Circle Oil Plc Regulatory News (COP)

 20 December 2010

Circle Oil Plc

("Circle" or the "Company")

Egypt NW Gemsa Production and Drilling Update

Circle Oil Plc (AIM: COP) the international oil and gas exploration, development and production company is pleased to announce the following update on its activities in Egypt.

The Al Ola-1X well has now been placed on stream following receipt of official permission for a long-term production test. The Kareem Rahmi sand was perforated from 9,782 to 9,802 ft MD and is flowing at approximately 1,400 bopd on a 28/64" choke. The overall production from the Geyad and Al Amir SE fields is currently averaging 8,500 bopd. These production levels are now being managed to allow the planned water injection wells to be drilled and the waterflood to become fully operational. As previously announced, for an interim period, production is expected to be 7,000-8,000 bopd after which oil production levels will be systematically and incrementally increased together with the planned gas production once the waterflood is in full operation. Further development drilling is also envisaged with the drilling of Geyad-3.

In this regard, the Al Amir SE-7X water injector was spud on 27 November 2010 and is drilling ahead (08:00 hrs, 19 Dec 2010) in the Belayim Formation at a depth of 8,677 ft MD. This well is also planned to drill deeper to test the Lower Rudeis potential previously identified in wells Al Amir SE-6 and Al Ola-1X. The planned TD of the well is at 16,750 ft MD. Fluid offtake from the Geyad and Al Amir SE fields will continue to be managed in the light of good oil field practice as the waterflood is initiated and becomes operational and proven effective to maximise recovery.

Prof. Chris Green, CEO, said:

"I am pleased to report the continuing successful maturation of the NW Gemsa Development. Operations continue to schedule and the processes are in place to ensure optimisation of this resource for full long-term production and revenue earning."

Glossary

bopd - Barrels of Oil Per Day

ft - Feet

MD - Measured Depth

TD -Total Depth

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. Professor Green has relied on primary information supplied by the operator in carrying out his review.

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.