TIDMCOP
RNS Number : 6846E
Circle Oil PLC
11 April 2011
11 April 2011
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 an update regarding the Al Amir SE-7X water injector well
located to the west of the Al Amir SE-4X well in the Al Amir
Development Lease. Al Amir SE-7X, which started drilling on 27
November 2010, has been successfully sidetracked and has now
reached target depth ("TD") at 15,600 ft measured depth ("MD") in
the Lower Rudeis.
The main objectives for this well were to provide water
injection support into the Kareem sands and to delineate the Kareem
oil-water contact, which is required for technical reasons
including resource estimation. The Kareem sands were encountered
between 10,664 and 10,852 ft MD and these have been successfully
cased off. The Main Shagar Sands, encountered between 10,738 and
10,770 ft MD, were water bearing and of excellent reservoir
quality. As a result Al Amir SE-7X should provide a good initial
water injection well. The overlying sand stringers from 10,664 to
10,718 ft MD have indicated oil saturations on logs. This places
the deepest oil in Al Amir SE for the Kareem at approximately
10,200 ft Sub Surface, which positively corresponds with the latest
estimates for the oil-water contact calculated using formation
pressure data. Additional work is to be undertaken to refine this
elevation. The well has been plugged back to 11,180 ft MD and is
being completed as a water injector in the Kareem sands to support
the updip oil producers. A further development well and water
injection wells form the immediate drilling programme for the Al
Amir SE field.
The secondary objective of the well was to evaluate the Lower
Rudeis thin sand stringers with indicated hydrocarbon saturations
between 15,553 and 15,567 ft MD, which were previously encountered
in the Al Amir SE-6X well. Log analysis by the operator identified
6 ft of pay with an average 10% porosity and a hydrocarbon
saturation of 68%. The decision was taken not to test this interval
due to mechanical problems, but to conduct further drilling to
properly evaluate the productivity of the Lower Rudeis sands.
In the drilling of the up-hole section of Al Amir SE-7X, sand
stringers with potential hydrocarbon saturations containing 6 ft of
potential pay were encountered in the South Gharib (5,634 to 5,645
ft MD) and a further 4 ft of potential pay in the Belayim (8,400 to
8,404 ft MD). These zones will be the subject of further evaluation
in future drilling which will be undertaken to properly evaluate
these positive occurrences for additional hydrocarbons in the NW
Gemsa block.
During 2010 four successful wells were drilled and
completed:
-- Geyad-2X ST completed as a producer in February;
-- Al Amir SE-5X completed as a producer in March;
-- Al Amir SE-6X completed as a producer in July; and
-- Al Ola-1X completed as a producer in December.
Further intensive exploration, appraisal and development
drilling is planned over the next eighteen months. This will
include drilling water injection wells to support the oil
production in both the Al Amir SE and Geyad fields as required.
In addition, construction is now underway to construct
facilities together with an 8-inch gas pipeline to the nearby
facilities for gas export and the sale of gas and associated
liquids. These facilities are expected to be completed by year end,
with an associated increase in gas and liquids production.
The current production rate from the NW Gemsa fields of Geyad
and Al Amir SE is approximately 7,500 bopd gross as fluid off-take
from the fields is controlled in line with best reservoir
management practice as the water flood is initiated, becomes
operational and is proven to be effective in maximising recovery
rates. By mid 2012 the production rate is expected to rise to
approximately 12,000 bopd gross as water flood operations become
effective.
Gross production from start up in February 2009 through to the
end of February 2011 was 4.6 MMBO. Work is currently underway on an
independent third party report on ultimate recoverable resources
for NW Gemsa. The results are expected during the second quarter of
2011 and will be incorporated within the Annual Report for 2010.
The NW Gemsa permit, in which Circle Oil holds a 40% interest, has
been a very successful venture for the Company.
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
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).
Glossary
ft feet
bopd barrels of oil per
day
MMBO Millions of barrels
of oil
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 has
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 (+44 20 7638 9571)
Professor Chris Green, CEO
Evolution Securities (+44 20 7071 4300)
Chris Sim
Neil Elliot
Fox-Davies Capital (+44 20 7936 5230)
Daniel Fox-Davies
Philip Davies
David Porter
Citigate Dewe Rogerson (+44 20 7638 9571)
Martin Jackson
Murray Consultants (+353 1 498 0320)
Joe Murray
Joe Heron
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 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 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 and the Zeit Bay area of Egypt. 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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