Circle Oil announced the following operational update on its activities in the NW Gemsa Development Lease, onshore Gulf of Suez, Egypt, the Sebou Permit, onshore Morocco and Blocks 49 onshore and 52 offshore, Oman.
Egypt - N W Gemsa Development Lease
Preparations for the testing of the Lower Rudeis in the exploration/appraisal well Al Ola-1X are in their final stages with two intervals from 13,425-13,460 feet MD and 13,510-13,540 feet MD to be tested together. The test is intended to prove up the extension of the occurrence of the Lower Rudeis accumulation which found hydrocarbon bearing sands in the Al Amir SE-6X well, located 3.6 kilometers to the northwest. Once completed it is then planned to test the main oil bearing zones of the overlying Kareem sandstone. Further announcements on the results of the well will be made following completion of the Lower Rudeis section and then again after testing of the Kareem Formation.
Current gross production from the Al Amir, Al Amir SE and Geyad fields in the NW Gemsa Concession ranges from 9,000 to 9,500 bopd.
The NW Gemsa Concession, containing the Al Amir and Geyad Development Leases, covering an area of over 264 square kilometers, lies approximately 300 kilometers 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 license with a 20 year term, 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).
Morocco - Sebou Permit
The exploration well KAB-1 has been drilled and reached a TD of 1,400 meters MD in the Guebbas unit. Significant gas shows were observed at expected levels during the drilling of the well and wireline logging and pressure sampling tools were prepared for formation evaluation. In reaching TD, multiple drilling problems were encountered and hole integrity could not be maintained, thus the open hole logging program could not be completed. The well has been suspended with a view to completing future well work to fully evaluate the gas producing potential of the KAB prospect.
The rig was then mobilized to drill the second well of the 2010 program at CGD-11. The well has now reached TD at 1,171 meters MD and has encountered multiple significant gas shows at four levels. The open hole logging and pressure sampling has been successfully completed and the well is being prepared to perforate and test three levels in the Upper Guebbas (3 feet net sand) , Guebbas (12 feet net sand) and Hoot Formations (18.7 feet net sand) thus totaling 33.7 feet net sand. A fourth level (1.7 feet net sand) in the overlying Gaddari will be left for testing and potential production at a later date. A further announcement will be made once testing is completed.
The Sebou Concession, containing the KSR and CGD gas discoveries, covers an area of over 212.7 square kilometers, lying approximately 60 kilometers northeast of the coastal town of Kenitra, in a partially unexplored area of the Rharb Basin. The concession agreement includes the right of conversion to a production license with a 25 year term, plus extensions, in the event of commercial discoveries. The Sebou Concession partners are: Circle Oil Plc (75% interest and operator) and ONHYM (25% interest).
Oman Block 49
The Company has received the first preliminary data set of the stacked data using first pass velocity models and a preliminary post stack migration. Full enhanced 3D velocity modeling and prestack migration processing is now underway and will continue over the next few months and we are pleased to confirm that "first look" at the preliminary dataset indicates the features consistent with the presence of the Ara Salt Formation together with interpretable internal structures.
Oman Block 52
The Company still expects the seismic vessel to arrive in mid - November 2010. Thus the 5,000 kilometers of 2D marine seismic, to be shot to firm up identified leads into firm prospects, is presently expected to commence on schedule.
Commenting Prof. Chris Green, CEO, said, "In NW Gemsa, the testing of the Lower Rudeis sands in the Al Ola-1X well is imminent as we seek to gain further information towards understanding the extent of this hydrocarbon accumulation. We can then look forward to the testing of the Kareem sands and the likely confirmation of the further extension of the Al Amir SE field at the Kareem level.
"In Morocco, drilling problems with swelling clays have presently prevented full evaluation of the gas shows observed in the KAB-1 well. However, we plan to return to properly evaluate the gas shows we encountered in the KAB prospect following an analysis of remedial options. We decided to immediately continue the drilling program with CGD-11 which has been successfully drilled and logged and is now being prepared for testing.
"In Oman, programs continue on schedule in both Blocks 49 and 52 and we are pleased to be able to see first indications of features consistent with the presence of the Ara Salt Formation on the 3D seismic data."
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