Operating Update Egypt (8804Z)

TIDMCOP

RNS Number : 8804Z

Circle Oil PLC

22 March 2012

22 March 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-11X ST 1 Well

Appraisal well AASE-11X was spudded on 5 February 2012 and is located on the north western flank of the AASE field, updip of the AASE-7X water injector. The well's objective was to appraise both the Shagar and Rahmi sands for injection/production in that location. The well reached a TD of 9,600 ft MD before being sidetracked to the south for geological reasons. The AASE-11X ST1 well was then successfully drilled to a total depth of 11,160 ft MD into the base Kareem. The well encountered 42 ft of net pay in the Kareem Shagar sand and 22 ft in the underlying Rahmi sand with oil bearing sands present to the base of the reservoir. Completion of the well as a Shagar sand producer is underway and testing is planned to be conducted shortly. The results will be announced in due course.

AASE-12X Well

Following the successful completion of the AASE-11X ST1 well, the rig will be mobilised to drill the appraisal well AASE-12X, located in the south central part of the AASE field, targeted as an infill producer, located midway between AASE-5X and Al Ola-1 wells.

Production

Production from the AASE and Geyad fields averaged approximately 7,400 bopd (gross) through February 2012. The southern part of the AASE field was granted a development lease for the Al Ola area in February and the total production rate of the fields, including the Al Ola-1 and Al Ola-2 wells, has increased to a current level of 8,340 bopd. Cumulative production from the NW Gemsa Concession has now exceeded 7.5 million barrels of 42 degree API Crude oil.

Water Injection

The AASE-10X well has been successfully completed for water injection in the Rahmi sands which was the original objective for the well, following poor results of testing for Rahmi oil production. The current injection rate for this well is 2,000 bwpd out of a daily total for the AASE field of 16,000 bwpd. A cumulative injection of 1.9 MMbw has been reached for the three water injectors in the AASE field from start up in September 2011. Water injection for Geyad-5X in the Geyad field is currently at a rate of 5,531 bwpd, with a cumulative injection of 0.3 MMbw, since injection start up in January 2012.

Pressure support in response to the water injection programme has been observed in updip producers and continues to be monitored.

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

"Circle is very pleased that the AASE-11X ST1 well has found good oil bearing reservoir sands in both the Shagar and Rahmi. This further proves up the north western flank of the AASE field. The rig will shortly be moved to drill the AASE-12X well, which is intended as an infill 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 
   MMbw    Millions of barrels of water 
   TD      Target 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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