CALGARY, Oct. 5 /CNW/ - Cirrus Energy Corporation (TSXV: CYR) is pleased to announce that its wholly owned subsidiary in The Netherlands, Cirrus Energy Nederland B.V. ("Cirrus") has commenced commercial production from the L8-D field. The producing well, L11b-A06, was drilled in early 2009 into the L8-D field from the L11b-A production platform which was acquired by Cirrus and the L8-D Group on August 1, 2009. The platform has been subsequently refurbished by TAQA Offshore B.V. who are managing production operations on behalf of the L8-D Group.
The L8-D field area has been unitised and equity interest partners in the L8-D Group are Cirrus (operator and 25.479%), TAQA Offshore B.V. (15.000%), TAQA Licenses Offshore B.V. (2.880%), Energy06 Investments B.V. (1.341%), EWE AG (13.400%) and EBN (41.900%).
The L11b-A06 well commenced production on October 4, 2009 and is currently producing at a constrained gross rate of 32.8 MMscf/d although production rates of 37.3 MMscf/d have been tested. The price received for Dutch gas is based on a basket of alternative energy sources and historically has closely followed that of crude oil with a lag of about 6 months. The realised price for L8-D equivalent quality gas in September 2009 was C$8.00 per thousand cubic feet relating to average Brent prices of approximately US$45.00 per barrel in March 2009. At a Brent oil price of US$70.00 per barrel, the future realised price for L8-D gas is expected to be over C$9.50 per thousand cubic feet.
The second appraisal/development well on the L8-D field is currently being drilled from the L11b-A platform using the Nobel Lynda Bossler jackup drilling rig. This well, L11b-A07, is expected to be completed in December 2009.
M7-A Field (Cirrus 42.75% and operator)
Production from the M7-A field has recently been stable at a constrained rate of 23.5 MMscf/d which is the maximum allowable under the processing agreement with the operator of the L9-FF processing platform. Since production start on September 12, 2009, the M7-A platform and infrastructure has performed to design specification with close to 100% up time.
Cirrus President and CEO David Taylor comments; "The start-up of the L8-D Field is a significant achievement for Cirrus coming less than a month after start-up of the M7-A field. It is also noteworthy that first production from the L8-D field has been achieved just eight months after the testing and completion of the L11b-A06 well. This achievement underscores our business strategy in The Netherlands which is to establish Cirrus as the pre-eminent junior company in the offshore Dutch gas basin."
Cirrus Energy Corporation is an international oil and gas company headquartered in Calgary and has approximately 78.7 million fully diluted common shares outstanding.
This press release may include forward-looking statements including opinions, assumptions, estimates and expectations of future production, cash flow and earnings. When used in this document, the words "anticipate", "believe", "estimate", "expect", "intent", "may", "project", "plan", "should" and similar expressions are intended to be among the statements that identify forward-looking statements. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company believes that the expectations represented by such forward-looking statements are reasonable there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to, the volatility of oil and gas prices, the ability to implement corporate strategies, the state of domestic capital markets, the ability to obtain financing, changes in oil and gas acquisition and drilling programs, operating risks, production rates, reserve estimates, changes in general economic conditions and other factors more fully described from time to time in the reports and filings made by Cirrus with securities regulatory authorities.
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SOURCE CIRRUS ENERGY CORPORATION
For further information: For further information: David Taylor, President and Chief Executive Officer; Glenn Gradeen, Executive Vice President and Chief Operating Officer, Cirrus Energy Corporation, Suite 208, 5 Richard Way S.W., Calgary, Alberta, T3E 7M8, Canada, Website: www.cirrusenergy.ca, Telephone: (403) 216-5030, Facsimile: (403) 265-9530