First Gas Flows at Clipper South (UK)

Bayerngas UK announced today that production has commenced from the Clipper South gas field, in which the company holds a 25% interest. The field is operated by RWE Dea (50% interest) and Fairfield Energy is also a partner in the field (25% interest).

“We are delighted to see first gas from Clipper South just two years after we agreed to farm-in to the development. RWE Dea has been a dependable Operator and we hope to apply the experience we have gained as a license group to other similar, technically demanding, projects.”

Clipper South is located approximately 60 miles north of Great Yarmouth in 24 metre water depth. Production will be from multiple horizontal wells to a temporarily manned platform from where gas will be exported to the UK via the Lincolnshire Offshore Gas Gathering System (LOGGS) to the Theddlethorpe gas terminal in Lincolnshire.

Production started on Saturday 11 August from the first completed well. Additional wells are currently being drilled and peak production is anticipated in 2013/2014. The field is anticipated to have a production life of approximately 15 years.

The Clipper South reservoir is Lower Permian sandstone belonging to the Rotliegendes Group. Top reservoir is approximately 2500 metres below the sea bed. P50 estimated Gas Initially In Place is approximately 500 Bcf or approximately 14 BCM (Standard). All production wells will be subjected to reservoir stimulation techniques to improve deliverability. The results of this stimulation in the first well have been successful, increasing initial production rates by a factor in excess of 10, giving encouragement for the performance of the remaining wells.

Gerry Harrison, speaking for Bayerngas UK, said, “We are delighted to see first gas from Clipper South just two years after we agreed to farm-in to the development. RWE Dea has been a dependable Operator and we hope to apply the experience we have gained as a license group to other similar, technically demanding, projects.”

Arne Westeng, Managing Director of parent company Bayerngas Norge, commented: “This is our first UK production and therefore a significant milestone for the UK team. We continue to play an active role in the completion of the development and look forward to optimising the remaining drilling programme with Operator RWE Dea and partner Fairfield Energy.”

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Press Release, August 13, 2012