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London – March 13, 2024 – The California geologist who helped develop one of Europe’s biggest heavy oilfields over two decades ago is back, and this time, he has two things in mind: European energy security and natural gas, the only viable “bridge” fuel for an energy transition.  Companies mentioned in this release include: TotalEnergies (NYSE:TTE), Eni (NYSE:E), Equinor (NYSE:EQNR), BP plc (NYSE:BP), Shell plc (NYSE:SHEL).

“Not only has Europe been dependent on Russian gas for decades, but that dependence has essentially plundered the continent’s ability to produce domestically, onshore,” California geologist James Hill, who is now the CEO of MCF Energy (MCF.V; MCFNF.QX), says.

“What that means is that Europe now has to import high-priced LNG from the U.S., Russia, Qatar and Australia to make up for the shortfall,” he adds, “when previous discoveries are just waiting to be reopened in places like Germany and Austria.”

Previous Discoveries, Reading and Waiting

With large-scale exploration projects in Germany and Austria and a recent 100% acquisition of Genexco GmbH Germany, MCF Energy just started drilling last month in Austria and will then be  moving the rig straight to Germany in April.

In Austria, MCF recently moved the rig on location began drilling the Welchau prospect and in their latest press release (11 March 2024) announced an active petroleum system was discovered and that total depth will be reached before the end of the month.  Welchau prospect is analogous to large anticline structures discovered in the Kurdistan Region of Iraq and the Italian Apennines, and it’s also adjacent to an up-dip from a discovery that intersected at a gas column of at least 400 meters, testing condensate rich  pipeline quality gas.

All elements are in place for a significant discovery, with a best-estimate technical prospective resource of 584  billion cubic feet of gas with 10.1 MBO, proximity to the national gas pipeline system (~18km), and a nearby historic gas discovery. Welchau is targeting the same reservoirs as the nearby Molln-1 well, which tested gas in 1989.

Next up is drilling in Germany’s Lech prospects in April, which MCF considers its highest-impact asset.

Lech (10 square kilometers) and East Lech (100 square kilometers) concessions hold natural resources riches that have already seen two discoveries and three previous wells drilled.

In April, MCF will re-enter Mobil’s former Kinsau #1 well at  Lech, adapting new drilling technology and eventually horizontal wells to stimulate the hydrocarbons that are already known to exist. Mobil established production rates of over 24 MMCF per day of natural gas with associated condensate from the Kinsau #1 in the ‘80s. Mobil was exploring for oil so never developed the gas discovery.

This well, being a re-entry of a proven, previously drilled hole could translate into quick cash flow for MCF Energy (MCF.V; MCFNF.QX), and one hit could flare out into multiple development zones for each well.

“From a risk perspective this is as low a risk as you can get,” Hill said, “you’re not going to miss this one because we are re-entering a well drilled in the ‘80s which produced gas and condensate at currently very economic rates. Plus we’ve got a second well with an oil zone that, back in ’83, produced almost 200 barrels a day from a vertical well. What happens if we put a horizontal well into that thing? Today technology has improved drastically in the last 40 years, we hope to do much better than what Mobil did in stimulating the production from these wells.   We know where the hydrocarbons are and AI and machine learning has confirmed it giving us a template for many more future wells at Lech East.”

According to Hill, within the first fault block at Lech, from the huge flow rates of these wells,  there is likely to be significant gas reserves with associated condensate. Moreover, infrastructure is already in place, with a pipeline connection less than two kilometers away which means the potential for quick cash flow.

The Undeniable Bridge Fuel

An overwhelming $7 trillion is still necessary to develop gas fields, repair existing facilities and build new infrastructure to ensure enough natural gas for the world through 2050, according to a new report from the Institute of Energy Economics in Japan (IEEJ). 

Crucially, that $7-trillion investment outlook is making the significant assumption that the world will see a 56% reduction in emissions by 2050.

This is MCF Energy’s investment thesis, and Europe is a prime example of the disastrous outcome of a lack of planning for the domestic production of natural gas.

At the helm of MCF Energy (MCF.V; MCFNF.QX), Mr. Hill is hoping to change things up in both Germany and Austria as the company readies the drill bit for February, 2024.

And the emphasis isn’t just on exploration, he says, but on development of these new reserves using modern 3D seismic interpretation and AI, which he hopes will not only reopen historic European natural gas discoveries but expand them into exciting prospects for true domestic energy security.

He’s been here before, in Europe. As former VP of Exploration for BNK Petroleum and Bankers Petroleum, as well as the President of Division of Professional Affairs for the American Association of Petroleum Geologists (AAPG), Hill contributed to  the development of the heaviest oil field in Europe, in Albania, where they expanded production growth by 2000%.

At the time, Europe was not experiencing an energy crisis, satisfied as it was with its dependence on Russian oil and gas.

Today is a very different story, and MCF Energy is following this investment thesis to its end game, scooping up proven and previously producing assets in Germany and Austria, where the hunger for domestic natural gas is clear and present, driven by a desperate need for energy security.

Europe’s Oil Giants Are Making Moves

TotalEnergies SE (NYSE:TTE) adeptly balances its portfolio between natural gas and oil, reflecting a strategic foresight geared towards leading Europe’s gas-driven energy future. The company’s extensive investment in natural gas infrastructure, including a vast network of pipelines and advanced LNG facilities across the continent, underscores its ambition to cement a central role in shaping Europe’s energy trajectory.

A continuous flow of investments into cleaner drilling technologies and refining optimizations reflects TotalEnergies’ dedication to sustainability and environmental stewardship, ensuring its oil operations not only meet but exceed global environmental standards.

Eni SpA (NYSE:E) stands out for its dynamic response to the evolving energy landscape, with a pronounced shift towards natural gas to meet Europe’s growing demand for cleaner energy solutions. The company’s strategic endeavors, particularly in the Mediterranean and North African regions, highlight Eni’s capacity to leverage its geographical and operational advantages to spearhead Europe’s transition to a more sustainable energy future.

Eni’s exploration and refining activities, while global in scope, are conducted with a keen eye on environmental sustainability, reflecting the company’s holistic approach to energy production.

Equinor ASA (NYSE:EQNR), Europe’s second-largest natural gas supplier, has played a significant role in shaping Europe’s oil and gas sector while pivoting towards renewable energies, including hydrogen and offshore wind projects. This strategic diversification showcases Equinor’s adaptability and commitment to contributing to a sustainable energy future.

Equinor’s investment in renewable energy sources, notably offshore wind, extends its commitment beyond traditional hydrocarbons, aligning with Europe’s ambitious green energy targets.

BP plc (NYSE:BP) has shaped Europe’s energy landscape for decades. In response to the shifting dynamics of global energy consumption and the European Union’s ambitious climate goals, BP has strategically expanded its focus towards natural gas and renewable energy sources.

This shift is evident in their substantial investments in natural gas infrastructure, including pipelines and state-of-the-art liquefied natural gas (LNG) terminals, aimed at catering to Europe’s growing appetite for cleaner fuels. BP’s efforts to diversify its energy portfolio reflect a broader industry trend towards decarbonization and energy transition.

Shell plc (NYSE:SHEL) has strategically positioned itself within Europe’s evolving energy sector by significantly expanding its natural gas and LNG operations. This expansion aligns with the continent’s shift towards cleaner energy sources, reflecting Shell’s commitment to playing a pivotal role in Europe’s energy transition.

Oil remains a significant component of Shell’s diversified energy portfolio, with extensive exploration, production, and refining operations spread across various geographies. Shell’s continuous efforts to optimize these operations incorporate technological innovations and stringent environmental considerations.

By. Tom Kool

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Forward-Looking Statements

This publication contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this publication include that large oil and gas companies will continue to focus on offshore natural gas resources; that domestic onshore natural gas assets in Europe will provide a more affordable energy source than offshore resources; that demand for natural gas will continue to increase in Europe and Germany; that Russia will not supply the majority of natural gas in Germany and Europe; that natural gas will continue to be utilized as a main energy source in Germany and other European countries and demand for natural gas, and in particular domestic natural gas, will continue and increase in the future; that MCF Energy Ltd. (the “Company”) can replicate the previous success of its key investors and management in developing and selling valuable energy assets; that the natural gas projects of the Company will be successfully tested and developed; that the Company can develop and supply a safe, domestic source of energy to European countries; that natural gas will be reclassified as sustainable energy which will support the development of the Company’s assets; that imports of liquified natural gas will not be sustainable for Europe and that European countries will need to rely on domestic sources of natural gas; that the Company expects to obtain significant attention due to its upcoming drilling plans combined with Europe desperate for domestic natural gas supply; that the upcoming drilling on the Company’s projects will be successful; that the Company’s projects will contain commercial amounts of natural gas; that the Company can finance ongoing operations and development; that the Company can achieve its business plans and objectives as anticipated. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information.  Risks that could change or prevent these statements from coming to fruition include that large oil and gas companies will start focusing on the development of domestic natural gas resources; that the natural gas resources of competitors will be more successful or obtain a greater share of market supply; that offshore liquified natural gas assets will be favored over domestic resources for various reasons; that alternative technologies will replace natural gas as a mainstream energy source in Europe and elsewhere; that demand for natural gas will not continue to increase as expected for various reasons, including climate change and emerging technologies; that political changes will result in Russia or other countries providing natural gas supplies in future; that the Company may fail to replicate the previous success of its key investors and management in developing and selling valuable energy assets; that the natural gas projects of the Company may fail to be successfully tested and developed; that the Company’s projects may not contain commercial amounts of natural gas; that the Company may be unable to develop and supply a safe, domestic source of energy to European countries; that natural gas may not be reclassified as sustainable energy or may be replaced by other energy sources; that the upcoming drilling on the Company’s projects may be unsuccessful or may be less positive than expected; that the Company’s projects may not contain commercial amounts of natural gas; that the Company may be unable to finance its ongoing operations and development; that the Company can achieve its business plans and objectives as anticipated; that the Company may be unable to finance its ongoing operations and development; that the business of the Company may be unsuccessful for various reasons. The forward-looking information contained herein is given as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.

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