• Fri. Apr 19th, 2024
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MCF Energy: A Small Stock That Could Be a Big Winner in Europe’s Energy Crisis


Today, we are highlighting a small cap stock that could be a big winner in Europe’s energy crisis. The company is led by a group of energy legends with a track record of billion dollar successes. They are assembling a portfolio of large-scale natural gas exploration opportunities in Europe’s best jurisdictions. This is an under-the-radar company that has just raised significant capital and listed in Canada and Germany. We are constructive on this company’s prospects and want to bring it to our readers’ attention as soon as possible.

The tragic and ongoing war in Ukraine has exposed a severe vulnerability in Europe’s energy market. The continent has scrambled to provide alternative sources of Russian gas, urged rationing, and has even increased its mining of coal to address shortfalls.

A longer term energy solution for Europe is needed to bridge the gap to renewable sources. The company, MCF Energy Ltd. (TSXV: MCF) is a first-mover in acquiring large-scale natural gas assets in the E.U with significant interests already in Austria as well as Germany and strong leadership. The company is well positioned to benefit from Europe’s high gas prices and the energy transition plan supported by the E.U. parliament.

Natural gas produced in Europe had a 30% lower carbon footprint than imported gas and drives economic activity throughout the region according to the company. We anticipate a significant increase in gas exploration in Europe in the next decade as the region aims for energy independence, and are constructive on MCF Energy’s position to capitalize on this opportunity.

Completes the Acquisition of Two Major Assets

MCF Energy, focused on large-scale hydrocarbon exploration in Europe, has made positive progress so far. We believe it is in the early stages of a significant growth cycle and we would like to provide more information on the assets it owns.

Earlier this year, the company acquired hydrocarbon interests in Austria and Germany. The company plans to test drill the large-scale Welchau prospect in Austria before September 2023. Welchau could be as large as 1 trillion cubic feet of gas according to a recent reserve report1 and is 18km from pipelines. This could make a significant contribution to Europe’s energy security and we will be monitoring events at Welchau closely moving forward. Additionally, MCF Energy is finalizing its proposed work plan at the Reudnitz prospect in Germany, which is a proven gas accumulation established by three previously drilled wells and includes multi-zone hydrocarbon potential. Reudnitz and other projects under application in Germany are also worth keeping an eye on.

The Welchau gas prospect is located in the foothills of the Austrian Alps and is analogous to the large anticline structures that were discovered in Kurdistan and in the Italian Apennines. Going forward, MCF Energy will evaluate all of the potentially productive zones within the gas prospect and we are bullish on the data that has already been provided.

The main target at Welchau as well as at the productive Molln 1 well is the Triassic Steinalm Formation, a fractured carbonate reservoir trapped in a trending ramp anticline with more than a 20 km lateral extent and a 100 km2 maximum closure area. The structure is defined by extensive outcrop mapping and balanced 2D cross sections along a profile parallel to the North-South shortening direction.

In late January, MCF Energy announced a non-binding Letter of Intent to acquire 100% of Genexco GmbH. The acquisition will position MCF Energy as a future leader in natural gas exploration in Germany with 100% interests and operatorship of its projects. The transaction provides a significant portfolio and expert team with deep German operating experience.

From the strength of the Genexco team to the portfolio of assets that are associated with the transaction, we are of the opinion that MCF Energy has the team and the database that is needed to help solve the energy crisis across Germany and Europe. By having a first mover advantage in strategic markets like Germany, the company is well positioned for growth and we believe the market underappreciates this aspect of the story.

In 2014, Genexco was established to maximize Germany’s energy potential. The company holds licenses 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 license applications underway, which will become assets of MCF Energy after the acquisition.

The German market is Europe’s largest importer of gas. The region is prospective for new gas discoveries and according to the company has been underexplored for the past fifty years. MCF Energy is working to finalize its necessary license applications in advance of undertaking work programs in the country.

Raises Capital to Advance the Business

MCF Energy recently raised $8.5 million through private financing, which will help it explore large-scale natural gas prospects in Western Europe

The management team is highly focused on advancing the two key projects and is executing on a multi-national growth strategy. MCF Energy plans to use the capital from the private placement for drilling of the Welchau well, to advance its projects in Germany, and for general working capital.

When it comes to energy operators, we look for businesses that have enough resources to capitalize on the projects on hand. We believe that MCF Energy’s ability to raise capital in a very challenging market is a testament to the strength of the management team and the growth potential of the business.

Led by a Management Team with a Proven Track Record

When we analyze any company, one of the first components we investigate is the management team. We are of the opinion that MCF Energy is led by a management team with a proven track record in the energy sector and find this to be the most important aspect of the opportunity.  By having a strong leadership team, MCF Energy can execute on a calculated growth strategy and we are bullish on how the story has advanced so far.

The founders and leaders of MCF Energy have a strong background in European energy and capital markets. They successfully increased production at Europe’s largest heavy oil field by 4000% with Bankers Petroleum, and managed Europe’s largest oil and gas exploration in six countries with BNK Petroleum.

Co-Founder and Strategic Advisor Ford Nicholson has a history of successful exits in the energy sector. He was most recently Deputy Chairman of Interoil when it was acquired by ExxonMobil for $2.6 billion. Nicholson co-founded Bankers Petroleum, which grew production at Europe’s largest oilfield by over 40X and was acquired for CDN $575 million. He also co-founded Nations Energy which was acquired for US $1.6 billion. Based on Nicholson’s successful background, we have confidence in the direction the business is heading and believe this aspect of the story is underappreciated by the market.

MCF Energy CEO James Hill is a professional geologist with more than 40 years of technical and executive level experience in petroleum and natural gas exploration and development. Previously, he was the Vice President of Exploration for BNK Petroleum and Bankers Petroleum and we are favorable on the experience he brings to the team.

MCF Energy Executive Chairman Jay Park KC is a renowned energy lawyer and entrepreneur with more than four decades of experience including advising governments and the world’s largest energy companies on asset acquisitions and divestitures.  Mr. Park is an essential member of the team and we expect him to play a key role in the advancement of the business.

Another important aspect of the leadership team is related to the type of investors that are associated with the business. MCF Energy also has a notable cornerstone investor, Frank Giustra, founder and former CEO of Lionsgate Entertainment and co-founder of Wheaton River Minerals (now Newmont Goldcorp) and we are favorable on his involvement with the firm.

During the last year, MCF Energy made strategic appointments to its advisory board and we are favorable on the diversity of the leadership team. The company has appointed several high-profile executives to the board of directors, including retired four star General Wes Clark, who was Allied Supreme Commander NATO Europe 1997-2000, which speaks to the strong human capital that is associated with the business.

When analyzing the management team at MCF Energy, we are impressed with the types of executives that are involved with the operation. We believe the company has the caliber of team you would expect to see in a much larger company and want our readers to be aware of the importance of this.

An Energy Business That is Flying Under the Radar

MCF Energy is a low profile company having only recently started trading on the TSX-Venture and Frankfurt Stock Exchanges in early 2023. We expect more investors to become aware of MCF Energy in the coming months as the company continues to deliver on its milestones, which have the potential to be constructive for the company’s valuation (approx. US $75 million as of January 27, 2023).

The company’s recent acquisitions of large-scale natural gas exploration assets and its strong management team positions it well for growth in the European energy market. The EU’s mission for energy independence aligns with the company’s goals and we believe MCF Energy is well-positioned to capitalize on this trend.

MCF Energy’s balance sheet has been strengthened by the recent $8.5 million private placement financing and we expect the company to announce major developments in the coming year. We believe the company has significant growth potential and will closely follow the company’s progress.

1 Source: Resources Audit Report Welchau Prospect, ADX-AT-II Concession, Austria, Prepared for Pinedale Energy Limited by Gaffney, Cline & Associates Limited December 2022. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

Forward-Looking Information on MCF Energy (“the Company”)

Except for the statements of historical fact, this communication 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 communication. The information in this communication 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 communication 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 communication, 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.

Company Relationship Disclosure

OTB is responsible for the OTB opinions provided in this disclosure except all sources or information provided by other parties were not verified or authenticated and OTB does not undertake to confirm or substantiate or be responsible for such information provided by other parties.

Any Content posted regarding a Profiled Issuer is not a solicitation or recommendation to buy, sell or hold securities. We cannot and do not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. All information should be independently verified. We are not responsible for errors or omissions in our publications, and any opinions expressed are subject to change, without notice. We do not, nor are we under any obligation to undertake due diligence or investigation or authenticate and verify whatsoever regarding Profiled Issuers or any Content posted in relation thereto and we do not receive any verification from the Profiled Issuer regarding the Content we disseminate. Similarly, while we endeavor to facilitate the provision of quality information, we are not responsible for any loss or damages caused or alleged to have been caused by its use nor verify or authenticate or update such information.

Pursuant to an agreement between Spotlight Media and MCF Energy Ltd. we have been hired for a period of 180 days beginning January 11, 2023 and ending July 11, 2023 to publicly disseminate information about MCF Energy Ltd. including on the Website and other media including Facebook and Twitter. We are being paid $3,000 per month by MCF Energy Ltd. and were paid “ZERO” shares of unrestricted or restricted common shares. We plan to sell the “ZERO” shares of MCF Energy Ltd. that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of MCF Energy Ltd. in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.

This article contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, state, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate and expand the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s limited operating and profitability track record; dependence on management; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the impact of the Russia-Ukraine conflict on the global economy; the continued impact of the COVID-19 pandemic; and the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws

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