MCF Energy Ltd. announced that it has increased its economic interest participation in the upcoming Welchau-1 well in Austria to 25% from 20%. In early 2023, MCF Energy entered into an Energy Investment Agreement (EIA) with ADX Energy Ltd. to finance half of the expenses for the Welchau-1 exploration well, initially capped at EUR 3.8 million, thereby securing a 20% economic stake in the Welchau Investment Area. ADX Energy as the Operator of the Welchau-1 well has adhered strictly to stakeholder consultation, environmental protocols and essential pre-drilling measures, such as permits and comprehensive geotechnical surveys, evidencing ADX and MCF's dedication to Environmental, Social, and Governance (ESG) principles.

These actions and increases in drilling costs have resulted in a total investment increase for the well to EUR 5.1 million. MCF and ADX have amended the EIA to outline MCF's commitment to financing 50% of the Welchau- 1 well expenses, up to EUR 5.1 million, in exchange for increasing MCF's economic interest in the Welchau Investment Area to 25% from 20%. Upon reaching the revised well cost cap, MCF and ADX will cover their respective shares of 25% and 75% for the expenses related to the Welchau Investment Area.

The Operator has confirmed that drilling will begin once the well site construction is finished by late January. This clears the way for the RED Drilling & Services GmbH (RED) E-202 rig to move to the Welchau-1 drilling location. Construction at the Welchau-1 gas well site began on December 15, 2023, after receiving environmental clearance from the Department of Nature Protection of the State Government of Upper Austria.

This clearance was the final regulatory step needed to start drilling on the Welchau prospect. Preceding this, the Mining Authority on behalf of the Ministry of Finance of the Republic of Austria issued the drilling permit. Drilling operations at Welchau are slated to start in late January 2024, once the well site is fully constructed and the RED Drilling & Services GmbH E-202 drilling rig is mobilized.

Emphasizing safety, environmental protection, and project execution, the Operator has maximized local involvement, leveraging their strong track record in these areas. The anticipated duration of the drilling is approximately 39 days.