19th May 2009 07:00
19 May 2009
CIRCLE OIL PLC
("Circle" or the "Company")
Drilling Update
Discovery in Geyad-1X on NW Gemsa Concession, Egypt
Circle Oil plc (AIM: COP), the international oil and gas exploration and development company, is pleased to announce initial results from the Geyad-1X exploration well which has been successfully drilled in the onshore North West Gemsa Concession in Egypt.
Circle is delighted to confirm a discovery in the Kareem Formation sandstones with the well testing 40° API oil and gas at a sustained average combined rate from two pay zones of 2,809 bopd and 3.04 MMscfd using a 64/64" choke.
The total calculated net thickness of the two pay zones is approximately 29 feet. The upper
pay zone identified in the Kareem Shagar Formation is a net 10 feet thick and the lower pay zone in the Kareem Rahmi Formation is a net 19 feet thick. The lower Kareem Rahmi Formation zone has been tested at a sustained rate of 1174 bopd and 1.324 MMscfd. The upper Kareem Shagar Formation zone was not tested separately.
A full technical evaluation of all the results is underway to further assess the resource and to permit development planning. An assessment of reserves has not yet been completed. The well is currently being completed as a potential producer with a view to early production.
The rig, Mubarak -1 will now move to the Al Amir discovery to commence drilling the Al Amir SE-3 appraisal well.
The NW Gemsa concession covers an area of over 400 square kilometres and 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 Premier Oil plc (10% interest).
Commenting on this latest discovery, David Hough, CEO of Circle, said:
"This successful exploration well is yet more excellent news for Circle and we look forward to its near term appraisal and development. We can continue to be justifiably very happy with the results of the 2008-09 drilling programme as a result of which Circle is now gaining due recognition as a growing exploration and production company."
Glossary
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API
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American Petroleum Institute density scale
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Bopd
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Barrels of oil per day
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MMscfd
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Millions standard cubic feet per day
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In accordance with the guidelines of the AIM Market of the London Stock Exchange, Professor Chris Green, Chief Operating Officer of Circle Oil plc, an explorationist and geophysicist with over thirty years oil & gas industry experience, is a 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. In carrying out his review Professor Green has relied on information supplied by the operator.
For further information contact:
Circle Oil plc (+44 20 7638 9571)
David Hough, CEO
Collins Stewart Europe Limited (+44 20 7523 8350)
Adrian Hadden / Adam Cowen
Fox-Davies Capital (+44 20 7936 5230)
Daniel Fox-Davies
Citigate Dewe Rogerson (+44 20 7638 9571)
Martin Jackson / George Cazenove
Notes to Editors:
Circle Oil plc
Circle Oil plc (AIM: COP) is an international oil & gas exploration and production Company with an expanding portfolio of assets in Morocco, Tunisia, Oman, Egypt and Namibia 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 2 years and now has assets in the Rharb Basin, Morocco; the Ras Mamour Permit in southern Tunisia; the Mahdia Permit offshore Tunisia; the Grombalia Permit in northern Tunisia; the Zeit Bay area of Egypt and the Owambo Basin, Namibia. Circle also has the largest licence holding of any Company in Oman. In addition to its highly prospective Block 52 offshore, 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. 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 Oil is available on its website at www.circleoil.net
This information is provided by RNS, the company news service from the London Stock Exchange
Related Shares:
Circle Oil Plc