25 Mar 2010 12:27
25 March 2010
CIRCLE OIL PLC
("Circle" or the "Company")
Al-Amir SE-5 well, NW Gemsa concession, Egypt in production
Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to announce that the Al-Amir SE-5 appraisal well has been successfully connected and has commenced production in the Al-Amir Development Lease in the onshore North West Gemsa Concession in Egypt.
The Al-Amir SE-5 well is producing at a rate of approximately 1500 Bopd through a 24/64" choke. The well is producing from the upper Kareem Shagar Sandstone pay zone which is 19 feet thick. The lower pay zone in the Kareem Rahmi Sandstone is 17.5 feet thick giving total pay zone thickness in Al-Amir SE-5 of 36.5 feet.
Overall adjusted daily production levels from the Al-Amir and the Geyad Development Leases have been choked back to minimize flaring, install new early facilities and maintain reservoir integrity. New stabilized production rates will be announced in due course. Cumulative oil production from the area since production began in late February 2009 is now over 1.7 MMbbls.
The partners have approved in principle the 2010 budget and work programme which in the Al-Amir SE field includes drilling two additional wells the Al-Amir SE-7 appraisal well and one water injection well. In the Geyad field the Geyad-3 development well is scheduled to be drilled during the third quarter. Existing field facilities will be augmented with additional storage capacity, flow line, pipe lines and manifolds. Geological and engineering studies will be carried out in preparation for water flooding to commence early in 2011. Exploration activities include reprocessing of existing seismic and the potential drilling of an exploratory well. Total expenditures for 2010 are estimated at $46 million with Circle's share being $18.4 million.
As a result of the additional development drilling and facilities expansion, total gross production from the concession is expected to exceed 10,000 Bopd by year-end.
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 North West Gemsa Concession partners include: Vegas Oil and Gas (50% interest and operator); Circle Oil Plc (40% interest); and Sea Dragon Energy (10% interest).
The rig is now drilling the Al-Amir SE-6 well, which was spudded on 14 March 2010 and is the fifth appraisal well in the Al-Amir SE discovery area, designed to reach a total depth of 14,000 feet. The primary target is again the Kareem Formation and the secondary objective is to assess the hydrocarbon potential of the Pre-Miocene Nubia sandstones. This well is presently at a depth of approximately 3,000 feet.
Commenting on this latest appraisal well in the NW Gemsa Concession, David Hough, CEO of Circle, said:
"We are delighted with the successful hook up of the Al-Amir SE-5 well. The partners are now agreed on the 2010 budget and the way forward for the future which will see both a stable and increasing revenue stream for all partners".
Glossary
Bopd - Barrels of oil per day
MMbbls - Millions of barrels of oil
In accordance with the guidelines of the AIM Market of the London Stock Exchange, Professor Chris Green, Chief Operating Officer of Circle Oil plc, an explorationist and geophysicist with over thirty years oil & gas industry 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. Professor Green has relied on primary information supplied by the operator in carrying out his review.
For further information contact:
Circle Oil Plc (+44 20 7638 9571
David Hough, CEO
Evolution Securities (+44 20 7071 4300)
Rob Collins
Chris Sim
Neil Elliot
Fox-Davies Capital (+44 20 7936 5230)
Daniel Fox-Davies
Citigate Dewe Rogerson (+44 20 7638 9571)
Martin Jackson / George Cazenove
Murray Consultants (+353 1 498 0320)
Joe Murray
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 Marmour 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.