MCF Energy Ltd. is pleased to announce the receipt of a final permit from the Southern Bavaria Mining Authority for exploratory drilling of the Kinsau 1A well, located in the Lech Concession. Drilling and completion are scheduled to start in September 2024.
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 (MMCF) of gas and condensate per day. Mobil drilled the Kinsau #1 well to a depth of 3940 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 28th to 29th, with three flowing rates reported: 7,712 thousand cubic feet per day (MCFD) at 2,973 psi, 14,832 MCFD at 2,785 psi, and 24,706 MCFD at 1,871 psi. 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 MMCF 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.
The Kinsau 1A well will be drilled using the same RED Drilling rig that accomplished the successful drilling of the Welchau #1 well in Austria earlier this year. Well site construction is already underway with a groundwater monitoring well already drilled. The long-lead items for the re-entry have been purchased. Natural gas has been produced in Bavaria since 1954, and the expertise of the authorities and experts in the gas industry is correspondingly high.
Through its German subsidiary Genexco GmbH, MCF Energy has a 20% interest in the Lech Concession (approximately 6 km2) and is carried by the operator Genexco Gas GmbH for the costs of the upcoming Kinsau-1A well up to 5 million euros. Consequently, MCF 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.
Lech East
MCF Energy holds a 100% interest in the Lech East Concession (approximately 100 km2), which is positioned to the north and east of the Lech Concession and the Kinsau discovery well and is fully surveyed with 3D seismic.
James Hill, CEO and Director of MCF Energy, stated, "This permit is more than just promising; it's what we've been eagerly anticipating for the past year. We're in an advantageous position, with full partner funding for the drilling and testing of the Kinsau 1A well, along with many promising follow-up sites at both Lech and Lech East. We are thrilled and expect to resume drilling in September. I am grateful for the continued support of our shareholders while the company strives to enhance value and meet our operational objectives."