VANCOUVER, BC, Jan. 23,
2023 /CNW/ - MCF Energy Ltd. (TSXV: MCF) (FRA:
DC6) ("MCF Energy" or the "Company") has entered into
a non-binding Letter of Intent ("Letter of Intent" or
"LOI") to acquire all of the shares of Genexco GmbH
("Genexco"), a privately owned German corporation. The
acquisition of Genexco (the "Acquisition") will position MCF
Energy as a future leader in natural gas exploration in
Germany with 100% interests and
operatorship of its projects. It provides a significant portfolio
and expert team with deep German operating experience. The
Acquisition values Genexco at 8 million
euros to be paid with shares and cash, subject to certain
conditions and milestones.
Genexco was established in 2014 to maximise Germany's energy potential. It holds licences
for two natural gas prospects, including the Reudnitz gas
accumulation, and has a database of geological, seismic, and well
data for 10 additional project areas. Genexco has several
exploration and production licence applications underway, which
will become assets of MCF Energy after the Acquisition. A NI 51-101
report on the Reudnitz prospect is in progress and more information
will be provided on the German projects as soon as possible.
The experienced leadership team of Genexco will become the
German management team of MCF Energy, providing the Company with
valuable in-house German operating expertise.
- Peter Eckhard Oehms is the CEO
of Genexco, a geologist and project manager with 40+ years of
experience, who previously worked as a managing director at
Wintershall, Germany's largest
crude oil and natural gas producer from 1998 to 2010.
- Frank Steinich is the COO of
Genexco, a drilling and operations specialist with 35+ years of
experience, including work at ITAG, Central European Petroleum, and
Rhein Petroleum.
- Matthew Keith is an oil and gas
professional with 35+ years of experience, including work at Cairn,
Bowleven, and IPC (Lundin). He specialises in exploration,
appraisal, well-design, planning, development, and HPHT
operations.
- Jürgen Milinski is a legal professional with 35+ years of
experience in the energy sector. He was a portfolio manager at
Gazprom in the Netherlands and
previously supported Engie (Gaz de
France) operations in the German and Caspian regions.
- Jan Paul Van Driel is a former
head of economics and planning at Shell UK. He brings broad
experience in corporate strategy, joint ventures and asset
development to Genexco.
Pursuant to the LOI, MCF Energy will pay 5 million euros in shares and 3 million euros in cash to buy Genexco. The right
to trade the shares will be restricted, with the restriction ending
in three equal tranches over a period of four, eight, and twelve
months after the Acquisition. The cash and 2
million euros of shares will be released over an expected
time frame of six months as certain targets are met, including
receiving certain licences. The number of shares to be issued will
be determined on the date of signing the definitive agreement,
applying a volume weighted average trading price of MCF stock in
the ten preceding trading days, and applying a CAD/EUR exchange
rate on the date of the definitive agreement. Both parties agree to
negotiate and finalise a definitive stock purchase and sale
agreement by January 26, 2023 or
extend the date if needed.
"With the Acquisition of Genexco, we're positioning ourselves
for success in Germany and taking
a major step forward in our mission to ensure Europe's energy security through large-scale
natural gas exploration," said James
Hill, CEO and Director of MCF Energy.
"There is a window of opportunity in Germany for exploration to revitalise gas
production after decades of decline," commented Peter Eckhard Oehms, CEO of Genexco. "New
domestic gas supply addresses an urgent need to provide a local,
reliable and cost-effective source of energy for the country.
Investing in gas exploration is investing in Germany's future energy security and economic
growth, and will buy time for the important transition to
renewables. With MCF Energy, we are excited to tap into
Germany's own natural resources
and create a sustainable energy future for the country."
Welchau Option
Extension
In addition to the Genexco acquisition, MCF Energy has been
granted an extension of its option to acquire an additional 20%
economic interest in the Welchau-1 well from 21 January 2023 to 28
February 2023.
Under the terms of the Energy Investment Agreement with ADX VIE
GmbH ("ADX"), the Austrian subsidiary of ADX Energy Ltd
(ASX: ADX), MCF Energy will fund 50% of the Welchau-1 well drilling
expenditure to earn a 20% economic interest in the Welchau Area in
Austria (see MCF Energy Press
Release of November 29,
2022).
MCF Energy has the option ("Option") to elect to fund a
further 50% of the Welchau-1 well drilling cost to earn a further
20% economic interest in the Welchau Area by notice to ADX on or
before 21 January 2023. This Option election date has been
extended from 21 January 2023 to
28 February 2023 on the same terms as
previously agreed by the parties. The Welchau-1 well drilling
expenditure is budgeted at up to EUR
3,810,000 (C$ 5,540,000).
If MCF Energy exercises the Option to fund the entire Welchau-1
well cost, at the completion of its investment obligations, MCF
Energy will hold 40% economic interest and ADX will retain a 60%
economic interest in the Welchau Area.
Cautionary Statements:
The Company will not undertake work programs at its German
interests until relevant licences are granted and acquisition of
those interests is approved by the TSX Venture Exchange.
For corporate updates, please register to our mailing list at
www.MCFEnergy.com and follow us at www.Twitter.com/MCFEnergy.
Additional information on the Company and the Transaction is
available at www.sedar.com under the Company's profile.
About MCF Energy
MCF Energy believes the answer to Europe's energy security is right beneath the
surface. The Company's goal is to find new natural gas discoveries
in Europe and create wealth for
its stakeholders. MCF Energy has secured interests in two
significant natural gas exploration projects in Austria and Germany and is evaluating additional
opportunities. The Company's leaders have extensive experience in
the European energy sector and are working to develop a cleaner,
cheaper, and more secure natural gas industry as a transition to
renewable energy sources.
Cautionary Statements:
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE
EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF
THIS RELEASE.
Forward-Looking
Information
Except for the statements of historical fact, this news
release contains "forward-looking information" within the meaning
of the applicable Canadian securities legislation that is based on
expectations, estimates and projections as at the date of this news
release. The information in this news release about the completion
of the proposed transaction and financing described herein, and
other forward-looking information includes but is not limited to
information concerning the intentions, plans and future actions of
the parties to the transactions described herein and the terms of
such transaction. Factors that could cause actual results to differ
materially from those described in such forward-looking information
include, but are not limited to, risks related to the Company's
inability to perform the proposed transactions.
The forward-looking information in this news release reflects
the current expectations, assumptions and/or beliefs of the Company
based on information currently available to the Company. In
connection with the forward-looking information contained in this
news release, the Company has made assumptions about the Company's
ability to complete the planned transaction and activities. The
Company has also assumed that no significant events will occur
outside of the Company's normal course of business. Although the
Company believes that the assumptions inherent in the
forward-looking information are reasonable, forward-looking
information is not a guarantee of future performance and
accordingly undue reliance should not be put on such information
due to the inherent uncertainty therein.
Any forward-looking information speaks only as of the date on
which it is made and, except as may be required by applicable
securities laws, the Company disclaims any intent or obligation to
update any forward-looking information, whether as a result of new
information, future events or results or otherwise.
SOURCE MCF Energy Ltd.