Circle Oil Plc Regulatory News (COP)

15 December 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 Amir SE Field Water Injection project and the Geyad-4 well (formerly Geyad-D) in the Geyad field.

Water Injection Al Amir SE Field

Water injection commenced successfully in the Al Amir SE field (AASE) on 27 September 2011 in the AASE-7X well in the Shagar and Rahmi sands and on 1 October 2011 in the AASE-8X well in the Rahmi sand. The combined water injection rate is currently approximately 10,000 bwpd and as of 14 December 2011 some 712,000 barrels have been injected.

Initial reservoir response to the water flooding operations has now been observed in the first line of producers namely the AASE-6 Shagar well and the AASE-4 Rahmi well.

Geyad-4 Well (previously Geyad-D)

Geyad-4 was spudded on 26 October 2011 and is located on the northern flank of the Geyad field, updip of the Geyad-2XST producer. The well's objective was to appraise both the Shagar and Rahmi sands for production in that location. The well was successfully drilled to a total depth of 6,890 ft MD into the Upper Rudeis Formation. The well encountered 2.5 ft of possible pay in the shallow South Gharib heavy oil reservoir before encountering a fault and was sidetracked twice to the southwest, closer to Geyad-2XST.

The Rahmi zone was penetrated in the second sidetrack in Geyad-4ST2, 100 ft higher than in the Geyad-2XST well, thus allowing better access to the Rahmi oil reserves. The Rahmi zone was perforated in the interval 6,340-6,395 ft and flowed oil and gas on test at an average rate of 397 bopd and 0.76 MMscf/d respectively, on a 24/64" choke. The Geyad-4ST2 well will be placed on production soon. Water injection is planned to commence shortly with the Geyad-5 well, drilled earlier this year, in the southwestern part of the field.

Following the successful completion of the Geyad-4 well, the rig has now been mobilised to drill the water injector well AASE-10, located in the central western downdip flank of the Al Amir SE field.The well is planned to appraise both the Shagar and Rahmi sands for injection in that location.

Al Ola-2

The previously tested Al Ola-2 well remains shut-in at this time as we await final Government approval for extending the Al Amir SE Development Lease to the south and west of the current lease boundary.

Production

Production from the Al Amir SE and Geyad fields averaged approximately 7,300 bopd (gross) through November 2011. Cumulative production from the NW Gemsa Concession has now exceeded 6.8 million barrels of 42 degree API Crude oil.

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. 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

"The successful side tracking of Geyad-4 and the first observation of a response to water injection in the Al Amir SE field moves the project further forward in line with our expectations and schedule. After just over two months of water injection we are beginning to see a response in the first line of producers. The rig has moved and is now spudding a well on the AASE-10 location intended as another injector for the Al Amir SE field as part of the overall plan to improve the productivity of the NW Gemsa accumulations."

Glossary

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.