28 Dec 2012 07:00
28 December 2012
Circle Oil Plc
("Circle" or the "Company")
Operating Update Tunisia
Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to announce the following update regarding operations in its Grombalia Permit.
The Bou Argoub-1 (BAB-1) exploration well in the South West Belli area of the Grombalia Permit, near to the Belli, El Manzah, and Beni Khaled fields commenced drilling on 30 October 2012. The target for the well was a fault-bounded structural culmination crossing two vertically stacked fractured carbonate reservoirs, the Eocene Bou Dabbous Formation and the Late Cretaceous Abiod Formation. These are the main oil-producing formations in the north-eastern part of Tunisia. BAB-1 reached a total depth of 1,520 metres in the Abiod formation and was completed on budget.
The expected Bou Dabbous reservoir rock was encountered from 1,109.5 to 1,199.5 metres MD with gas and oil shows detected in the finely crystalline limestones with calcite filled micro fractures. The second target formation the Abiod was encountered from 1,432.5 to 1,520 metres MD, consisting of hard crystalline limestones with weak oil and gas shows. The indications of hydrocarbons in the Bou Dabbous Formation were encouraging, though following the receipt of full log analysis results from the service company the limestones at this location were shown to have insufficient reservoir quality and hydrocarbon saturation to produce hydrocarbons at commercial rates.
The well will now be plugged and the results integrated with existing seismic and well information to improve evaluation for future work on the Grombalia block.
Following completion of BAB-1, the rig will be moved south to the Ras Marmour Permit in preparation to drill the Sedouikech commitment exploration well. This well has an expected total depth of 2,350 metres and is targeting the Early Cretaceous Lower Meloussi sands, productive in the nearby Robanna and Mazrane Fields.
Further updates will be made in due course.
Prof Chris Green, CEO of Circle, said:
"We have encountered a good thickness of reservoir rock showing the presence of hydrocarbons in the Bou Dabbous formation. This is a proven hydrocarbon producing area with both current and historic production in production licences within and around the concession. Reservoir quality and hydrocarbon saturation is known to vary across the acreage. As a result, the upside prospectivity of future targets remains."
Glossary
MD Measured depth
The Grombalia Permit covers an area of 2,792 square kilometres. The partners include Exxoil Tunisie Ltd (64% working interest and operator) and Circle (36% working interest).
The Ras Marmour Permit covers an area of 1,604 square kilometres. The partners include Exxoil Tunisie Ltd (77% working interest and operator) and Circle (23% working interest).
In accordance with the guidelines of the AIM Market of the London Stock Exchange, Dr Stuart Harker, VP Geology, with over 30 years experience, is the 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. Dr Harker has relied on primary information supplied by the operator in conducting his review.
For further information contact:
Circle Oil Plc (+44 20 7638 9571)
Professor Chris Green, CEO
Investec (+44 20 7597 5970)Chris SimNeil Elliot
Liberum Capital Limited (+44 20 3100 2222)Simon Atkinson
Citigate Dewe Rogerson (+44 20 7638 9571)Martin JacksonJack Rich
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 holding a portfolio of assets in Morocco, Tunisia, Oman, and Egypt with a combination of low-risk, near-term production, and significant upside exploration potential. The Company listed on AIM in October 2004.
Internationally, the Company has continued to expand its portfolio over the past 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 licensed acreage of any company in Oman. In addition to its prospective Block 52 offshore, Circle 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 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.