5 Sep 2011 07:00
5 September 2011
Circle Oil Plc
("Circle" or the "Company")
Operational Update 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 Blocks 49 and 52 in Oman.
Block 49
Circle is pleased to confirm that the Ministry of Oil and Gas, Oman has granted an extension to the exploration period for our onshore Block 49 now ending 26 December 2012. Within this time frame, Circle will be required to complete an additional 2,500 line kilometresof closely spaced 2D seismic survey and drill one exploration well. The seismic programme is to be acquired in the south-eastern part of the permit, north-east of and adjacent to the 3D survey which was completed in 2010. This survey is intended to provide a better understanding of the whole southern permit area, and outline potential additional drilling targets. It will complement the existing dataset, and cover an area with sparse coverage of legacy 2D lines. Acquisition parameters for the survey will draw on the experience obtained during the acquisition and processing of the 3D survey.
Block 49, covering an area of over 15,438 square kilometres, lies about 700 kilometres south-west of Muscat in a relatively unexplored area of Southern Oman. The concession agreement includes the right of conversion to a production licence of 30 years in the event of commercial discoveries. Circle Oil Oman Ltd is the operator of Block 49 with a 100% working interest.
Block 52
The processing of the 5,026 line kilometres of marine 2D seismic, recorded from December 2010 to February 2011, has been completed. The processed data received to date are of a significantly improved quality over the historic seismic data. Interpretations have confirmed the presence of multiple structures and potential targets for exploration drilling. As result a farm-out process has recently been initiated using both internal data rooms and an external agency. The farm-out process is aimed at seeking a partner(s) to drill a commitment well in Block 52 within the next 18 months.
Circle's interpretations detailed in the farmout package in Block 52 have identified several promising play types in stratigraphy ranging in age from Pre-Cambrian to Tertiary, but the offshore Outer Sawquirah Area of Late Cretaceous to Palaeogene structural closures is considered the most prospective.
The identified principal reservoir intervals are Palaeogene Hadhramaut carbonates and clastics and late Cretaceous Aruma Group carbonates. Potential source rocks are considered to be Lower Hadhramaut and Aruma shales with additional potential in the basinal Jurassic Sahtan Group and the Infra-Cambrian Huqf Super Group. Sealing units for potential traps are provided by extensive shale units of the Fars, Hadhramaut and Aruma groups.
Nine large four way dip closed prospects are recognised in the Outer Sawqirah Area. Internal pre-drill deterministic STOIIP of these nine prospects for the most likely unrisked case is calculated as 7,264 MMBO. The associated ultimate recoverable resources for the nine prospects are estimated internally as 2,179 MMBO.
The water depths for proposed drilling locations on the nine prospects range from 724 to 956 m and target depths range from 1,490 to 2,850 m. The largest individual prospect, presently designated as Prospect A1, is situated in a water depth of approximately 769 m, with an internally estimated deterministic most likely STOIIP of 2,435 MMBO and associated most likely ultimate recoverable resources of 731 MMBO, with depth to top target at 1,490 m.
The Company would emphasize the point that the pre-drill deterministic estimates of STOIIP and resources are based on the information and interpretations available at time of issue and are made based on Circle's management deterministic best estimates. There can be no assurance that such estimates will prove to be accurate as future technical evaluations and results, including drilling results, could lead to variations or differ materially from those indicated in this release.
As expected, further exploration work is necessary and the Company is now seeking partners to join in this effort. Further announcements will be made in due course.
Block 52, covering an area of over 63,460 square kilometres, lies about 500 kilometres SSW of Muscat in an underexplored area of offshore Southern Oman. The concession agreement includes the right of conversion to a production licence of 30 years in the event of commercial discoveries. Circle Oil Oman Offshore Ltd is the operator of Block 52 with a 100% working interest.
Commenting Prof. Chris Green, CEO, said:
"The granting of the extension for Block 49 will allow Circle to further evaluate drilling opportunities within the southern area of the permit. In Block 52, the new seismic is of excellent quality and multiple closures, including some leads we mapped previously, have been firmed up as prospects. The interpretations coming from Block 52 seismic have allowed us to prepare a comprehensive farm-out package."
Glossary
2D Two dimensional
3D Three dimensional
m metres
MMBO Millions of barrels of oil
STOIIP Stock tank oil initially in place
SSW South south west
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, and Dr Stuart Harker, VP Geology, also with over 30 years experience, are the qualified persons as defined in the London Stock Exchange's Guidance Note for Mining and Oil and Gas companies, who have reviewed and approved the technical information contained in this announcement.
For further information contact:
Circle Oil Plc (+44 20 7638 9571)Professor Chris Green, CEO
Evolution Securities (+44 20 7071 4300)Chris SimNeil Elliot
Fox-Davies Capital (+44 20 3463 5010)Daniel Fox-Davies
Richard Hail
Citigate Dewe Rogerson (+44 20 7638 9571)Martin JacksonKate Lehane
Murray Consultants (+353 1 498 0300)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 two 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 its prospective Block 52 offshore, the Company also has an ongoing exploration programme in Block 49 onshore.
The Company's strategy is to locate and secure additional licences 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.