Cirrus Makes Headway in Developing M7-A, L8-D Fields
Cirrus Energy announced the following operational update regarding ongoing development activities in our wholly owned subsidiary, Cirrus Energy Nederland B.V. ("Cirrus") in The Netherlands.
M7-A Project (Cirrus 42.75%, operator)
A turnkey lump sum contract has been awarded to Seaway Heavy Lifting for the use of the heavy lift vessel HLV Stanislav Yudin to install the M7-A platform during June 2009. Once the platform is installed, the Noble Lynda Bossler jackup rig will drill the M7-A01 development well which has an expected duration of 53 days. Tie-in activities at NAM's L9-FF platform where gas from the M7-A field will be processed are essentially completed. On current planning, first gas from M7-A is expected during the fourth calendar quarter of 2009.
L8-D Project (Cirrus 25.5%, operator)
The L8-D field partners have agreed to pursue a first phase of development of the L8-D field which will initially involve acquisition of the L11b license, the L11b-A production platform and the tie-in of the L11-13 well which was tested and completed as a development well on the L8-D field in February 2009 (this well has subsequently been renamed L11b-A06). Agreement for acquisition of the L11b license and the L11b-A platform from the L11b partners is currently being finalized and is expected to be completed in the third calendar quarter of 2009. Operatorship will be transferred concurrently with the acquisition. Once this process is completed, the L11b-A06 well will be tied-in and put into production which is anticipated during the fourth calendar quarter of 2009.
Whilst Cirrus is, and will remain, the formal operator of the L8-D field, one of the field partners, TAQA Energy B.V. ("TAQA") will be assuming responsibility for production operations at the L11b-A platform. TAQA have an established and comprehensive operating capability in The Netherlands which is expected to simplify the process of assuming control of the manned L11b-A platform by the L8-D field partners.
A second appraisal/development well is planned to be drilled into the L8-D Field from the L11b-A platform in the second half of 2009 which, if successful, will be completed for production (and named L11b-A07). Combined initial production capacity from the A06 and A07 wells is expected to be adequate to meet the L11b-A platform design production capacity of 1.2 million m3/day (45.0 mmscf/d).
M1-A Project (Cirrus 47.5%, operator)
With Cirrus' activity focused on bringing the M7-A and L8-D fields into production in 2009, the M1-A field will now not be in production before 2010. Work has continued with respect to fabrication of the subsea tree, control and high pressure protection systems which are currently 90% completed. However, offshore installation of the subsea equipment and recompletion and stimulation of the M1-3 well awaits reaching agreement on satisfactory commercial terms for accessing the existing export pipeline infrastructure.
The contracted Noble Lynda Bossler drilling rig was released to Wintershall after completion of the L11-13 well and is currently expected to return to Cirrus in early July, 2009. On current planning, the rig will first drill the M7-A development well followed by the second appraisal/development well on L8-D.
Cirrus President and CEO David Taylor commented, "The successful outcome of the L11-13 well has been very positive for Cirrus and we now look forward to bringing both the L8-D and M7-A fields into production before the end of 2009. In addition, we are planning to drill a second well into the L8-D field which should substantially enhance the production capacity of the field.
"Furthermore, Cirrus is fully financed for all the envisaged 2009 activities and has adequate cash resources to complete the initial development of both the L8-D and M7-A fields. Whilst currently debt free, Cirrus has an undrawn EUR 30.0 million line with the Royal Bank of Scotland which we anticipate using for a significant proportion of the forthcoming 2009 development expenditures thus leaving our equity capital available for additional investment opportunities."
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