22 Nov 2010 12:57
22 November 2010
Circle Oil Plc
("Circle" or the "Company")
Operational Update Egypt, Oman and Tunisia
Circle Oil (AIM: COP) the international oil and gas exploration, development and production company is pleased to announce the following operational update on its activities in Egypt, Oman and Tunisia.
·; Positive result from sixth appraisal well in Al Amir SE discovery area as flow rates of 1,575 bopd and 1.65MMscfd of gas are achieved
·; Further potential extension found to previously discovered Lower Rudeis Formation oil and gas which will be subject to further evaluation in future wells
·; 2D Seismic programme of 5,000km offshore Oman to commence on schedule in December and conclude in January
·; Circle proceeding with plans to increase holding in Tunisian Grombalia Permit - Drilling on target for early 2011
Egypt - NW Gemsa Development Lease
The exploration/appraisal well Al Ola-1X reached TD at 14,323ft in the Lower Rudeis, following drilling through the Kareem Formation. Log analysis has shown both sand units of the Kareem Formation to be oil bearing with no indication of the OWC. Formation pressure testing showed some limited communication with the updip Al Amir SE producers and the well has proven up the southern Al Amir SE field extension in the Al Ola area. The Top Shagar was encountered at 9,731ft MD with 6ft of net pay and Top Rahmi at 9,782ft MD with 19ft of net pay (operator figures). The oil column is presently down to the base Rahmi Sand at 9,802ft MD (9,719ft SS).
Circle is delighted to confirm that, on initial testing at clean up, the Kareem Rahmi Formation Sandstones flowed 42° API oil at an average rate of 1,575 bopd and 1.65 MMscfd of gas using a 32/64" choke from the lower of the two identified pay zones in the interval 9,780ft MD to 9,800ft MD.
The well, which is the sixth appraisal well to be drilled in the Al Amir SE discovery area, was shut in for a pressure build up and later placed on stream at an initial rate of 1,500bopd and 1.6MMscf/d of gas using a 32/64" choke.
The secondary target in the Lower Rudeis Formation was encountered with two hydrocarbon bearing intervals from 13,425ft MD to13,460ft MD and 13,510ft MD to13,540ft MD. This occurrence proves up the extension of the Lower Rudeis accumulation in the Al Amir SE-6X well, located 3.6 kilometres to the northwest. Due to repeated and multiple mechanical problems, final testing of the Lower Rudeis intervals could not be completed. Further appraisal of the Lower Rudeis is to be undertaken with future wells.
The next well to be drilled is Al Amir SE-7X, to be located to the west of the Al Amir SE-4X well. This well is intended to be a water injector for the Kareem sands, but is presently planned to be deepened to evaluate the Lower Rudeis potential.
Until water injection is installed and proven effective in the Al Amir SE field, it is planned to reduce the NW Gemsa production rate as part of good field management practice. Gross production from the Al Amir SE and Geyad fields, for an interim period, is expected to be 7,000-8,000 bopd after which oil production levels will be systematically and incrementally increased together with the planned gas production.
The NW Gemsa Concession, containing the Al Amir and Geyad Development Leases, covering an area of over 264 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).
Oman - Block 52
We have been informed by the appointed contractor BGP that the seismic vessel contracted to undertake the Block 52 2D seismic survey is scheduled to arrive in Muscat on 25 November 2010. Following pre-survey testing the vessel will sail to site to commence the acquisition of 5,000 kms of full fold 2D seismic data. Acquisition will be undertaken though December 2010 with the survey finishing in January 2011.
Tunisia - Grombalia Permit
Planning for the commitment well to be drilled early 2011 is advanced and long lead drilling materials have been ordered. In line with the agreement with its partner Exxoil, Circle has commenced the process to increase its working interest from 15% to 36%. The Partnership are presently finalising technical studies to decide the final drilling location by the end of this year.
Commenting Prof. Chris Green, CEO, said:
"Al Ola -1X has once again proven up the Kareem sands and importantly proven up the field extension in the south. This ultimately is expected to have a positive impact on total reserve numbers. We will now start water injection support drilling whilst at the same time further evaluating the Lower Rudeis potential. Planning and execution will now be concentrated on good field management and development with a view to the optimisation of resources and production together with the commencement of gas production.
Block 52 seismic acquisition will be starting up at the end of the month and Tunisia will be featuring in the operational work schedule in first quarter 2011."
Glossary
bopd barrels of oil per day
ft Feet
kms Kilometres
MD Measured Depth
MMscfd Million standard cubic feet per day
OWC Oil-water contact
SS Sub-sea depth
2D Two dimensional
3D Three dimensional
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, 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)Professor Chris Green, CEO
Evolution Securities (+44 20 7071 4300)Rob CollinsChris SimNeil Elliot
Fox-Davies Capital (+44 20 7936 5230)Phillip Davies
David Porter
Citigate Dewe Rogerson (+44 20 7638 9571)Martin JacksonGeorge Cazenove
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 with an expanding portfolio of assets in Morocco, Tunisia, Oman and Egypt, with a combination of producing, low-risk near-term production and acreage with significant upside exploration 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; and the Zeit Bay area of Egypt. Circle also has the largest licence holding of any Company in Oman. In addition to offshore Block 52, 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. Circle may use its own expertise to appraise reserves and bring assets into production, generating sustained cash flow for further investment. In addition it may seek farm-outs to selected partners who would then invest in the exploration and continue through to the development of the assets for production.
Further information on Circle is available on its website at www.circleoil.net.