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15 Jan 2009 07:00
15th January 2009
CIRCLE OIL PLC
("Circle" or the "Company")
Appraisal Well Discovery on NW Gemsa Concession, Egypt
Circle Oil plc (AIM: COP), the international oil and gas exploration and development company, is pleased to announce that the Al Amir SE-2X appraisal well has been drilled in the onshore North West Gemsa Concession in Egypt.
Circle is delighted to confirm a discovery in the Kareem Formation (the "Formation") sandstones, with the well testing 41° API oil and gas at sustained average rates of 5,785 bopd and 7.8 MMscfd using a 64/64" choke from the lower of two identified pay zones. The well, which is the first appraisal well to be drilled on the Al-Amir SE-1 ST discovery, is currently being completed as a potential producer.
Logging results indicate that the total net thickness of the two pay zones is approximately 42 feet. The upper pay zone identified in the Formation is 22 feet thick and will be tested to confirm its flow rate potential at a future date when the area will be further appraised and brought into commercial production.
A full technical evaluation of all the results is underway to permit development planning and is a precursor to further assessment of the resource. An assessment of reserves has not yet been completed.
The NW Gemsa concession covers an area of over 400 square kilometres and lies about 300 kilometres southeast of Cairo, in a partially unexplored area of the Gulf of Suez Basin. The concession agreement includes the right of conversion to a production licence of 20 years, plus extensions, in the event of commercial discoveries. The North West Gemsa Concession partners include: Vegas Oil and Gas (50% interest and operator); Circle Oil plc (40% interest); and Premier Oil plc (10% interest).
David Hough, CEO of Circle, said:
"This successful appraisal well is yet more excellent news for Circle Oil. We can be justifiably very happy with the results of our ongoing drilling programme as we have discovered commercial hydrocarbons in 5 of the last 6 wells drilled. These drilling successes further strengthen the Company's position and we look forward to the continuing appraisal of this growing asset and its conversion into production revenues as soon as possible."
Glossary
Bopd - Barrels of oil per day
API - American Petroleum Institute density scale
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. Professor Green has relied on information supplied by the operator in carrying out his review.
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
George Cazenove
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 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 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
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