Cirrus Provides Prodution Update for Netherlands Fields

Cirrus Energy provided the following production update regarding ongoing activities in our wholly owned subsidiary, Cirrus Energy Nederland B.V. in The Netherlands.

Production Operations

M07-A Field (Cirrus 42.75%, operator)

Production performance of the developed M07-A Bunter reservoir continues on expectation with average gross production for February 2010 of 23.4 MMscf/d at a flowing wellhead pressure of 3550 psig. A total of 3.9 Bcf has been produced since production started on September 14, 2009. Given the available excess capacity of the M07-A01 production well, discussions are underway with the operators of the L09-FF processing platform and the export trunk pipeline to increase available ullage for M07 gas and it is considered likely that production rates can be increased during 2010.

L08-D Field (Cirrus 25.5%, operator)

Since production start on October 4, 2009, the L11b-A06 production well has produced a cumulative 2.1 Bcf and is currently producing at a gross average rate of 8.0 MMscf/d against a pipeline pressure of 1,330 psig.

A Front End Engineering and Design (FEED) study has been completed to evaluate options to make compression available for the L08-D field. This study concluded the most cost effective way is to overhaul and re-activate the available compression facilities already installed on the L11b platform. Detailed engineering has started to allow compression to be available by year-end 2010. Compression will then allow the flowing wellhead pressure to be lowered from current 1,330 psig to 435 psig, with an option to further reduce the flowing wellhead pressure to 145 psig at a later stage.

Field testing work was completed on the L11b-A06 well in early March and the results of this work are being interpreted and integrated into a field development plan at the present time. The key finding from the field work was that all three perforated gas sands are contributing to production in approximately the proportions expected. Furthermore, there is no evidence of near wellbore damage. It is currently assumed that the most likely cause of the more rapid than expected initial production decline from the well is due to partial compartmentalization of the reservoir resulting from changes in reservoir facies and/or minor faulting.

From comparison to the now depleted adjacent L11b-A analogue field, there are two important factors to note:

  • The five production wells drilled on the L11b-A field all had very different production performances depending on their location within the field. Despite this, it appears that an estimated overall 60% recovery of the petroleum in place in the principal reservoir sand was achieved over a 24 year field life.
  • Four of the five wells demonstrated variable but generally high initial decline rates but once stabilised went on producing at very low decline rates for many years as “distant” gas reached the wellbore. The fifth well did not produce any gas.
  • It is expected that future production wells on the L08-D field are likely to exhibit the same variability in both short term and long term production performance.

Preliminary indications are that the original estimates of petroleum-initially-in-place (323 Bcf gross) for the L08-D field are likely to remain similar to as originally stated. To achieve efficient recovery of this gas, however, it appears likely that future development wells may be drilled with a high angle or horizontal component to achieve communication with more of the gas in place and hence improve recoveries. Work is currently underway to redesign the A07Z well and, subject to a final drilling plan and partner approval, the A07Z well is tentatively planned as the third drilling location in Cirrus’ 2010 offshore drilling programme. The A07Z well would be drilled from the L11b-A production platform and is likely to utilize the upper section of the original L11b-A07 well, drilled and suspended in early 2010. If approved by partners, this well would be drilled in the second half of 2010 with first production expected in early 2011.