Cirrus Energy Corporation Files Annual Reserves Documents

CALGARY, Dec. 16 /CNW/ - Cirrus Energy Corporation (TSXV: CYR) ("Cirrus") has filed with the securities regulatory authorities in Canada, through the System for Electronic Document Analysis and Retrieval ("SEDAR"), its statement of reserves data for the year ended August 31, 2010 ("Statement of Reserves Data"), which includes the disclosure and reports relating to reserves data and other oil and gas information. In connection with the Statement of Reserves Data, the Company has also filed on SEDAR Form 51-101F2 Report on Reserves Data by GLJ Petroleum Consultants Ltd. and Form 51-101F3 Report of Management and Directors on Reserves Data and Other Information. The entire filings are available for review at www.sedar.com.

    
                             Oil and Gas Reserves
                   Cirrus Working Interest before Royalties
                     Based on forecast Prices and Costs

                     August 31, 2010                  August 31, 2009
                     ---------------                  ---------------
                Oil     Gas     NGL   boe(1)     Oil     Gas     NGL   boe(1)
                ---     ---     ---   ------     ---     ---     ---   ------
             (Mbbls)  (MMcf) (Mbbls) (Mbbls)  (Mbbls)  (MMcf) (Mbbls) (Mbbls)

    Proved    1,065   9,505      27   2,676    1,055   3,471       0   1,634
    Probable  1,287  32,519      11   6,718    1,369  40,345       0   8,093
             ----------------------------------------------------------------
    Total     2,352  42,024      38   9,393    2,424  43,816       0   9,727
             ----------------------------------------------------------------
             ----------------------------------------------------------------

    Note:
    (1) The boe conversion ratio of 6 mcf to 1 bbl used throughout this
    document is based on an energy equivalency conversion method primarily
    applicable at the burner tip and does not represent a value equivalency
    at the wellhead.


             Net Present Values of Future Net Revenue Discounted
                         at 10% Before Income Taxes
                 (expressed in thousands of Canadian dollars)

                         Based on forecast prices
                               at August 31,
                               -------------
                        2010                   2009
                        ----                   ----
                        (CDN)                  (CDN)
                        -----                  -----
    Proved              54,318                 19,391
    Probable           112,812                171,905
               ----------------------------------------------
    Total              167,129                191,296
               ----------------------------------------------
               ----------------------------------------------
    

Background on L08-D Field

GLJ have reviewed the L08-D field and provided a Best Estimate gross total petroleum initially in place (TPIIP) of 323 BCF (Cirrus interest 82 BCF) for this gas reservoir. Cirrus has received approval for a field development plan for the south portion of the L08-D field and, in October, 2009 commenced production from the L11b-A06 well. Only those reserves estimated to be recovered from the L11b-A06 well have been booked to date as the second well, L11b-A07, encountered mechanical problems and, despite encountering indications of a gas charged reservoir, was not able to be completed as a production well as reported in January 2010. Cirrus is currently evaluating options to sidetrack or replace the A07 well, production data from which will help identify how much of the L08-D gas in place can be economically produced and ultimately considered as reserves.

The assumptions utilized in preparing the estimates of TPIIP are based on definitions contained in the Canadian Oil and Gas Evaluation Handbook. There is no certainty that it will be economically viable or technically feasible to produce any portion of the volumes currently classified within the identified TPIIP.

Background on M07-A Field

GLJ have reviewed the performance of the existing Triassic well M07-A01 and have evaluated best estimate gross discovered petroleum initially in place (DPIIP) of 34.5 BCF (Cirrus interest 14.7 BCF). After working interest production of 2.6 BCF, working interest Proved reserves are 6.6 BCF with working interest Proved plus Probable reserves of 9.2 BCF.

For the M07-07 well, which confirmed producible gas in the overlying and separate Jurassic reservoir, GLJ have limited their estimate of discovered petroleum to one spacing unit (one square mile) around the well due to the absence of offset well control. Gross DPIIP in this spacing unit is estimated as 14.0 BCF raw (Cirrus interest 6.0 BCF raw) with working interest Proved reserves of 2.1 BCF and working interest Proved plus Probable reserves of 3.0 BCF. GLJ have also calculated a Best Estimate TPIIP for the Jurassic formations of 34.6 BCF raw (Cirrus interest 16.4 BCF raw). Based on this TPIIP GLJ has determined a Best Estimate contingent resource potential of 4.6 BCF (working interest sales gas) which is incremental to the Proved plus Probable reserves of 3.0 BCF assigned to the spacing unit around the M07-07 well.

Background on M01-A Field

GLJ have determined the M01-A field to have a best estimate gross DPIIP of 93.9 BCF raw (Cirrus interest 44.6 BCF raw). Based on a revised development plan of a single horizontal multi-fracced well GLJ's revised estimate of Proved plus Probable reserves is 22.3 BCF (working interest sales gas).

GLJ have also determined a Best Estimate contingent resource potential of 8.9 BCF (working interest sales gas) which may be recovered by a second horizontal development well in the M01-A field and which is incremental to the Proved plus Probable reserves of 22.3 BCF (working interest sales gas) assigned to a single development well.

Coora Field, Trinidad and Tobago

Cirrus has entered into a definitive sales agreement to sell its 49% interest in the Coora Field which is expected to be effective and close in early 2011 as announced on November 3, 2010. Following closing, the balance of Cirrus' reserves and values attributable to its ongoing business in The Netherlands is as follows:

    
                  Oil and Gas Reserves (Netherlands only) :
                   Cirrus Working Interest before Royalties
                     Based on forecast Prices and Costs

                     August 31, 2010                  August 31, 2009
                     ---------------                  ---------------
             Condensate     Gas       boe(1)  Condensate     Gas       boe(1)
             ----------     ---       ------  ----------     ---       ------
               (Mbbls)     (MMcf)    (Mbbls)    (Mbbls)     (MMcf)    (Mbbls)

    Proved         27      9,505      1,611          0      3,471        578
    Probable       11     32,519      5,431          0     40,345      6,725
              ---------------------------------------------------------------
    Total          38     42,024      7,042          0     43,816      7,303
              ---------------------------------------------------------------
              ---------------------------------------------------------------



             Net Present Values of Future Net Revenue Discounted
                at 10% Before Income Taxes (Netherlands only)
                 (expressed in thousands of Canadian dollars)

                         Based on forecast prices
                               at August 31,
                               -------------
                        2010                   2009
                        ----                   ----
                        (CDN)                  (CDN)
                        -----                  -----
    Proved              42,369                 10,103
    Probable            92,253                152,934
               ----------------------------------------------
    Total              134,622                163,038
               ----------------------------------------------
               ----------------------------------------------
    

Cirrus President and CEO, Dave Taylor, comments "The discovery of a new pool with the M07-07 well has been very encouraging and provides the opportunity for future development of this pool through the existing M07-A infrastructure. The current reserves booking for this pool is consistent with our conservative booking policy although our internal estimates of gross unrisked DPIIP, mapped on 3D seismic, exceed 60 BCF. It should also be noted that over the past year there has been a meaningful movement of reserves from the Probable into the Proved category based on the production performance of the M07-A Field. We are now focussing on firming up our 2011 drilling plans which are aimed at developing the discovered volumes we have established in both the M07-A Jurassic and possibly the L08-D fields."

Cirrus Energy Corporation is an international oil and gas company headquartered in Calgary and has approximately 91.1 million fully diluted shares outstanding.

Forward-Looking Statements

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.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

SOURCE CIRRUS ENERGY CORPORATION

For further information: For further information: David Taylor, President and Chief Executive Officer; Theo Bergers, Managing Director, Cirrus Energy Nederland B.V., 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

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CIRRUS ENERGY CORPORATION

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