Drilling and Production Update

 

TIDMCOP 
 
RNS Number : 8321F 
Circle Oil PLC 
20 January 2010 
 

 
 
20 January 2010 
 
 
CIRCLE OIL PLC 
("Circle" or the "Company") 
 
 
Drilling and Production Update 
Successful Testing of Geyad-2X ST1 Appraisal Well 
Circle Oil Plc (AIM: COP), the international oil and gas exploration, 
development and production company, is pleased to announce that the Geyad-2X ST1 
appraisal well has been successfully drilled and tested in the onshore North 
West Gemsa Concession in Egypt. 
 
 
Circle is delighted to confirm that the Kareem Formation Sandstones under test 
flowed 42  API oil at sustained average rates of 3,850 bopd and 4.62 MMscfd of 
gas using a 48/64" choke from the upper of two identified pay zones. The well, 
which is the second appraisal well to be drilled on the Geyad discovery area, is 
being completed and prepared for connection. 
 
 
Log result interpretations indicate that the total net thickness of the two pay 
zones is approximately 32 feet. The upper tested pay zone identified in the 
Kareem Shagar Sandstone is 14 feet thick. The lower untested pay zone in the 
Kareem Rahmi Sandstone is 18 feet thick and will be further evaluated at a later 
date. 
 
 
A full technical evaluation of all the results is underway to permit development 
planning and is a precursor to further assessment of the resource potential. An 
assessment of reserves has not yet been completed. 
 
 
The Geyad-2X well encountered the prognosed Kareem sands at both Shagar and 
Rahmi levels as well as additional potential hydrocarbon bearing sands in the 
Upper Rudeis and intersected the prognosed deeper targeted Nubia sands. The 
deeper Nubia sands proved to be water bearing, the Upper Rudeis sands were tight 
and the Kareem Sandstones were encountered with high Water Saturation ("Sw") and 
provided valuable information on the Oil Water Contact ("OWC)" for the 
reservoir. With the increased knowledge of this contact an updip sidetrack 
location was planned (Geyad-2X ST1) and successfully drilled to intersect the 
Kareem Sands. 
 
 
The NW Gemsa concession, 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. 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). 
 
 
The drilling rig will now move to commence drilling the Al-Amir SE-5 well which 
is the fourth appraisal well in the Al-Amir SE discovery area. The primary 
target is again the Kareem Formation, but this well is being drilled primarily 
to delineate a reservoir boundary which is required for technical reasons and 
therefore the well may not become a producer. 
 
 
Production 
 
 
We are also pleased to confirm an increase in daily production to approximately 
7,350 Bopd following a change to production choke size on Al-Amir SE-4. A 
further increase in production can be expected once Geyad-2X ST1 is connected 
and attains stabilized production. 
 
 
David Hough, CEO of Circle, said: 
 
 
"This successful appraisal well once connected will add to our current 
production levels in the Gemsa Concession and must be regarded as more excellent 
news for Circle Oil. The information gained on the OWC is also fundamentally 
important and this obviously aided in planning the optimum sidetrack location. 
This well has achieved higher flow rates under test than the first Geyad well 
and we can again be justifiably pleased with the results of our ongoing drilling 
programme. We are delighted with the further increase in production and look 
forward to announcing the uplift in production once hook up and stabilized 
production is achieved from Geyad-2X ST1" 
 
 
 
 
Glossary 
 
 
Bopd         - Barrels of oil per day 
API            - American Petroleum Institute density scale 
MMscfd     - Millions standard cubic feet per day 
 
 
 
 
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 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. Professor 
Green has relied on primary information supplied by the operator in carrying out 
his review. 
 
 
 
 
For further information contact: 
 
 
Circle Oil Plc ([phone] 
David Hough, CEO 
 
 
Collins Stewart Europe Limited ([phone]) 
Adrian Hadden 
 
 
Fox-Davies Capital ([phone]) 
Daniel Fox-Davies 
 
 
Citigate Dewe Rogerson ([phone]) 
Martin Jackson / George Cazenove 
 
 
Murray Consultants ([phone]) 
Joe Murray 
 
 
 
 
Notes to Editors 
 
 
Circle Oil Plc 
 
 
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, 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 Marmour 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 is available on its website at www.circleoil.net. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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