4 Jan 2011 07:00
4 January 2011
Circle Oil Plc
("Circle" or the "Company")
Drilling Update Morocco
Further Gas Discovery
Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to announce that the KSR-10 exploration well has been drilled, logged and successfully tested in the Sebou Permit, Rharb Basin, Morocco.
The Company confirms a gas discovery in both the Main Hoot target and a secondary Mid Hoot target. The well first tested gas at a sustained rate of 10.6 mmscf/d on a 26/64" choke from the Main Hoot. The perforated Main Hoot zone of 8.4 metres at 1,736.6-1,728.2 metres MD plus a 1.5 metre zone at 1,720.0-1,718.5 metres MD has a calculated net gas pay of 9.9 metres. The Mid Hoot zone was then perforated and flowed gas at a sustained rate of 2.39 mmscf/d on a 16/64" choke. The perforated Mid Hoot zone of 1,650.5-1,649.7 metres MD plus 1,647.6-1,646.8 metres MD has a calculated net gas pay of 1.6 metres.
Additional gas pay zones of 4.4 metres, 3.1 metres and 1.4 metres in the Lower, Middle and Upper Guebbas were also logged. Testing of the Lower Guebbas encountered problems and was inconclusive. This Lower Guebbas zone together with the additional pay zones in the Middle and Upper Guebbas will be tested at a later date. The well is being completed as a potential producer.
A full technical evaluation of all the results of the well is underway. This will allow for forward planning as a precursor to further assessment of the resource, including conducting an extended well test to give a more complete estimation of the reserves.
The drilling rig is now moving to commence drilling ADD-1, being the fourth well of the planned five well drilling program in the area. Following this, the KSR-11 well will be drilled and the DRJ-6 well from the previous drilling campaign will be tested. Weather permitting, the KAB-1 well, drilled in September 2010, will be re-entered for logging or re-drilled.
The Sebou permit lies to the north-east of Rabat in the Rharb Basin in Morocco. The Rharb Basin is a foredeep basin located in the external zone of the Rif Folded belt. The concession agreement, in which Circle has a 75% share and ONHYM, the Moroccan State oil company, has a 25% share, includes the right of conversion to a production licence of 25 years, plus extensions in the event of commercial discoveries.
Prof. Chris Green, CEO, said:
"I am pleased to report that we have continued our drilling success in Morocco's Rharb Basin. The KSR-10 well has been completed and, once required, will be available for future production."
Glossary
mmscf/d millions of standard cubic feet per day
MD Measured Depth
ONHYM Office National des Hydrocarbures et des Mines
In accordance with the guidelines of the AIM Market of the London Stock Exchange, Professor Chris Green, Chief Executive Officer of Circle Oil Plc, an explorationist and geophysicist with over thirty years oil & gas industry experience, is a qualified person, as defined in the London Stock Exchange's Guidance Note for Mining and Oil and Gas companies, who has reviewed and approved the technical information contained in this announcement.
For further information contact:
Circle Oil Plc (+44 20 7638 9571)Professor Chris Green, CEO
Evolution Securities (+44 20 7071 4300)Rob CollinsChris SimNeil Elliot
Fox-Davies Capital (+44 20 7936 5230)Daniel Fox-Davies
Philip Davies
David Porter
Citigate Dewe Rogerson (+44 20 7638 9571)Martin JacksonGeorge Cazenove
Murray Consultants (+353 1 498 0320)Joe MurrayJoe Heron
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 producing, low-risk near-term production and acreage with significant upside exploration potential. The Company listed on AIM in October 2004.
Internationally, the Company has continued to expand its portfolio over the past 2 years and now has assets in the Rharb Basin, Morocco; the Ras Marmour Permit in southern Tunisia; the Mahdia Permit offshore Tunisia; the Grombalia Permit in northern Tunisia; and the Zeit Bay area of Egypt. Circle also has the largest licence holding of any Company in Oman. In addition to offshore Block 52, the Company also has an ongoing exploration program in Block 49 onshore.
The Company'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. Circle may use its own expertise to appraise reserves and bring assets into production, generating sustained cash flow for further investment. In addition it may seek farm-outs to selected partners who would then invest in the exploration and continue through to the development of the assets for production.
Further information on Circle is available on its website at www.circleoil.net.