Cirrus to Continue to Look at Netherlands' Q14
Cirrus announced that its wholly owned subsidiary, Cirrus Energy Nederland B.V., has completed testing operations on the Q14-3 exploration well and has subsequently plugged and abandoned the well.
The Q14-3 well appears to have discovered a gas accumulation in the Triassic Volpriehausen reservoir based on hydrocarbon shows during drilling, log results and their subsequent interpretation and RFT data which recovered samples of good quality high calorific gas with pressure data indicating a substantial potential gas column.
However, a sustainable flow rate of gas was not achieved during testing despite acid wash and water injection treatments. The data acquired during the drilling of the well and its testing will now be analysed to attempt to ascertain not only the likely size of the gas accumulation but also the reasons for the absence of flow during testing. Initial indications are that reservoir formation damage resulted from the substantial volumes of drilling mud lost to the reservoir during drilling.
Partners in the Q14-3 well are EBN B.V. (40%) and TAQA Offshore B.V. (30%) with Cirrus (operator) retaining a 30% interest subsequent to a previously announced farmout agreement with TAQA.
Forward Drilling Program
With ongoing weather-related delays still preventing the installation of the M7-A production platform, the Noble Lynda Bossler drilling rig will imminently be moved to Chevron's L11-A production platform to drill the L11-13 well into the prognosed southern extension of the L8-D gas field. The drilling and testing of the deviated L11-13 well to a total measured depth of approximately 5600 metres (approximate true vertical depth 4200 metres) is expected to take a total of 90 days at an estimated gross cost to the L8-D Unit partners of €30.0 million.
Equity interest partners in the L8-D Unit are Cirrus 25.479%, TAQA 15.000%, DSM Energie B.V. 2.880%, Energy06 Investments B.V. 1.341%, EWE AG 13.400% and EBN 41.900%. Under a previously announced farmin agreement with TAQA, Cirrus will fund 14.079% of the L11-13 well capital costs up to a total expenditure cap (including testing) of €28.0 million and remain operator of the L8-D Unit. Expenditures in excess of the cap will be funded according to partners’ equity interests in the L8-D Unit.
Cirrus' President, David Taylor, commented, "Whilst we are disappointed with the testing results of the Q14-3 exploration well it is nevertheless encouraging that our first well in The Netherlands has discovered a new gas accumulation.
Considerable further work will now be undertaken in the Q blocks area to improve our understanding of both the Q14-3 gas accumulation and the implications for the numerous untested prospects in the area. Whilst there is some geological dependency between prospects in the area, all require detailed and specific assessment and individual prospects may be either upgraded or downgraded as new data are acquired and integrated into our regional understanding.
We are excited about the upcoming L11-13 well which will test a substantial potential extension to the discovered and tested L8-D Field. This well also has the considerable attraction that, in the event of confirming a gas accumulation, it can be tied-in quickly and inexpensively and put on production through the existing L11-A production platform facilities, most likely during the second calendar quarter of 2009. In addition, the L11-13 well is also expected to provide critical data to enable a development decision to be taken on the existing L8-D Field.
Finally and importantly in the current challenging market conditions, it should be noted that Cirrus is well funded with a strong balance sheet and has the capital resources to execute the planned 2009 multi-well drilling and development capital programme”.
Cirrus Energy Corporation is an international oil and gas company headquartered in Calgary and has approximately 76.1 million fully diluted common shares outstanding.
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