FN Media Group Presents Oilprice.com Market Commentary
London – February 29, 2024 – Supergiants like Exxon are focused on big offshore venues like Guyana and Namibia, leaving behind prime onshore natural gas assets in Europe – a region that is now desperate for affordable domestic resources that Russian Gazprom doesn’t control. Companies mentioned in this release include: Chevron (NYSE:CVX), ExxonMobil (NYSE:XOM), ConocoPhillips (NYSE:COP), Talos Energy (NYSE:TALO), Cheniere Energy (NYSE:LNG).
Germany, for example, is scrambling for gas, even if this winter’s storage is nearly full. And unfortunately, it traded one form of dependence for another. In fact, at the height of the crisis, the European Union was paying some 40% more for U.S. LNG imports than it was for Russian piped gas.
But there is a far cheaper domestic alternative, and it’s found in assets abandoned by the supergiants off chasing bigger oil and gas dreams offshore. What’s too small for Exxon and others, could be of huge potential value to a company like MCF Energy (MCF.V; MCFNF.PK).
The Top People in the Industry for Europe’s Energy Reset
The company is no stranger to Europe’s energy industry. It was co-founded by oil and gas investor Ford Nicholson, who has a track record of developing billion-dollar international assets and offloading them to giants such as Exxon for top dollar. In total, Ford has exited around $4.5 billion in energy assets in Europe and Asia.
In the 1990s, after the fall of the Soviet Union, Nicholson launched an energy company in Kazakhstan that was sold in 2006 for approximately $1.6 billion. In 2004, he co-founded a company that developed Europe’s largest heavy oilfield, in Albania (Bankers Petroleum Albania, Ltd) worth about $2.25 billion by 2011.
And he’s looking to do it again today with MCF Energy (MCF.V; MCFNF.PK) in today’s Europe, which is in the middle of an energy reset worth trillions of dollars–and the biggest near-term prize is natural gas.
Key Assets Where Europe Needs It Most
The first drill, which will launch next week, is in Austria, at MCF Energy’s Welchau prospect near the Austrian Alps. This prospect is analogous to large anticline structures discovered in the Kurdistan Region of Iraq and the Italian Apennines.
Welchau is adjacent to an up-dip from a discovery that intersected at a gas column of at least 400 meters, testing condensate rich for pipeline-quality gas. A national gas pipeline network is only 18 kilometers away, making for a short, cheap tie-in option for getting product to domestic markets. MCF will earn a 25% interest for exploration drill costs estimated and capped at 2.55 million euros.
MCF Energy (MCF.V; MCFNF.PK) also has licenses secured in Germany for six large-scale project areas in the country, with the Company stating that drill testing set to launch immediately after the Austrian drill is aimed to be completed.
These key projects are the result of MCF Energy’s strategic 100% acquisition of Germany’s Genexco GmbH. Genexco was established in 2014 by some of Europe’s largest energy producer insiders. It carefully assembled a portfolio of assets when few others were paying attention.
The Genexco acquisition gave MCF Energy four key assets that include previously drilled wells and two discoveries, including Reudnitz, a proven, large-scale natural gas development that also contains an oil exploration target. They also acquired the Lech concession, a 10-square-kilometer play with three previously drilled wells and two discoveries; Lech East, which directly offsets the discoveries on the Lech block is much larger, around 100 square kilometers; and the Erlenwiese concession in the Rhein Graben which covers about 80 square kilometers.
Some 70 km southeast of Berlin, it was initially discovered in 1964 with multi-zone hydrocarbon potential and proven phases of Helium, methane and like most fields in northern Germany high nitrogen content .
According to the company, pilot test production will start this year. After testing, development is planned using cryogenic technology for helium and nitrogen sequestration. The Company announced an independent assessment best estimate (P50) at 118.7 billion cubic feet (BCF) of methane, 1.06 BCF of helium and 4.4 million barrels of oil.
The Kinsau #1 well, originally drilled by Mobil in the ‘80s, encountered a primary gas reservoir with associated condensate. In a recent interview with Oilprice.com, James Hill said they abandoned the well because “back then, it probably wasn’t economic.”
MCF (MCF.V; MCFNF.PK) has spent a significant amount of time analyzing the cores from these wells, and Hill isn’t just eyeing recoverable gas with associated condensates; he’s also eyeing an oil zone, noting that in the ‘80s, using only a vertical well, as the technology of the day afforded, this well produced almost 200 bpd. MCF is studying going back in and recreating this with a horizontal well to stimulate a zone that they know contains hydrocarbons already.
Is This Western Europe’s Last Chance at Domestic Natural Gas?
Right now, Western Europe is importing expensive gas from all over the world. It’s even gone back to dirty coal in its quest to shed Russia’s weaponized energy.
Europe’s under-investment in natural gas has been laid bare, and now we are in the middle of a historical energy reset, with trillions of dollars up for grabs. Natural gas is being reclassified as green and sustainable, which is a boon for the development of MCF Energy’s assets.
With drilling planned in multiple projects this year and next, and Europe desperate for domestic natural gas, MCF (MCF.V; MCFNF.PK) is expecting to gain a fair amount of attention.
“Once the hydrocarbons start lighting up all over the 3D seismic in Germany, in the middle of winter, it’s going to get people’s attention in a big way,” says Hill.
Big Players are Eyeing Energy Market Opportunities As Well
One of the world’s largest energy corporations, Chevron’s (NYSE:CVX) operations span the globe. In the realm of natural gas, Chevron has been assertive, investing heavily in exploration, production, and distribution.
Concurrently, oil is the bedrock of Chevron’s operations. With vast reserves and a strong downstream presence, Chevron’s commitment to efficient and sustainable oil production remains unwavering.
ExxonMobil’s (NYSE:XOM) influence on the global energy stage is undeniable. Their strategic moves in the natural gas sector, especially with their investments in LNG projects and shale gas explorations, position them as a leader in this segment.
Oil continues to drive a significant portion of their revenues. Their global reach, combined with consistent efforts towards enhancing extraction efficiencies and refining capabilities, underscores their commitment to remain a top-tier oil company.
ConocoPhillips (NYSE:COP) has shown a balanced approach to energy. Their investments in natural gas, especially in North America and Asia, mirror the world’s shifting energy consumption patterns. Their LNG operations and investments in shale reserves particularly stand out.
At the same time, oil exploration and production continue to be major pillars for ConocoPhillips. Their operations span multiple continents, and the emphasis on sustainable production methods ensures they remain leaders in the sector.
Talos Energy (NYSE:TALO) is a notable player in the exploration and production sector, focusing on oil and natural gas in the United States Gulf of Mexico and offshore Mexico. As a relatively young company, Talos Energy has quickly established itself through strategic acquisitions and a strong focus on exploration.
Talos Energy’s commitment to sustainability and reducing environmental impact is evident in their operations and strategic partnerships. They are involved in carbon capture initiatives and continuously seek ways to leverage technology to minimize their ecological footprint.
Cheniere Energy (NYSE:LNG) stands as a pioneer in the LNG sector in the United States, operating one of the first LNG export facilities in the country. Cheniere’s business model spans the LNG value chain, from production to export, enabling it to capitalize on the growing demand for natgas. Their Sabine Pass and Corpus Christi facilities are at the heart of their operations, showcasing their capacity to respond to the increasing demand.
Cheniere’s commitment to sustainability is reflected in its efforts to improve the environmental performance of its operations and its product’s role in enabling a transition to a lower-carbon future.
By. Michael Kern
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Forward-Looking Statements
This publication contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this publication include that large oil and gas companies will continue to focus on offshore natural gas resources; that domestic onshore natural gas assets in Europe will provide a more affordable energy source than offshore resources; that demand for natural gas will continue to increase in Europe and Germany; that Russia will not supply the majority of natural gas in Germany and Europe; that natural gas will continue to be utilized as a main energy source in Germany and other European countries and demand for natural gas, and in particular domestic natural gas, will continue and increase in the future; that MCF Energy Ltd. (the “Company”) can replicate the previous success of its key investors and management in developing and selling valuable energy assets; that the natural gas projects of the Company will be successfully tested and developed; that the Company can develop and supply a safe, domestic source of energy to European countries; that natural gas will be reclassified as sustainable energy which will support the development of the Company’s assets; that imports of liquified natural gas will not be sustainable for Europe and that European countries will need to rely on domestic sources of natural gas; that the Company expects to obtain significant attention due to its upcoming drilling plans combined with Europe desperate for domestic natural gas supply; that the upcoming drilling on the Company’s projects will be successful; that the Company’s projects will contain commercial amounts of natural gas; that the Company can finance ongoing operations and development; that the Company can achieve its business plans and objectives as anticipated. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that large oil and gas companies will start focusing on the development of domestic natural gas resources; that the natural gas resources of competitors will be more successful or obtain a greater share of market supply; that offshore liquified natural gas assets will be favored over domestic resources for various reasons; that alternative technologies will replace natural gas as a mainstream energy source in Europe and elsewhere; that demand for natural gas will not continue to increase as expected for various reasons, including climate change and emerging technologies; that political changes will result in Russia or other countries providing natural gas supplies in future; that the Company may fail to replicate the previous success of its key investors and management in developing and selling valuable energy assets; that the natural gas projects of the Company may fail to be successfully tested and developed; that the Company’s projects may not contain commercial amounts of natural gas; that the Company may be unable to develop and supply a safe, domestic source of energy to European countries; that natural gas may not be reclassified as sustainable energy or may be replaced by other energy sources; that the upcoming drilling on the Company’s projects may be unsuccessful or may be less positive than expected; that the Company’s projects may not contain commercial amounts of natural gas; that the Company may be unable to finance its ongoing operations and development; that the Company can achieve its business plans and objectives as anticipated; that the Company may be unable to finance its ongoing operations and development; that the business of the Company may be unsuccessful for various reasons. The forward-looking information contained herein is given as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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