24 Oct 2011 11:00
24th October 2011
CIRCLE OIL PLC
("Circle" or the "Company")
Operating Update Egypt
Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to announce the following update regarding the Al Ola-2 well drilled in the Al Amir SE field, the Geyad-D well in the Geyad field and a progress update following the commencement of water injection.
Al Ola-2
Al Ola-2 is located in the south eastern part of the Al Amir SE field (AASE), downdip and 850 m to the north-west of the Al Ola-1 production well and 1,810 m south south-east of the AASE-8 water injector well in the Al Amir Development Lease. The well was spudded on 1 September 2011 and drilled to 10,552 ft MD in the Upper Rudeis. The main objectives for this well were to appraise the Shagar and Rahmi sandstones of the Kareem Formation in a downdip location and to evaluate the potential for water injection to support oil production from the updip AASE field wells. The Shagar sands were found to be oil bearing from 10,143 to 10,158 ft MD, with 15 ft MD of net pay, an average porosity of 13% and an average water saturation of 22%. The Rahmi sands were encountered with poor quality sands.
Although Al Ola-2 was initially planned as an injector, the presence of the oil column in the Shagar resulted in the decision to complete the well initially as a production well from the Shagar sands. Perforations were completed between 10,143 and 10,158 ft MD. The well has been connected to the production facilities and the Shagar sand flow tested at 2,825 bopd and 2.679 MMscfd using a 64/64" choke. This test flow rate was provided by the operator as part of a variable choke size testing programme to assess the productivity of the well. The Al Ola-2 production rate will be subject to operator control for field management purposes.
The previous deepest oil down to in AASE was found in AASE-6X at 9,698 ft SS, whereas in Al Ola-2 the oil down to is at 9,960 ft SS at the base of the Shagar sand, resulting in an increase in depth of oil down to of 262 ft. The shallowest water up to in AASE-7X is at 10,115 ft SS at the top of the Shagar sand.
This increase in oil down to depth of 262 ft should have a positive effect on both the oil in place and therefore calculated recoverable resources.
Geyad-D
The rig has now been mobilised to drill a production well at the Geyad-D location on the northern flank of the Geyad field, updip of the Geyad-2XST producer. The well's objective is to appraise both the Shagar and Rahmi sands for production in that location. The proposed total depth of the well is 6,050 ft MD into the Upper Rudeis Formation.
Water Injection Al Amir SE Field
Water injection in AASE commenced successfully on two wells in the Al Amir SE field, on 27 Sept 2011 in AASE-7X in the Shagar and Rahmi sands and on 1 October 2011 in AASE-8X in the Rahmi sand. The combined water injection rate is currently approximately 9,750 barrels per day.
The NW Gemsa Concession, containing the Al Amir and Geyad Development Leases, covering an area of over 260 square kilometres, 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.
Production from the Al Amir SE and Geyad fields is running steady at around 7,800 bopd (3,120 bopd net to Circle). The NW Gemsa Concession partners include: Vegas Oil and Gas (50% interest and operator); Circle Oil Plc (40% interest); and Sea Dragon Energy (10% interest).
Prof Chris Green, CEO, said
"I am delighted to report another positive drilling result for the partnership in NW Gemsa as well as the successful start up of water injection in two wells in the Al Amir SE field. The rig has moved and is spudding a well on the Geyad-D location intended as a producer for the Geyad field as part of the overall plan to improve the productivity of the NW Gemsa accumulations."
Glossary
bopd barrels of oil per day
ft Feet
MD Measured Depth
m Metres
MMscf/d Millions of standard cubic feet per day
SS Sub Surface
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, and Dr Stuart Harker, VP Geology, also with over 30 years experience, are 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:
Circle Oil Plc (+44 20 7638 9571)
Professor Chris Green, CEO
Evolution Securities (+44 20 7071 4300)
Chris Sim
Neil Elliot
Fox-Davies Capital (+44 20 3463 5010)
Daniel Fox-Davies
Richard Hail
Citigate Dewe Rogerson (+44 20 7638 9571)
Martin Jackson
Kate Lehane
Murray Consultants (+353 1 498 0300)
Joe Murray
Joe 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 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 two 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 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.