16 Feb 2009 07:00
16 February 2009
CIRCLE OIL PLC
("Circle" or the "Company")
Drilling Update
Further Gas Discovery in Morocco
Circle Oil plc (AIM:COP), the international oil and gas exploration, development and production company is delighted to announce that the KSR-8 well in the Sebou permit in the Rharb Basin in Morocco has been successfully drilled, logged and tested.
The KSR-8 well has tested two zones, the first in the Upper Hoot formation at a depth of 1755.5-1758 metres and the second, a twin sand, in the Main Hoot formation at depths of 1847.5-1849 metres and 1853-1863 metres, with net pay of 2.5 metres and 11.5 metres respectively.
The lower of the two zones in the Main Hoot formation flowed gas at a sustained rate of 12.48 mmscf/d through a 28/64" choke and produced no liquids. The zone in the Upper Hoot formation flowed at an average rate of 6.76 mmscf/d through a 24/64" choke and also produced no liquids.
The well is being completed as a potential producer. Full technical evaluation of the results is ongoing. Once connected to the local gas infrastructure an extended well test and full assessment of the reserves of the discovery will be completed.
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.
David Hough, CEO of Circle, said:
"This discovery, which is our third success in three wells drilled in Morocco, is particularly pleasing as it has flowed under test at one of the highest flow rates ever in the Rharb. The well took considerably longer to complete than expected due to very severe flooding in the area over recent months making conditions extremely difficult. I would like to thank our drilling crew for their efforts under these conditions to deliver this excellent result.
With ONZ-4 in production and ONZ-6, CGD-9 and now KSR-8 ready for connection into the local infrastructure, our plans to build up gas production in Morocco are developing very nicely. I look forward to the results of the next wells of our current drilling programme across North Africa where our success rate now stands at 6 commercial discoveries out of 7 wells drilled."
Glossary
MMscfd - Millions standard cubic feet per day
In accordance with the guidelines of the AIM Market of the London Stock Exchange, Professor Chris Green, Chief Operating 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)
David Hough, CEO
Collins Stewart Europe Limited (+44 20 7523 8350)Adrian Hadden
Fox-Davies Capital (+44 20 7936 5230)
Daniel Fox-Davies
Citigate Dewe Rogerson (+44 20 7638 9571)Martin Jackson
Notes to Editors
Circle Oil Plc
Circle Oil Plc (AIM: COP) is an international oil & gas exploration and development Company with an expanding portfolio of assets in Morocco, Tunisia, Oman, Egypt and Namibia with a combination of low-risk 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 2 years and now has assets in the Rharb Basin, Morocco; the Ras Mamour Permit in southern Tunisia; the Mahdia Permit offshore Tunisia; the Grombalia Permit in northern Tunisia; the Zeit Bay area of Egypt and the Owambo Basin, Namibia. Circle also has the largest licence holding of any Company in Oman. In addition to its highly prospective Block 52 offshore, the Company also has an ongoing exploration program in Block 49 onshore.
The Company's strategy is to locate and secure additional licenses 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 Oil is available on its website at www.circleoil.net