18 Oct 2010 07:00
18 October 2010
Circle Oil Plc
("Circle" or the "Company")
Operational Update Egypt, Morocco and Oman
Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company is pleased to announce the following operational update on its activities in the NW Gemsa Development Lease, onshore Gulf of Suez, Egypt, the Sebou Permit, onshore Morocco and Blocks 49 onshore and 52 offshore, Oman.
Egypt - N W Gemsa Development Lease
Preparations for the testing of the Lower Rudeis in the exploration/appraisal well Al Ola-1X are in their final stages with two intervals from 13,425-13,460 feet MD and 13,510-13,540 feet MD to be tested together. The test is intended to prove up the extension of the occurrence of the Lower Rudeis accumulation which found hydrocarbon bearing sands in the Al Amir SE-6X well, located 3.6 kilometres to the northwest. Once completed it is then planned to test the main oil bearing zones of the overlying Kareem sandstone. Further announcements on the results of the well will be made following completion of the Lower Rudeis section and then again after testing of the Kareem Formation.
Current gross production from the Al Amir, Al Amir SE and Geyad fields in the NW Gemsa Concession ranges from 9,000 to 9,500 bopd.
The NW Gemsa Concession, containing the Al Amir and Geyad Development Leases, covering an area of over 264 square kilometres, lies approximately 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 with a 20 year term, 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).
Morocco - Sebou Permit
The exploration well KAB-1 has been drilled and reached a TD of 1,400 metres MD in the Guebbas unit. Significant gas shows were observed at expected levels during the drilling of the well and wireline logging and pressure sampling tools were prepared for formation evaluation. In reaching TD, multiple drilling problems were encountered and hole integrity could not be maintained, thus the open hole logging programme could not be completed. The well has been suspended with a view to completing future well work to fully evaluate the gas producing potential of the KAB prospect.
The rig was then mobilised to drill the second well of the 2010 programme at CGD-11. The well has now reached TD at 1,171 metres MD and has encountered multiple significant gas shows at four levels. The open hole logging and pressure sampling has been successfully completed and the well is being prepared to perforate and test three levels in the Upper Guebbas (3 feet net sand) , Guebbas (12 feet net sand) and Hoot Formations (18.7 feet net sand) thus totalling 33.7 feet net sand. A fourth level (1.7 feet net sand) in the overlying Gaddari will be left for testing and potential production at a later date. A further announcement will be made once testing is completed.
The Sebou Concession, containing the KSR and CGD gas discoveries, covers an area of over 212.7 square kilometres, lying approximately 60 kilometres northeast of the coastal town of Kenitra, in a partially unexplored area of the Rharb Basin. The concession agreement includes the right of conversion to a production licence with a 25 year term, plus extensions, in the event of commercial discoveries. The Sebou Concession partners are: Circle Oil Plc (75% interest and operator) and ONHYM (25% interest).
Oman Block 49
The Company has received the first preliminary data set of the stacked data using first pass velocity models and a preliminary post stack migration. Full enhanced 3D velocity modeling and prestack migration processing is now underway and will continue over the next few months and we are pleased to confirm that "first look" at the preliminary dataset indicates the features consistent with the presence of the Ara Salt Formation together with interpretable internal structures.
Oman Block 52
The Company still expects the seismic vessel to arrive in mid - November 2010. Thus the 5,000 kilometres of 2D marine seismic, to be shot to firm up identified leads into firm prospects, is presently expected to commence on schedule.
Commenting Prof. Chris Green, CEO, said:
"In NW Gemsa, the testing of the Lower Rudeis sands in the Al Ola-1X well is imminent as we seek to gain further information towards understanding the extent of this hydrocarbon accumulation. We can then look forward to the testing of the Kareem sands and the likely confirmation of the further extension of the Al Amir SE field at the Kareem level.
In Morocco, drilling problems with swelling clays have presently prevented full evaluation of the gas shows observed in the KAB-1 well. However, we plan to return to properly evaluate the gas shows we encountered in the KAB prospect following an analysis of remedial options. We decided to immediately continue the drilling programme with CGD-11 which has been successfully drilled and logged and is now being prepared for testing.
In Oman, programmes continue on schedule in both Blocks 49 and 52 and we are pleased to be able to see first indications of features consistent with the presence of the Ara Salt Formation on the 3D seismic data.
Glossary
bopd barrels of oil per day
MD Measured depth
OHNYM Office National des Hydrocarbures et des Mines
TD Target 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 Collins Chris Sim Neil Elliot
Fox-Davies Capital (+44 20 7936 5230) Daniel Fox-Davies
Philip Davies
Citigate Dewe Rogerson (+44 20 7638 9571) Martin Jackson George Cazenove
Murray Consultants (+353 1 498 0320) Joe Murray Joe 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.