MCF Energy starts Kinsau drilling

Executive Summary

• MCF Energy’s drilling rig has arrived at the Kinsau-1A well site in Lech, Germany, with drilling operations anticipated to begin in the coming days and total depth expected in approximately 30 days.
• Phase 2 testing updates for the Reudnitz Z2a well indicate successful pressure increases and stimulation attempts, with preliminary results currently under evaluation by Genexco and partner Lime Petroleum.
• Lime Petroleum retains the option to acquire an 80% working interest in the Reudnitz licence, contingent on testing results, with a potential cost carry of €5.5 million for pilot development.

Key Details

• Kinsau-1A Well Status:
  • RED drilling Rig 202 is on location in Lech, Germany, and rigging up.
  • Drilling is expected to begin in the coming days.
  • Total depth is projected to be reached in approximately 30 days.
  • Post-drilling testing will be conducted with a workover rig; results are expected later in Q3 2025.
  • Discussions are ongoing with a local pipeline company regarding future pipeline construction and offtake.
• Kinsau-1 Historical Context:
  • Kinsau-1A is a re-entry and redrill of the original Kinsau-1 discovery well drilled by Mobil in 1983.
  • Original 1983 tests showed gas and condensate indications in the Jurassic Purbeck formation at 3,179 metres.
  • Historical variable rate test results (July 28-29, 1983) included rates of 7,712 MCFD, 14,832 MCFD, and 24,706 MCFD.
  • Total historical test recovery was 45.9 MMCF of gas and 1,510 barrels of condensate.
  • Genexco GmbH (100% subsidiary of MCF Energy) holds a 20% partner interest in the Kinsau gas project.
  • The Bavaria regional Mining Authority has approved the drill site.
• Reudnitz Z2a Phase 2 Testing:
  • Genexco holds a 100% interest in the Reudnitz exploration licence.
  • The Z2A well is horizontal within the middle Permian Rotliegend sandstone reservoir.
  • 2021 test data: Produced over 1,000 cubic metres per hour at 0.4 bar flowing pressure (13,500 cubic m over seven hours).
  • 2024 Phase 1 test data: Stable gas production at over 1,000 cubic m/hr at over four bars of flowing pressure.
  • Phase 2 Stimulation: Attempted to squeeze 20 cubic m of 20% HCl and 14 cubic m of BSD-40N scale dissolver; full volume of HCl was not successfully squeezed into the formation.
  • Current Action: Genexco is pursuing a longer pressure build-up with bottom hole gauge recordings for pressure transient analysis.
  • Results are preliminary and not indicative of long-term performance.
• Lime Petroleum Option Terms:
  • Lime Petroleum has the right to acquire an 80% participating interest in the Reudnitz licence following testing and evaluation.
  • If exercised, Lime will carry all costs/expenses for pilot development up to €5.5 million.
  • Lime has the right to assume operatorship of the Reudnitz production licence.
  • Genexco has secured a nine-month extension of the Reudnitz exploration licence to allow time for Phase 2 testing and production licence application.

Notable Quotes

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