At this moment, a fast-moving development is unfolding in Europe’s energy industry that is gaining more attention by the day.
Europe’s energy crisis, triggered by Russia’s early 2022 invasion of Ukraine, put an end to decades of reliance on cheap natural gas supplies from Russia.
In the short term, this meant significantly higher energy prices throughout Europe, with energy costs rising by 40.8% annually within the EU as of September 2022.
And while natural gas prices have pulled back a bit over the past several months, the fact remains that Europe is badly in need of a long-term solution for its natural gas needs.
After decades of dependence on cheap Russian gas, the situation within Europe has changed in a meaningful way.
– The European Union has recognized that their energy reserves and security can no longer be dependent on cheap Russian gas. This has spurred a renewed interest in developing potentially significant reserves within Europe that have been largely ignored for decades…
– The EU has now endorsed natural gas as “green” and designated it a transition fuel as we move toward a renewable energy future…
– Germany has moved away from nuclear power generation, leading to an increase in its need for natural gas…
– The ongoing war in Europe – including sabotaged pipelines connecting Russia and Germany – has dramatically increased the urgency for bringing new supplies of natural gas online within Europe.
But one company is emerging as a potential leader in the race for home-grown solutions to the energy crisis: MCF Energy (TSXV: MCF; OTC: MCFNF). This is an exciting player in Europe, with an array of assets that offer unique exposure to domestic natural gas.
The team leading MCF quickly recognized this opportunity to help strengthen Europe’s energy security…
And they bring with them extensive expertise in the European energy markets and geology, as well as an impressive track record in capital markets.
Potentially Massive European Natural Resources… Overlooked for Decades
Because most of Europe was so dependent on cheap Russian gas, several potentially massive resource opportunities within Europe have been sitting idle.
With decades of experience in the energy sector and a deep understanding of Europe’s geology, the team was uniquely qualified to search for the most promising assets to help spur European production.
The company’s two highest-priority projects have a clear path to market and are located in two of Europe’s most supportive jurisdictions.
Welchau: Up to a Trillion Cubic Feet Prospect in Austria
Located in the foothills of the Austrian Alps, the Welchau Gas Prospect contains over 140 meters of potential oil and gas-bearing thickness and carries the potential for up to a trillion cubic feet of natural gas. The property is analogous to large anticline structures discovered in Kurdistan and the Italian Apennines. The structure at Welchau is so large you can see it from space.
Another well was drilled back in the 1980s just five kilometres away from Welchau, the Molln-1 well flowed at 3.5 million per day and had 40 barrels of condensate for every 1000 cubic feet of natural gas. This well was never produced probably due to economic reasons at that time when companies were mainly looking for oil.
The existence of this well strongly suggests that there is gas and condensate in the system with a good sealing layer, helping significantly de-risk the project for the company.
The company is moving quickly on the Welchau gas prospect agreeing to fund the Welchau-1 well costs up to 50% of the cap of EUR 5.1 million to earn a 25% economic interest in the Welchau Investment Area. The Welchau gas prospect has significant gas resource potential, located in the heart of Europe at a relatively shallow drill depth and proximal to gas pipelines. Welchau is targeting the same reservoirs as the nearby Molln-1 well, which tested gas in 1989.
The company announced that its investment partner and operator, ADX Energy Ltd., had spudded the Welchau well on February 24, 2024 Drilling is expected to take 39 days.
German Assets: Genexco Acquisition Brings Licenses for Four Large-Scale Project Areas
In April 2023, MCF Energy (TSXV: MCF; OTC: MCFNF) acquired 100% of Genexco GmbH, a private German oil and gas company. This acquisition helped position the company as a future leader in natural gas exploration in Germany with 100% ownership of four licenses of German natural gas exploration and development projects with a local German-speaking staff and office.
These projects include:
Lech:
Lech is a concession in Bavaria covering 10 square kilometres with three previously drilled wells and two discoveries. One well-tested gas at a rate of over 24 MMCFD and a second, deeper well-produced oil with gas at a rate of about 180 BOPD. The third well encountered the Oil/Water contact in a separate fault block from the discovery wells.
Reentry of the property’s Kinsau #1 well is planned in Q2 of 2024. This is the gas well which tested at a maximum flow rate of over 24 MMCFD in 1983. ? With improved stimulation technology over the past 40 years, the company hopes to improve on these production rates.
The company has a 20%interest in an oil and gas exploration license held by Genexco Gas GmbH. MCF’s 20% interest in the first well is carried (i.e., does not bear the costs of drilling) up to EUR 5,000,000.
Lech East
The company also acquired Lech East, a substantial natural gas exploration license spanning approximately 100 km² in Southwest Bavaria, Germany, granted by the Bavarian State Ministry of Economic Affairs, Regional Development, and Energy for an initial term of three years.
Lech East is adjacent to the Lech license area described above.
Modern 3D seismic interpretation, aided by Machine Learning and AI, has yielded very promising prospects, offsetting the significant historical gas and oil discoveries in the Lech license. The company plans a EUR 4.6 million exploration program at Lech East, including well drilling.
Reudnitz Gas Field
Reudnitz is located approximately 70 kilometres southeast of Berlin in a rural area, with proven phases: Helium (Approx. 0.2%) and methane (14-20%) associated with high nitrogen content (>80%). The gas separation technologies and economics are well established to capture these resources.
Gaffney Cline & Associates (“GCA”) has independently assessed the best estimate (P50) of 118.7 Billion cubic feet (BCF) of Methane, and 1.06 BCF of Helium resource. Separately, GCA has 4.4 million barrels of oil in the shallower Zechstein formation. Red circles are previously drilled wells that found gas.
Erlenwiese Exploration License
The company also acquired a significant exploration concession named Erlenwiese, spanning 87 km² in Western Germany.
Erlenwiese is positioned within the Central Rhein Graben hydrocarbon system, essential for Europe’s long-term energy security. This block has two well-defined drill prospects on seismic.
MCF has acquired the latest 2D and is in the process of obtaining the available 3D seismic data. The company plans to perform its own AI and Machine-Learning analysis to further supplement and de-risk its geological and geophysical analysis of the area.
MCF Energy Ltd. is Led by a Team with a Proven Track Record of Success
One of the most intriguing aspects of the company’s story is its leadership team. They are a team of executives with a proven history of delivering value for stakeholders in a big way.
For example, back in 2004, several of the principals of MCF Energy co-founded Bankers Petroleum Ltd. to revitalize the Patos Marinza oil field in Albania. The results were nothing short of astounding. This team helped deliver production growth of over 2,000% by 2015…and they took the company from an initial $7.8 million financing to an acquisition of C$575 million, representing a premium of 98% over its latest closing price.
Then, just a few years later, they did it again. In 2008, BNK Petroleum was spun out of Bankers Petroleum to explore shale gas in Europe with two of the team members leading the way. Stakeholders in this spin-off saw the company’s share price shoot up 4,000% and hit a peak market cap of over $900 million.
BNK Petroleum established explorations in six countries and became the largest oil and gas rights holder in Europe.
Source: oilprice.com
