1 Dec 2008 07:00
01 December 2008
CIRCLE OIL PLC
("Circle" or the "Company")
OPERATING UPDATE
Morocco and Tunisia
Circle Oil Plc (AIM: COP), the international oil and gas exploration and development company, today announced the following operating update.
Morocco
Sebou Permit; Discovery
The exploration well CGD-9 has been drilled, logged and successfully tested in the Sebou Permit, Morocco.
The Company confirms a discovery in the Lower Guebbas Formation with the well testing gas at a sustained rate of 8.86MMscfd. The well has been completed as a potential producer. A full technical evaluation of all the results of the well is underway which will allow for forward planning as a precursor to further assessment of the resource, including conducting an extended well test and a more complete estimation of the reserves.
The drilling rig has now moved to the next drilling location on this permit to commence drilling of the KSR-8 well, the third of a planned six well drilling programme in the area.
The Sebou Permit (Circle Oil 75% working interest, ONHYM 25%) lies north-east of Rabat in the Rharb Basin, Morocco. The Rharb Basin is a foredeep Basin located in the external zone of the Rif Folded belt. The concession agreement includes the right of conversion to a production licence of 30 years, plus extensions, in the event of commercial discoveries.
Ouled N'Zala Concession; Commerciality indicated on second well
Planning for the extended well test on the ONZ-6 discovery, which flowed under test at a sustained rate of 3.32MMscfd, is well advanced and initial analysis of the results from the well testing indicates it is likely to be commercial. The final Reserve estimation will not be known until completion and analysis of the extended well test.
The ONZ-4 well which was scheduled to go into production in mid September is now in continuous production at a rate of approximately 1.5MMscfd. Following the initial start-up, problems with the main pipeline infrastructure occurred and these have now been resolved.
All of the gas produced in the Rharb Basin is sold locally and there is substantial demand for additional gas supplies in the area.
Tunisia
Grombalia Permit; Serdouk exploration well
The Serdouk exploration well has been completed and logged to the targets in the Bou Dabbous and Abiod formations with a target depth of 1620 metres. The well confirmed the prospect stratigraphy and structure but no oil shows were encountered. Logging and sampling indicates a lack of permeability leaving the formations "tight". The well has been plugged and abandoned.
David Hough, CEO of Circle, said:
"The second consecutive discovery in our drilling campaign in Morocco is more excellent news for Circle. The well has been completed as a potential producer and the initial field test results are above our expectations for this area. The flow rates under test are amongst the best since drilling began in the Rharb. The results to date show that we are definitely benefiting from the additional information provided by the 3D seismic and the advanced quantitative techniques we are employing to achieve success.
Overall, we are extremely pleased with the success of our drilling programme to date and look forward to the result of the next well."
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 company with an expanding portfolio of assets in the Middle East and North Africa, with a combination of low-risk production in Morocco and significant development and exploration upside potential in Morocco, Tunisia, Oman, Egypt and Namibia. 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 including gas production; the Ras Mamour Permit in southern Tunisia; the Mahdia Permit offshore Tunisia; the Grombalia Permit in northern Tunisia; the Zeit Bay area of Egypt where it has had a recent oil discovery 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 Oil is available on its website - www.circleoil.net