28 Feb 2012 07:00
28 February 2012
Circle Oil Plc
("Circle" or the "Company")
Updated CPR
Resources Upgraded to Reserve Status
Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to announce that the 2012 Competent Persons Report (CPR) has recently been completed by Bayphase Ltd, an independent consultancy specialising in petroleum and gas reservoir evaluation, resulting in a highly significant upgrade of 30% to the 2P recoverable reserves of oil and gas from the 2011 estimates of ultimate recoverable resources reflecting the success of the Company's development activities throughout 2011.
2P Gross Initial Reserves for the Egyptian NW Gemsa and Moroccan Sebou onshore concessions are estimated at 53.36 MMboe (23.09 MMboe net to Circle) equating to a 12.18 MMboe gross increase from the 2011 estimate. 2P Gross Remaining Reserves, which accounts for production to date, are estimated to be 47.60 MMboe (20.69 MMboe net to Circle).
Egypt
The new resource estimates take account of the results of the drilling and development activity up to the Geyad-4 and Geyad-5 wells.
In the NW Gemsa Concession, 2P Gross Initial Oil Reserves are estimated to be 40.40 MMbo and the 2P Gross Initial Raw Gas Reserves are estimated to be 45.34 Bscf. This totals a 2P Gross Initial Reserves value of 48.21 MMboe (19.28 MMboe net to Circle). This is 34% higher than the P50 estimate of 35.9 MMboe of Ultimate Recoverable Resources announced in 2011. The principal reasons for this increase are:
1. the deepening of the oil-water contact by more than 260 feet (as demonstrated by the recent wells Al Amir SE-7X and Al Ola-2X), which has resulted in an increase in the estimate of the volume of oil in place; and
2. the improved recovery efficiency resulting from the successful water injection programme that has increased the pressures in producing wells.
Following production of 6.95 MMbo through to the end of 2011, the 2P Gross Remaining Reserves are estimated to be 42.79 MMboe of oil, gas and recoverable liquids (17.11 MMboe net to Circle).
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).
2012 ON BLOCK INITIAL RESERVES (MMBOE)* | 2011 ON BLOCK INITIAL URR (MMBOE)** | ||||||||
Field Formation | 2P | REC. FAC. | 3P | REC. FAC. | Field Formation | MOST LIKELY | REC. FAC. | UPSIDE | REC. FAC. |
AL AMIR SE KAREEM | 42.9 | 45% | 59.61 | 50% | AL AMIR SE KAREEM | 31.3 | 40% | 45.1 | 50% |
GEYAD KAREEM | 5.31 | 45% | 7.6 | 50% | GEYAD KAREEM | 3.2 | 45% | 6.1 | 50% |
AL AMIR SOUTH GHARIB | 1.4 | 17.50% | 3.3 | 25% | |||||
GROSS TOTAL | 48.21 | 67.21 | GROSS TOTAL | 35.9 | 54.5 | ||||
NET TOTAL | 19.284 | 26.884 | NET TOTAL | 14.36 | 21.8 | ||||
CONTINGENT RESOURCES | PROSPECTIVE RESOURCES | ||||||||
AL AMIR SOUTH GHARIB | 1.67 | 17.5.% | 3.49 | 25% | AL AMIR KAREEM | 3.9 | 27.50% | 9.3 | 40% |
NET | 0.668 | 1.396 | NET | 1.56 | 3.72 | ||||
* ECONOMIC CUT-OFF APPLIED AND INCLUDES 6.95 MMBO PRODUCED TO END 2011 | ** NO ECONOMIC CUT-OFF APPLIED AND INCLUDES 4.1 MMBO PRODUCED TO END 2010 | ||||||||
The NW Gemsa Concession, containing the Al Amir and Geyad Development Leases, 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.
Morocco
The new reserve estimates take account of the results of the drilling and development activity up to ADD-1 well.
In the Sebou concession, the 2P value of Gross Initial Gas Reserves is 29.88 Bscf (5.15 MMboe) (22.11 Bscf (3.81 MMboe) net to Circle). This is very close to the P50 value of 30.62 Bscf of Ultimate Recoverable Resources announced in 2011. Following production of 1.93 Bscf through to end 2011, the 2P Gross Remaining Reserves are estimated to be 27.95 Bscf (4.81 MMboe) (20.79 Bscf (3.58 MMboe) net to Circle).
In the Sebou concession, Circle has a 75% share and ONHYM, the Moroccan State oil company, has a 25% share. In the Oulad N'zala concession, Circle has a 60% share and ONHYM has a 40% share. Both concessions include the right of conversion to a production licence of 25 years, plus extensions in the event of commercial discoveries.
2012 ON BLOCK INITIAL RESERVES (Bscf)# | 2011 ON BLOCK INITIAL URR (Bscf)## | ||||||||
Concession | 2P | REC. FAC. | 3P | REC. FAC. | Concession | MOST LIKELY | REC. FAC. | UPSIDE | REC. FAC. |
SEBOU + OULAD N'ZALA GROSS | 29.88 | 70-87% | 42.68 | 80-95% | SEBOU + OULAD N'ZALA GROSS | 30.6 | 70-87.5% | 41.7 | 80-95% |
NET | 22.11 | 31.62 | NET | 23 | 31.3 | ||||
# ECONOMIC CUT-OFF APPLIED AND INCLUDES 1.93 Bscf PRODUCED To END 2011 | ## NO ECONOMIC CUT-OFF APPLIED AND EXCLUDES 1.5 Bscf GAS PRODUCED AND REMAINING TO BE PRODUCED FROM ONZ-4 AND ONZ-6 AT END 2010 | ||||||||
The Sebou permit lies to the north-east of Rabat in the Rharb Basin in Morocco. The Rharb Basin is a foredeep basin located in the external zone of the Rif Folded belt.
Commenting Prof Chris Green, CEO, said:
"We are delighted with the 30% increase in reserves following the 2012 CPR. The upgrading of our resources to reserves rewards the successful development work undertaken by Circle. This is a confirmation that there is potential in developing our discovered resources through diligent development and effective asset management. We continue our efforts to maximise both our daily production and level of recovery."
Glossary
2P/P50 | Probability of success 50%
|
3P | Probability of success 10%
|
Bscf | billion standard cubic feet
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MMbo | million barrels of oil
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MMboe | million barrels of oil equivalent
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URR | Ultimate Recoverable Resources
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The estimates in the report use the Petroleum Resources Management System ("PRMS") sponsored by SPE/WPC/AAPG/SPEE and are set out in the tables below together with further explanation of the results
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.
For further information contact:
Circle Oil Plc (+44 20 7638 9571)
Professor Chris Green, CEO
Evolution Securities (+44 20 7071 4300)
Chris Sim
Neil Elliot
Fox-Davies Capital (+44 20 3463 5010)
Daniel Fox-Davies
Richard Hail
Citigate Dewe Rogerson (+44 20 7638 9571)
Martin Jackson
Kate Lehane
Murray Consultants (+353 1 498 0300)
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 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.