Circle Oil PLC Operating Update (7422C)

TIDMCOP

RNS Number : 7422C

Circle Oil PLC

20 March 2014

20 March 2014

Circle Oil Plc

("Circle" or the "Company")

Operating Update

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

Egypt

Al Amir SE Field ("AASE") and the Geyad Field

The AASE-19 well has now been hooked up as a Shagar producer and was producing at a rate of 517 bopd gross and 0.397 MMscf/d on 14 March, the first full 24 hours of production. The rig has moved to drill the infill AASE-21 well located about 1,000 metres south-east of the AASE-4 well and 800 metres north-west of the AASE-1X well to appraise both the Shagar and Rahmi sands for production.

Current gross daily production from the AASE and the Geyad Field continues at approximately 11,200 bopd and 11 MMscf/d.

Following completion of the current AASE-21 well, the rig is planned to move on to drill an infill support injector well in the north central part of the field prior to release on sub contract. In parallel, reservoir engineering studies are being advanced to develop a dynamic reservoir model to assess reservoir behaviour for the future. This will provide the necessary interactive picture for the effective and efficient management of the two producing fields going forward. This period of reservoir management study will also permit the planning of any future infill drilling both for producers and injectors to maximise reserve recovery for the medium and long term.

Oman

Block 49

The tender process for the forthcoming Block 49 commitment well is at the evaluation stage. The well provisionally named Shisr-1 is to be drilled on the north-western dip-slope of the Ghudun-Khasfah high, approximately 60 kilometres south-west and updip of the Dauka-1 well.

The well is targeting an Intra Haima seismic anomaly with an updip pinchout of the Safiq sands. The well is expected to be drilled to a TD of 2,500 metres with a top target at 2,350 metres with pre-drill P50 STOOIP 56 MMbo, with recoverable prospective resources estimated 14 MMbo.(1) Drilling is planned to commence within H1 2014 and is expected to take up to approximately 45 days without testing. This commitment well is regarded as high risk with a GCOS of 10-12% and completes Circle's commitment on the Block.

Block 52

The planned inshore 2D seismic survey on Block 52 is due to commence on 21 March with the seismic vessel MV Hindsagar. The programme is, as previously announced, to acquire 850 kilometres of 2D seismic data to map and prioritise the three inshore leads identified through interpretation of existing 2D data.

Oman 2013 bid round

In Oman, as previously indicated, the Company bid for an onshore Block in the 2013 bid round and continues to progress its bid with the relevant authorities.

Morocco

Sebou and Lalla Mimouna Permits

The drilling campaign scheduled to start in mid to end January 2014 has been delayed and all preparations slowed by the continuing seasonal rains in the Rharb. As in previous years significant areas within the concession area are subject to flooding which has been known to continue into late spring. Well proposals are now completed for the first six wells which are located on both permits with the first to be drilled in the Sebou permit. The Company is presently planning to drill 12 wells which includes the KAB-1 re-drill.

Current gross daily production from our producing gas wells in the Sebou permit is 7 MMscf/d.

Tunisia

Mahdia Block

Plans are well advanced for the drilling of the Mahdia commitment well with long lead items prepared for shipment, main and sub contractor tenders issued with some awarded and others under commercial evaluation or awaiting ETAP approvals. Subject to final negotiation and Tunisian authorities' approvals the drilling unit has been selected. A farm-out exercise is also underway with a number of companies signed-up to attend the data room this month with further promotion underway.

The licence is within the vicinity of many producing fields, including the Tazerka, Birsa, Oudna, and Halk El Menzel oil fields, and the Maamoura gas field. The most recent discovery, the Mahdia-2 well, located approximately 20 kilometres west of the Block, tested approximately 2,700 bopd from the Serdj carbonate reservoir. This is one of the several possible reservoir horizons proven by producing plays in the region.

The Mahdia exploration well provisionally designated El Medouini-1 is planned to test the stacked play potential of the El Mediouni prospect, including both the primary Birsa Sands target and the secondary fractured carbonates of the Ketatna and Abiod formations as well as the deeper Serdj carbonates. The Birsa Sands alone have an estimated pre-drill P50 case of 185 MMbbls STOOIP.(2) The El Mediouni-1 well will be drilled to a depth of up to 2,300 metres, targeting the stacked primary and secondary reservoir horizons between 1,000 metres and 2,100 metres in subsea depth. The recoverable prospective resources estimate for the El Medouini prospect is 46 MMbbls (2) for the Birsa objective alone, substantially larger than the recoverable commercial threshold for the area which sits at approximately 10 MMbo.

Annual Results

The Company is trading in line with management expectations and expects to issue its Preliminary Results announcement for the year ended 31 December 2013 at the end of May.

Prof Chris Green, CEO, said

"Circle is now entering an exciting and busy operational period in all of its geographies. We were pleased with the results of the sidetrack of the AASE-19 well, which will provide additional oil and gas production from the Al Amir SE field. Drilling operations offshore Tunisia and onshore Oman approach and we await the end of our frustrating delays in Morocco and being able to start our multi-well drilling campaign."

 
 Glossary 
 boepd     barrels of oil equivalent per day 
 bopd      barrels of oil per day 
 GCOS      Geological Chance of Success 
 MD        Measured Depth 
 MMbo      Million barrels of oil 
 MMbbls    Million barrels 
 MMscf/d   Million standard cubic feet of gas 
            per day 
 P50       50% chance of success 
 STOOIP    Stock Tank Oil Originally in Place 
 2D        Two Dimensional 
 3D        Three Dimensional 
 

(1) Circle internal estimate post 2009 3D seismic interpretation

(2) Circle internal estimate post evaluation of 2013 3D seismic survey

In accordance with the guidelines of the AIM Market of the London Stock Exchange, Dr Stuart Harker, VP Geology, also with over 30 years experience, is 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. Dr Harker has relied on primary information supplied by the operator in carrying out his review.

For further information contact:

Circle Oil Plc ([phone])

Professor Chris Green, CEO

Investec ([phone])

Chris Sim

George Price

James Rudd

Liberum Capital Limited ([phone])

Simon Atkinson

Citigate Dewe Rogerson ([phone])

Martin Jackson

Shabnam Bashir

Murray Consultants ([phone])

Joe Murray

Joe Heron

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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