Cirrus Starts Up Production at Netherlands L8-D Field
Cirrus' 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 unitized 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 realized 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 realized 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 commented, "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."