10 Dec 2009 11:44
10 December 2009
Circle Oil Plc
("Circle" or the "Company")
Operational Update
Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to provide the following update on its areas of operational interest.
Egypt
NW Gemsa Development Lease and Concession (Circle: 40% equity interest)
After the initial month of production from the recently connected Al-Amir SE-4X well, the total average gross daily production from the existing wells in Al-Amir and Geyad areas has reached 6070 bopd. The Al-Amir SE-4X well is producing at approximately 2200 bopd from the lower of two possible pay zones located in the Kareem Rahmi Sandstone. With five wells, Al-Amir SE-1, 2, 3 and 4 and Geyad-1, now in production, the total oil produced from both areas since production began in late February is over 940,000 barrels.
The Mubarrak-10 rig is continuing with the drilling of the Geyad-2 well which is the first appraisal well in the Geyad discovery area. The primary target is the Kareem Formation and it is also planned to drill a secondary target in the Pre-Miocene Nubia sandstones which are now prognosed at a depth of 11,500-12,500 feet, which is slightly deeper than initially anticipated. The results of this appraisal well will be issued in due course.
Tunisia
Ras Marmour Permit (Circle: 23% working interest)
Circle is pleased to confirm the completion of a limited 98 km 2D seismic programme in the Ras Marmour Permit in Tunisia. This 2D seismic has been completed as part of the work programme to better define potential drilling prospects within the permit. The seismic data is now being processed prior to integration into the technical database for interpretation.
Grombalia Permit (Circle: 36% working interest)
Seismic acquisition in the Grombalia permit will be undertaken, as required, at a later date.
Oman
Block 49 (Circle: 100% equity interest)
The 3D seismic survey tenders for Block 49 have been evaluated and the contract has been awarded. The seismic acquisition will be carried out over this winter and spring when the daytime temperatures are cooler in the area. The planned work programme consists of the acquisition of approximately 900 sq kms of 3D seismic data encompassing the main prognosed play areas in the south of Block 49. Following acquisition the data will be processed prior to interpretation and incorporated into our technical database.
Morocco
Sebou Permit (Circle: 75% equity interest)
Preparations are ongoing for the 2010 drilling campaign during which we are planning to drill 5 new exploration wells and re-enter the DRJ-6 well (which was not tested in the first drilling campaign). The locations for the first two wells of the campaign, CGD-11 and KAB-1, have been agreed. The first two drill rig concrete base platforms and associated access roads (CGD-11 requires a 1.7 kilometer access road) are under construction to avoid any winter wet weather delays and to minimize any downtime and resultant cost increases incurred as a consequence of flooding and bad weather. The first of these roads and drilling bases will be completed before the end of the year. Drilling will commence once management is satisfied that the wet weather season is over and all necessary pre-drill preparations are completed.
Field engineering operations continue to tie in both KSR-8 and KSR-9. At the present time, the tie-in pipeline from KSR-8 to the existing infrastructure is complete but awaits the installation of a water separator. Once completed, KSR-8 will produce under extended well test. Total daily production figures for the last 2 months have been reduced to about 1.6MMscfd due to customer maintenance programme. This maintenance will be completed in the first quarter 2010 following which production will initially increase into a range determined by the customer's day to day factory furnace requirements but will not exceed 2.5MMscfd until the planned new 6" gas trunkline is installed. The pre-engineering for the installation of the new trunkline, which will be capable of transporting up to a maximum of 17.5MMscfd, is ongoing. Subject to receipt of all necessary government and related approvals and resolution of any issues that may arise as a result of these procedures, the installation of the new trunkline will be planned to commence thereafter.
David Hough, CEO of Circle, said:
"We are obviously pleased to announce the increased daily production levels from the Al-Amir SE-4X well. We will continue to produce at this level while keeping an eye on reservoir management during the ongoing appraisal of the Al-Amir and Geyad areas. The results of this appraisal will be reported in due course.
In Tunisia we have acquired extra seismic in our Ras Marmour permit over two possible prospects and we look forward to incorporating the results into our technical studies. We are obviously delighted to be entering a new phase of activity in Block 49 Oman and await with anticipation the start of the seismic acquisition.
Preparations for drilling are well underway in Morocco but we have decided to wait until after the winter rains before commencing drilling in late Q2 2010. This will enable us to avoid the severe weather and consequent flooding which affected our campaign in the early part of this year. We also look forward to commissioning the new trunkline and signing up new customers to take the expected uplifted production levels in 2010."
Glossary
bopd - Barrels of oil per day
MMscfd - thousand cubic feet per day
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, development and production 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 is available on its website at www.circleoil.net