Circle Oil PLC Operating Update Morocco (3870A)

TIDMCOP

RNS Number : 3870A

Circle Oil PLC

22 December 2014

22 December 2014

Circle Oil Plc

("Circle" or the "Company")

Operating Update Morocco

Morocco Sebou Permit - Discovery Exploration Well KSR-12

Circle Oil Plc (AIM: COP), the Middle East and North Africa focused oil and gas exploration, development and production company, is pleased to announce a significant gas discovery following the preliminary results of drilling of the well KSR-12 in the Sebou Permit, onshore Morocco.

The well is located within the central area of the Sebou Permit, about 1.2 kilometres to the south-west of the KSR gas gathering station. The well was drilled to a TD of 1,980 metres MD. Gas shows, which were confirmed by wireline logging, were encountered at two different levels within the objective Hoot sands.

The net gas pay encountered in the well from wireline log analysis is 19.5 metres in the main target Intra Hoot sands and 1 metre in the Upper Hoot. This is greater than pre-drill sand thickness expectation. Pressure testing showed that the Upper and Intra Hoot sands are not connected to the Hoot sands in the other nearby KSR wells. The seven inch liner was run and cemented and the first test over the primary target Main Hoot sands flowed at a sustained rate of 8.09MMscf/d on a 20/64" choke over 8 hours with no decrease in well head pressure. The second test over the Upper Hoot sands produced at a stabilised rate of 2.32MMscf/d on a 9/64"choke over 10 hours. The well will be completed for future production in the Main Hoot sands and the Upper Hoot will be completed for production once the Main Hoot gas sands have been depleted.

A new rig has been transported to Morocco but due to recent heavy rains affecting access roads into the drill site area in Lalla Mimouna, where drilling platforms have been prepared, it cannot currently be delivered there. In order to avoid delay, the drilling sequence is being modified and the rig will now be transported to the KAB-1 bis location in the Sebou permit, where access is presently possible. KAB-1 bis is a re-drill of the KAB-1 well, drilled in 2011 located downthrown tothe NW-SE trending N'zala Fault in the north-western area of the Sebou 3D survey. The original KAB-1 well encountered swelling clays that compromised the integrity of the borehole and the well had to be abandoned prior to wireline logging and testing. However, the well encountered good gas shows at the target level, a Miocene top Guebbas sand in a structurally downthrown location to the Kabarta Nose, north-east of the KSR-3, -6, -7 and -9 wells. KAB-1 bis has the same target with an adapted mud system to minimise drilling problems in a slightly more updip location. The primary target Guebbas sands are prognosed at a depth of 1,272 metres MD and the TD of the well at 1,360 metres MD.

Whilst further modifications to the drilling sequence may be required due to weather and ground conditions, the rig is scheduled to move to drill Circle's first wells on the Lalla Mimouna permit. The first well of this campaign, LAM-1, is located in the central part of Lalla Mimouna Nord on the East-West trending Anasba Ridge, within the existing 3D seismic area. The target of the LAM-1 well is for Miocene gas-bearing sands, similar to the Sebou discoveries made previously by Circle. The primary target sands are prognosed at a depth of 1,130 metres MD and the TD of the well at 1,431 metres MD. Further wells in the Lalla Mimouna and Sebou permits will follow to complete the current programme. Updates on these wells will be provided in due course.

Commenting on the results of the KSR-12 well Prof. Chris Green, CEO, said:

"We are delighted with the results of the KSR-12 well, which has found the thickest gas sand interval to date of our Sebou wells. We believe that this well will add significant volumes to our reserves for potential gas production and at rates not subject to oil price fluctuation. This is the third well of a six well programme to be drilled with our partner ONHYM in the Sebou permit and is coupled with another six well programme in the Lalla Mimouna permit."

 
Glossary 
MD       Measured Depth 
MMscf/d  Millions of standard cubic feet 
          of gas per day 
TD       Total Depth 
 

For further information contact:

Circle Oil Plc ([phone])

Professor Chris Green, CEO

Investec ([phone])

Chris Sim

George Price

James Rudd

Liberum Capital Limited ([phone])

Clayton Bush

Citigate Dewe Rogerson ([phone])

Martin Jackson

Shabnam Bashir

Murray Consultants ([phone])

Joe Murray

Joe Heron

In accordance with the guidelines of the AIM Market of the London Stock Exchange, Dr Stuart Harker, VP Geology, with over 40 years 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 holds a BSc (Hons) in Geology from the University of London (UK) and an MSc and PhD from the University of Saskatchewan, Canada. He is also a Fellow of the Geological Society of London and a Chartered Geologist.

Notes to Editors

Circle Oil Plc (AIM: COP) is an international oil & gas exploration, development and production Company holding a portfolio of assets in Morocco, Tunisia, Oman, and Egypt with a combination of low-risk, near-term production, and significant upside exploration potential. The Company listed on AIM in October 2004.

Internationally, the Company has continued to expand its portfolio over the past years and now has assets in the Rharb Basin, Morocco; the Ras Marmour Permit in southern Tunisia; the Mahdia Permit offshore Tunisia, and the Zeit Bay area of Egypt. Circle also has the largest licensed acreage of any company in Oman. In addition to its prospective Block 52 offshore, Circle 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 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.

This information is provided by RNS

The company news service from the London Stock Exchange

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