25 Jul 2013 07:00
25 July 2013
Circle Oil Plc
("Circle" or the "Company")
Beni Khaled Production Licence Farm-In
Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to announce the following update regarding its operations in Tunisia.
The Company has entered into an agreement with Exxoil S.A. ("Exxoil"), the partner in its existing onshore licences, to farm into the Beni Khaled production licence (the "Licence") which is centred in the Cap Bon peninsula, Tunisia.
Under the terms of the agreement Circle will acquire an initial 30% interest in the Licence in return for funding a 50 sq km 3D seismic programme and one well, with Circle's funding expected to be US$5 million. The agreement further allows for Circle to increase its share in the Licence to 50% in two equal stages by funding one well in each stage up to US$2 million per well. The farm-in will be funded from Circle's existing cash flow, resources and facilities. Exxoil will remain as operator of the Licence.
The Licence area contains the undeveloped Bir Drassen discovery, well BDR-1, which under test flowed at a test rate of 23.5 MMscf/d of gas and 28 bcpd and also indicates the potential for an unappraised oil rim.
Initial operator estimates of most likely recoverable resources from the Bir Drassen discovery indicate 47-50 bcf of gas with the possibility of an additional 6 MMbo in the oil rim. In addition, two further undrilled leads have been identified within the production licence to be confirmed by the 3D seismic survey.
The 3D seismic acquisition is presently planned to start in late 2013/early Q1 2014 with first drilling presently planned for early H2 2014.
The Licence presently produces, from the Beni Khaled field, approximately 80 - 100 bopd of light oil (50⁰API) from one well, EBK-1, and contains additional possible fault bounded extensions to the Beni Khaled oilfield itself. Historical production has so far produced some 1.2 MMbo and Circle estimates indicate the field now has 0.25-0.5 MMbo remaining to be produced. The Beni Khaled production licence has a remaining term of 19 years.
The agreement to farm into the Beni Khaled licence is subject to the necessary approvals of the Tunisian government and relevant authorities.
Prof Chris Green, CEO, said:
"We are pleased to announce this farm-in with a proven discovery and additional potential upside. This farm-in is the start of furthering the Company's development for the near to mid-term and represents an opportunity to monetise a low risk opportunity in the near-term."
Glossary
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bcpd bopd bcf MMbo MMscf/d sq km | barrels of condensate per day barrels of oil per day Billion cubic feet Million barrels of oil Million standard cubic feet per day square kilometres |
In accordance with the guidelines of the AIM Market of the London Stock Exchange, Dr Stuart Harker, VP Geology, also with over 30 years' experience, is the qualified persons as defined in the London Stock Exchange's Guidance Note for Mining and Oil and Gas companies, who have reviewed and approved the technical information contained in this announcement. Professor Green and Dr Harker have relied on primary information supplied by the operator in carrying out their review.
For further information contact:
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Circle Oil Plc Professor Chris Green, CEO
| (+44 20 7638 9571) |
Investec Chris Sim George Price James Rudd
| (+44 20 7597 5970) |
Liberum Capital Limited Simon Atkinson
| (+44 20 3100 2222) |
Citigate Dewe Rogerson Martin Jackson Jack Rich
| (+44 20 7638 9571) |
Murray Consultants Joe Murray Joe Heron
| (+353 1 498 0300) |
Notes to Editors
Circle Oil Plc (AIM: COP) is an international oil & gas exploration, development and production Company with an expanding portfolio of assets in Morocco, Tunisia, Oman and Egypt with a combination of low-risk near-term production and significant exploration upside potential. The Company listed on AIM in October 2004.
Internationally, the Company has continued to expand its portfolio over the past years and now has assets in the Rharb Basin, Morocco; the Ras Marmour Permit in southern Tunisia; the Mahdia Permit offshore Tunisia and the Zeit Bay area of Egypt. Circle also has the largest licence holding of any company in Oman. In addition to its prospective Block 52 offshore, Circle also has an ongoing exploration programme in Block 49 onshore.
Circle's strategy is to locate and secure additional licences in prospective hydrocarbon provinces and through targeted investment programmes, monetise the value in those assets for the benefit of shareholders. This could be achieved through farm-outs to selected partners who would then invest in and continue the development of the asset into production, or Circle may itself opt to use its own expertise to appraise reserves and bring assets into production, generating sustained cash flow for further investment.
Further information on Circle is available on its website at www.circleoil.net.