Circle Oil Plc Regulatory News (COP)

16 December 2013

Circle Oil Plc

("Circle" or the "Company")

Operations Update

Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to announce the following update regarding its operations.

Tunisia

The Company recently announced the award of the Grombalia permit, following a competitive bid process. As stated in the announcement, Circle will be the operator and hold a 100% working interest in the new licence and has the right to apply for conversion to production licence areas in the event of exploration success.

The permit covers an area that includes existing oil and gas field concessions and Circle has identified multiple prospects and many leads having similar geological features to known accumulations.

The farm-in in to the Beni Khalled and increased interest in the offshore Mahdia Permit announced earlier this year, have now been ratified by the Tunisian authorities. The Ras Marmour commitment well is still awaiting its final permit to drill.

Planning has progressed for the offshore Mahdia commitment well, with the recruitment of an offshore drilling manager in September this year. Long lead items have been ordered, the Environmental Impact Study completed and the Offshore Site Survey has been tendered. Logistic support plans have been completed and the Company is actively negotiating for a drilling unit. Expressions of interest have been received regarding farming in to the prospect and these are being pursued.

Egypt

Operations have continued on the NW Gemsa Permit with current gross production of approximately 11,100 bopd and 11.8 MMscf/d of gas giving total gross daily production of 13,150 boepd. Cumulative production to date is 13.7 MMbo and 3.4 bcf of gas giving at total cumulative production of 14.3 MMboe.

Plans for 2014 include the drilling of a limited number of water wells, injectors and producers to maintain oilfield performance at current levels as well as the updating of reservoir models. Overall, the strategy remains to manage the field in line with balancing current production levels, whilst optimising long-term recovery using monitoring and advanced reservoir modelling. As previously advised, overall capital expenditure in 2014 will reduce again compared with the previous two years as the field moves closer to maturity.

The recent AASE-15 well, located in the North West area of the Al Amir SE (AASE) field, was sidetracked for geological reasons. The well encountered 16 feet of net oil pay in the Rahmi sand and has been completed first as a producer (perforations 10,094-10,120 feet MD) and will later be converted to a water injection well for the Rahmi sand to support updip production in this western part of the field. The well will be put on production shortly and the results will be reported in a subsequent update. The rig has been moved to the North Eastern part of the AASE field to drill well AASE-19, planned as a Shagar producer.

Receipts from EGPC for the year are expected to be in-line with our forecast and are also expected to be higher than those in 2012. On the back of increased gross production levels of 3.75MMbo for 2013 up from 3.16MMbo for 2012, receivables due at year-end are forecast to be lower than those at previous year end.

Oman

In Oman, the Company has bid for an onshore Block in the 2013 bid round and expects to be in a position to update the market on the outcome of this process early in 2014.

Block 49

In Block 49, the Company expects to drill one exploration well in the first half of 2014. The requisite drilling rig tender documents have been submitted and a well location has now been agreed. The well will target a potential shallow stratigraphic prospect with a seismic anomaly in the Haushi sands and is regarded as high risk with a GCOS 10-12%.

Block 52

The 2013 2D inshore marine seismic was tendered and awarded and the vessel is presently expected on site early Q1 2014. The acquisition programme will target the three identified inshore prospects to delineate and rank them for drilling. The farm-out process continues and, at present, two companies are evaluating the data. In the event of an unsuccessful farm-out the Company will consider, as an option, drilling one of the inshore prospects sole risk.

Morocco

Production has continued throughout H2 of 2013 in line with expectations in the region 6.8-7.0 MMscf/d gross, fulfilling existing commercial contracts.

The second half of the year has seen the installation of a 9.4 kilometre extension to the 8-inch pipeline which was completed last year. This extension will allow hooking in of the remaining existing wells into the infrastructure and also assist in early hook up for some of the new wells from the upcoming drilling campaign, if successful. This will enable the Company to further utilize existing capacity in its pipeline.

All material and consumables for the first six wells of the drilling programme are onsite with the first drill-sites ready and support contracts for wireline services and testing are in place. The drilling rig to be utilized for the drilling is on block and undergoing checking and maintenance prior to commencement of drilling.

As previously indicated the drilling programme which will target prospects in both the Sebou and Lalla Mimouna permits is aimed at adding approximately 30 bcf to the reserve base. The programme will involve drilling some 12 wells and two workovers and the redrill of the KAB-1 target which suffered hole collapse prior to testing. Drilling is expected to commence within the next few weeks, subject to completion of the preparatory works described above.

Commenting Prof Chris Green, CEO, said:

"2014 will be a very active year operationally with substantial drilling activity in all our areas of operation. Exploration drilling in Morocco, onshore and offshore Tunisia, onshore Oman and development drilling in Egypt will be augmented with work on the new Beni Khalled permit.

The recently announced new permit in Grombalia, Tunisia creates further potential for very significant upside and we await the result of the Omani bid round."

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. Professor Green and Dr Harker have relied on primary information supplied by the operator in carrying out their review.

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 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 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, Circle also has an ongoing exploration programme in Block 49 onshore.

Circle'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. 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