Cirrus to Optimize Development at Netherlands Well

Cirrus updated regarding ongoing activities in our wholly owned subsidiary, Cirrus Energy Nederland B.V. (Cirrus) in The Netherlands.

Well M07-07 (Cirrus 42.75%, operator)

The deviated M07-07 well, drilled from the M7-A production platform, encountered the top of the prognosed Jurassic-aged sandstone reservoir at a true vertical depth of 2,792 meters sub-sea. The true vertical gross thickness of the drilled reservoir section is 48.7 meters the upper part of which is gas bearing with an interpreted gas-water contact at 2,816 meters. Preliminary petrophysical analysis indicates average porosities of 9% to 12% with an average net to gross ratio of approximately 50% over the reservoir interval. Permeability ranges from 0.1 mD to 10 mD. Further detailed analysis of both core and log data are underway to improve quantification and understanding of the petrophysical parameters for this reservoir.

The M07-07 appraisal well was initially completed and, upon clean-up flow, tested at a stabilized rate of 268,000 Nm3/d (10.0 MMscf/d) with a flowing well head pressure of 110 bar (1600 psi) through a 36/64" choke.

At the end of the initial clean up test, however, it was established that a permanent packer in the completion had failed and was leaking which therefore required replacement. Following a workover to replace the packer, there was damage to the formation as a result of exposure to fluids used to kill the well and only minor gas flow rates have subsequently been measured. As a consequence of the low productivity due to formation damage, plus the proximity of the gas-water contact, the existing wellbore is not expected to be used for production purposes.

The well has met the pre-drill objective of confirming the presence of a gas-bearing Jurassic reservoir. Detailed engineering design and planning will be undertaken to optimize the design of a potential future sidetrack of the M07-07 well to achieve optimum productivity and recovery of gas from this new reservoir. Evaluation of petroleum initially in place and estimates of recoverable volumes of gas in the new Jurassic pool appraised by M07-07 will be undertaken as part of Cirrus' August 31, year-end reserves audit exercise. Partners in the well are the Dutch state participant, EBN B.V. (50%), TAQA Offshore B.V. (5%) and Energy06 Investments B.V. (2.25%).

Cirrus' President, David Taylor, commented, "The M07-07 well has established that there is a potentially substantial additional gas accumulation which can be developed and produced via the existing M07-A production platform and export infrastructure. With the substantial amount of data acquired from the M07-07 well, detailed work will now be undertaken to optimize the development of this new pool."