started in October and continues to be on schedule with a rig-ready completion date at the end of December, 2024. The pad has been cleared of trees and levelled. The original Kinsau-1 well stub has been found, and a new well head has been installed. The concrete pad has been finished, and final construction continues.

Mobil drilled the original Kinsau-1 well in 1983, and made a gas and condensate discovery, which was not economic at that time, and the well was suspended and later abandoned. This well had a final stable flow rate of almost 25 million cubic feet per day of gas and condensate. The new well will be a re-entry of this well with a target within 100 metres of the productive zone.

James Hill, chief executive officer and director of MCF Energy, stated: "We continue to move forward with the testing program at Welchau-1 in Austria. I am disappointed with the unclear results of our first test in the Steinalm formation, but I remain optimistic that upcoming perforation and testing of the uphole Reifling formation of this discovery well will establish the presence of significant resources of hydrocarbons. There is good progress in Germany with the construction of the Kinsau-1A drill site, which continues to be on schedule, with the well expected to spud in [first quarter] of 2025. We will be providing more updates in the coming weeks and 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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