Operating Update

10 August 2010

CIRCLE OIL PLC

("Circle" or the "Company")

Egypt Operating Update NW Gemsa Concession

Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, announces that the Al Amir 1-ST2 well, originally drilled in 2008, has been tested for production. The initial flow rate of 2 August 2010 was 278 bopd on a 128/64" choke using a sucker rod pump. The productive interval was perforated from 4,730-4,778 ft MD and consists of porous carbonates within the evaporitic sequence of the South Gharib Formation. The original DST of that zone conducted in 2008 produced up to 416 bopd of 16⁰API oil using nitrogen lift. Once the South Gharib production test and production engineering system is completed the well is planned to be put on production and the oil trucked to the Zeitco terminal.

The Al Ola X-1 exploration/appraisal well, spudded on 15 July 2010 and is targeted to the south of the southern boundary of the Al Amir SE development lease in order to appraise a southern extension to the Kareem accumulation of the field. The well, at 7,335 feet MD on 8 August 2010, will also be deepened to test a secondary objective in the Lower Rudies Formation, where oil and gas were recently tested in the Al Amir SE6 well, and is now expected to reach a total depth of 13,700 feet.

Current production from the Al Amir, Al Amir SE and Geyad fields in the NW Gemsa Concession is 9,200-9,500 bopd.

The NW Gemsa Concession, containing the Al Amir and Geyad Development Leases, covering an area of over 264 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. The North West Gemsa Concession partners include: Vegas Oil and Gas (50% interest and operator); Circle Oil Plc (40% interest); and Sea Dragon Energy (10% interest).

- End -

Glossary

bopd - barrels of oil per day

DST - Drill Stem Test

⁰ API - oil gravity in degrees standard of the American Petroleum Institute

MD - measured depth

In accordance with the guidelines of the AIM Market of the London Stock Exchange, Dr Stuart Harker, Vice President of Geology of Circle Oil Plc, an explorationist and geologist 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. Dr Harker 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)

Dr S Harker, VP Geology

Evolution Securities (+44 20 7071 4300)

Rob Collins

Chris Sim

Neil Elliot

Fox-Davies Capital (+44 20 7936 5230)

Daniel Fox-Davies

Philip Davies

David Porter

Citigate Dewe Rogerson (+44 20 7638 9571)

Martin Jackson

George Cazenove

Murray Consultants (+353 1 498 0320)

Joe Murray

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