MCF Energy Ltd. ("MCF", "MCF Energy" or the "Company") is pleased to advise that operations work for the production testing is well underway at the Welchau-1 well in the ADX-AT-II licence in Upper Austria. MCF holds a 25% economic interest in the Welchau Investment Area which contains the Welchau-1 well and other emerging prospects in the Northern Calcareous Alps. ADX Energy Ltd. is the operator of the Welchau-1 well.
A well completion has been run in the well (tubing, packer and perforating system) and two intervals have been perforated underbalance using high density casing guns in the Steinalm Formation. The test intervals are 1452.5 metres to 1463.5 metres Measured Depth (MD) and 1474.5 metres to 1480 metres MD.
A well clean up flow has been conducted where gas was observed at surface followed by unassisted sustained stable rate of liquid flow of drilling mud, likely contaminated formation water and some oil traces. Well productivity observed from the unstimulated perforated interval is between 240 to 290 barrels per day of fluids. The well is being flowed during daylight hours where fluid sampling is ongoing and a down hole production logging tool (PLT) is being run in the well to diagnose flow contributions from perforations, pressures and fluid gradients.
Surface sampling and analysis of fluids recovered as well as PLT results analysis is ongoing to determine the type and flow of liquids produced into the well at this level. This analysis is required to understand fracture system flow behaviour, recovery of mud losses from drilling, source of formation water and hydrocarbon charge in the complex Steinalm Formation fracture system.
The perforated intervals are over fractured zones in the Steinalm Formation where hydrocarbon shows were observed during drilling and above where oil was recovered from a down hole modular formation dynamic tester (MDT), intervals where hydrocarbon influxes were observed while drilling as well as the interval where a formation core was recovered with fluorescence (refer Figure 1). The Figure shows permeable events intersected in the well bore with gas influxes and hydrocarbon shows encountered during drilling that correlate to these permeable events (e.g. fractures).
Welchau-1 operator ADX Energy Ltd. says, "The lack of hydrocarbons encountered as the main fluid in the well at this interval is disappointing and contrasts with hydrocarbon shows recorded while drilling the well and oil samples recovered from the MDT sampler. More analysis is required to understand what appears to be a productive, extensive, well-connected and permeable fracture system in this part of the Steinalm Formation that is now interpreted to be drawing formation water into the well."
The current forward plan is to complete the acquisition of the PLT data followed by the testing of the shallower Reifling Formation while evaluating the results to date from the Steinalm Formation test interval.
Economic Participation in the Welchau Investment Area
MCF has executed an Energy Investment Agreement with ADX to fund 50% of Welchau-1 well costs up to a well cost cap of EUR 5.1 million to earn a 25% economic interest in the Welchau Investment Area, which is part of ADX's ADX-AT-II licence in Upper Austria. The Welchau Investment Area contains the Welchau discovery well and other emerging oil and gas prospects. MCF has met its funding and earning obligations to ADX and it holds MCF's 25% economic interest in the Welchau Investment Area with MCF obliged to pay 25% of ongoing well costs.
