Operating Update Egypt (0437X)

TIDMCOP

RNS Number : 0437X

Circle Oil PLC

08 February 2012

8 February 2012

CIRCLE OIL PLC

("Circle" or the "Company")

Operating Update Egypt

Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to announce the following update regarding the Al Amir SE Field ("AASE") and the Geyad field.

AASE-10X Well

AASE-10X was spudded on 13 December 2011 and is located on the central western flank of the AASE field, downdip of the AASE-4X producer. The well's objective was to appraise both the Shagar and Rahmi sands for injection/production in that location. The well was successfully drilled to a total depth of 10,450 ft MD into the Upper Rudeis Formation. The well encountered 34 ft of net pay in the Kareem Shagar sand and 31 ft in the underlying Rahmi sand with oil bearing sands present to the base of the reservoir. The Rahmi zone was perforated from 9,975 to 10,010 ft MD and testing is planned to be conducted shortly. The results will be announced in due course.

Following its productive lifespan, the Rahmi sands will be used for water injection. This injection will be targeted principally to support the Rahmi production from the nearby updip AASE-4X well.

AASE-11X Well

Following the successful completion of the AASE-10X well, the rig was mobilised to drill the appraisal well AASE-11X, located in the north western flank of the AASE field. The well was spudded on 5 February 2012 and has reached a depth of 1,783 ft (13 3/8" casing point). It is planned that the well will appraise both the Shagar and Rahmi sands for production in that location.

Production

Production from the Al Amir SE and Geyad fields averaged approximately 7,025 bopd (gross) through December 2011. Cumulative production from the NW Gemsa Concession has now exceeded 7 million barrels of 42 degree API Crude oil.

Water Injection

Pressure support in response to water injection in the AASE-7X and AASE-8X wells has now been observed in the nearby producers of AASE-6X Shagar and the AASE -4X Rahmi wells. Water injection has also commenced in the Geyad field through the Geyad-5 well. Cumulative injection to date is 1.39 million barrels at a current rate of about 11,700 bwpd in AASE-7X and AASE-8X and 5,300 bwpd in Geyad-5, with all three wells injecting into both Shagar and Rahmi reservoirs.

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

Prof Chris Green, CEO, said

"The success of the AASE-10X well in finding good reservoir sands, oil bearing in both the Shagar and Rahmi sands, is an excellent result. Subject to successful testing and completion the well is presently planned to first produce from the Rahmi and then later be converted to a water injector to support the AASE-4X production.. The rig has moved and has started drilling well AASE-11X which is intended as a producer for the AASE field as part of the overall plan to improve the productivity of the NW Gemsa accumulations."

Glossary

 
  bopd   barrels of oil per day 
  bwpd   barrels of water per day 
  ft     Feet 
  MD     Measured Depth 
 

In accordance with the guidelines of the AIM Market of the London Stock Exchange, Professor Chris Green, Chief Executive Officer of Circle Oil Plc, an explorationist and geophysicist with over thirty years oil & gas industry experience, and Dr Stuart Harker, VP Geology, also with over 30 years experience, are 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. Professor Green and Dr Harker have relied on primary information supplied by the operator in carrying out their review.

For further information contact:

Circle Oil Plc ([phone])

Professor Chris Green, CEO

Evolution Securities ([phone])

Chris Sim

Neil Elliot

Fox-Davies Capital ([phone])

Daniel Fox-Davies

Richard Hail

Citigate Dewe Rogerson ([phone])

Martin Jackson

Kate Lehane

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 with an expanding portfolio of assets in Morocco, Tunisia, Oman and Egypt 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 two 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 its prospective Block 52 offshore, Circle also 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 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

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