MCF Energy Ltd. announced that the Welchau-1 gas exploration well was spudded on the 24th of February using the RED Drilling & Services GmbH (RED) E200 drill rig in the ADX-AT-II exploration licence in Upper Austria. Operations at 6.00 am on the 26th of February, the well drilled a 17 ½ inch hole at a depth of 125 metres where 13 3/8th inch casing was run in the hole and cemented back to surface. This completes the first planned protection string of casing outlined in the approved drilling program.

The Welchau-1 gas exploration well is targeting the mid Triassic age Steinalm formation in which gas was discovered at the nearby Molln-1 well. The expected total drill depth is between 1,500 metres to 1,900 metres measured depth. The main target depth is between 1,100 metres and 1,800 metres measured depth.

The success case drilling and evaluation program is anticipated to take approximately 39 days. The Welchau-1 exploration project has received extensive exposure in both television and print media in Austria due to its location proximal to a nature reserve. The project's environmental clearance was received following an extensive review process which weighed up the touristic and environmental impact of the project versus the local community and national benefits of a potential gas discovery at Welchau-1 which is located in the municipality of Molln.

Limited resistance to the project has been received from some special interest groups. Despite a vocal minority there has been overwhelming support for the project from the local community. The Welchau exploration project has been determined by the relevant authorities to be in the public interest due to its potential to reduce dependency on Russian natural gas imports, increase gas supply security, diversify gas supply, reduce reliance on imports and fulfill the Austrian federal mandate to explore and produce hydrocarbons.

MCF and the licence operator ADX Energy Ltd. are taking the necessary planning and operational measures to ensure natural gas exploration and if successful production can coexist with environmental protection and local tourism. To achieve the high standards required ADX and MCF have ensured the required safety, noise and environmental emission standards are met by contractors and service providers. ADX and MCF have endeavoured to maximise local content where there is an excellent past record of safety, environmental protection and project execution.