MCF Energy Ltd. ("MCF", "MCF Energy" or the "Company") is pleased to provide an update on Reudnitz Gas field testing and development operations and wellsite preparation for the Kinsau-1A well at Lech, Germany.
Genexco GmbH (100% owned by MCF) holds a 100% interest in the Reudnitz RZ2 gas discovery well on the Reudnitz Exploration Licence. The Reudnitz gas field testing and development operations continue with the Phase 1 testing completed and the Phase 2 plans submitted to the German mining authority, Laufzeit der Erlaubnis zur Aufsuchung (LNGR). In Phase 1 the Reudnitz RZ2 horizontal well was reworked and tested at a stable flow rate of above 1,000 m³/hr at 5 bar. Phase 2 will be additional stimulation and testing to improve production rates.
Genexco applied for an extension of the Reudnitz Exploration Licence to allow for a fuller Phase 2 testing operations following the success of the Phase 1 test. MCF is pleased to announce the approval of a nine-month extension of the Reudnitz Exploration Licence by the LNGR with the new expiration date of September 30, 2025.
The Company previously announced the farmout option negotiated with Lime Petroleum Holdings AS ("Lime") for Reudnitz. Lime has paid EUR 500,000 to Genexco to fund the workover, flow testing and evaluation of RZ2 horizontal well in the Reudnitz Exploration Licence, sufficient to cover the costs of both Phase 1 and Phase 2 of the program.
Currently Lime is reviewing the data from Phase 1 and will make the decision to exercise the option following completion of Phase 2. If Lime exercises its option to acquire up to an 80% working interest in Reudnitz, Lime will carry all costs and expenses related to the pilot development of the reservoir limited to an amount of EUR 5.5 million. If it exercises its option, Lime also has the right to assume operatorship of the Reudnitz Production Licence.The completion of Phase 2 testing will be accompanied by application by Genexco for a Production Licence covering the Exploration Licence area.
Kinsau-1A Wellsite Preparation, Lech, Germany
Construction of the well site for the Kinsau 1A re-entry well was commenced in October and continues to be on schedule with a completion date at the end of December 2024. The original Kinsau-1 well stub has been found and a new well head installed. The concrete pad has been finished and final construction continues. Installation of the remaining asphalt pad should begin in mid-December weather permitting. See Figure 1.
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 MMcf 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, CEO and Director of MCF Energy, stated, "We continue to move forward with our testing operations at the Reudnitz Gas field and are very pleased the concession has been granted a nine-month extension. Following Phase 2 testing Genexco will submit an application for a production licence. There is good progress in Lech with the construction of the Kinsau-1A drill site, which continues to be on schedule with the well expected to spud in Q1 of 2025. We will be providing more updates in the coming weeks and months as these projects proceed."