4 Feb 2010 07:00
4th February 2010
CIRCLE OIL PLC
("Circle" or the "Company")
Operational Update - Egypt
Production commences from Geyad-2X ST1
Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to announce that the Geyad-2X ST1 well has commenced production in the onshore NW Gemsa Concession in Egypt.
Production has started from the upper of the two identified pay zones in the Kareem Shagar Sandstone. The lower untested pay zone, in the Kareem Rahmi Sandstone, will be further evaluated at a later date.
The Geyad-2X ST1 well is producing at a rate of approximately 2100 Bopd. Overall, adjusted daily production from the Al Amir Development Lease and the two Geyad wells is now over 9200 Bopd. Cumulative oil production from the area since production began in late February 2009 is now over 1.3MMbbls.
The NW Gemsa Concession, containing the Al Amir Development Lease and 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).
The rig is now drilling the Al-Amir SE-5 well where, as previously announced, the primary target is the Kareem Formation. This well is being drilled primarily to delineate a potential reservoir boundary.
David Hough, CEO of Circle said:
''We are obviously delighted to be able to announce that Geyad-2 is in production and that daily production from the concession has climbed to over 9200 Bopd. We are now resuming our drilling programme in the Al Amir area where the next well, Al Amir SE-5, is being drilled for reservoir delineation purposes.''
Glossary
Bopd - Barrels of oil per day
MMbbls - Millions of barrels
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
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.