CALGARY, Jan. 18 /CNW/ - Cirrus Energy Corporation (TSXV: CYR) announces the following operational update regarding ongoing activities in our wholly owned subsidiary, Cirrus Energy Nederland B.V. ("Cirrus") in The Netherlands.
L8-D Field (Cirrus 25.5%, operator)
Platform refurbishment was completed in November 2009 which has subsequently allowed for continuous uninterrupted production from the L11b-A06 well. During this period, production performance has steadily declined and is currently approximately 12 MMscf/d gross. Whilst high initial decline rates were expected, performance to date has been under expectation for reasons which are currently not understood. Further data gathering on the well will be undertaken to assist in the evaluation of reservoir performance and to determine the potential for remedial intervention.
L8-D Field Drilling Operations; L11b-A07 well (Cirrus 25.5%, operator)
Sidetrack activities on the A07 well commenced on December 30, 2009 and a new hole was drilled from 1270 mMD to 2066 mMD. Unfortunately, it has proved impossible to run casing in this new hole and drilling operations on the A07 well have been suspended. The Noble Lynda Bossler drilling rig will shortly be released at which time it will be off contract. Total gross costs expended on the A07 well are estimated as (euro)35.0 million ((euro)8.9 million or approximately C$13.8 million net to Cirrus).
M7-A Field (Cirrus 42.75%, operator)
Production performance of both the M7-A facilities and the M7-A01 well to date has been excellent. Current production is stable at 23.5 MMscf/d (gross) with a flowing wellhead pressure of 3915 psig. Production is currently limited by capacity constraints at the L9-FF processing platform although additional throughput capacity is being sought.
Cirrus' President, David Taylor, comments: "Suspension of drilling operations at the A07 well is clearly a disappointment. Rather than continue with a further sidetrack attempt, however, we feel the most prudent course of action is to temporarily suspend drilling activities, fully evaluate the operational issues that were encountered and re-design the drilling programme before returning to progress the A07 well. In addition, we need to understand the reasons for the production decline of the A06 well to assist in the optimisation of the completion design of future wells on the field.
We expect and have an option to take the Noble Lynda Bossler rig back on contract in the second calendar quarter of 2010 at a rig rate of US$89,500 per day. To allow sufficient time to evaluate and to progress the planning for the redesign of the A07 well, it is likely that the first well to be drilled in the 2010 programme will be the M1-Delta exploration prospect prior to return to the L8-D field. Our 2010 drilling programme is expected to include a total of four to five wells for which Cirrus is fully financed."
Cirrus Energy Corporation is an international oil and gas company headquartered in Calgary and has approximately 93.1 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