Circle Oil Granted Extension for Oman Exploration
Circle Oil announced the following operational update on its activities in Blocks 49 and 52 in Oman.
Circle confirmed that the Ministry of Oil and Gas, Oman has granted an extension to the exploration period for our onshore Block 49 now ending December 26, 2012. Within this time frame, Circle will be required to complete an additional 2,500 line kilometers of closely spaced 2D seismic survey and drill one exploration well. The seismic program is to be acquired in the south-eastern part of the permit, north-east of and adjacent to the 3D survey which was completed in 2010. This survey is intended to provide a better understanding of the whole southern permit area, and outline potential additional drilling targets. It will complement the existing dataset, and cover an area with sparse coverage of legacy 2D lines. Acquisition parameters for the survey will draw on the experience obtained during the acquisition and processing of the 3D survey.
Block 49, covering an area of over 15,438 square kilometers, lies about 700 kilometers south-west of Muscat in a relatively unexplored area of Southern Oman. The concession agreement includes the right of conversion to a production license of 30 years in the event of commercial discoveries. Circle Oil Oman Ltd is the operator of Block 49 with a 100% working interest.
The processing of the 5,026 line kilometers of marine 2D seismic, recorded from December 2010 to February 2011, has been completed. The processed data received to date are of a significantly improved quality over the historic seismic data. Interpretations have confirmed the presence of multiple structures and potential targets for exploration drilling. As result a farm-out process has recently been initiated using both internal data rooms and an external agency. The farm-out process is aimed at seeking a partner(s) to drill a commitment well in Block 52 within the next 18 months.
Circle's interpretations detailed in the farmout package in Block 52 have identified several promising play types in stratigraphy ranging in age from Pre-Cambrian to Tertiary, but the offshore Outer Sawquirah Area of Late Cretaceous to Palaeogene structural closures is considered the most prospective.
The identified principal reservoir intervals are Palaeogene Hadhramaut carbonates and clastics and late Cretaceous Aruma Group carbonates. Potential source rocks are considered to be Lower Hadhramaut and Aruma shales with additional potential in the basinal Jurassic Sahtan Group and the Infra-Cambrian Huqf Super Group. Sealing units for potential traps are provided by extensive shale units of the Fars, Hadhramaut and Aruma groups.
Nine large four way dip closed prospects are recognized in the Outer Sawqirah Area. Internal pre-drill deterministic STOIIP of these nine prospects for the most likely unrisked case is calculated as 7,264 MMBO. The associated ultimate recoverable resources for the nine prospects are estimated internally as 2,179 MMBO.
The water depths for proposed drilling locations on the nine prospects range from 724 to 956 m and target depths range from 1,490 to 2,850 m. The largest individual prospect, presently designated as Prospect A1, is situated in a water depth of approximately 769 m, with an internally estimated deterministic most likely STOIIP of 2,435 MMBO and associated most likely ultimate recoverable resources of 731 MMBO, with depth to top target at 1,490 m.
The Company would emphasize the point that the pre-drill deterministic estimates of STOIIP and resources are based on the information and interpretations available at time of issue and are made based on Circle's management deterministic best estimates. There can be no assurance that such estimates will prove to be accurate as future technical evaluations and results, including drilling results, could lead to variations or differ materially from those indicated in this release.
As expected, further exploration work is necessary and the Company is now seeking partners to join in this effort. Further announcements will be made in due course.
Block 52, covering an area of over 63,460 square kilometers, lies about 500 kilometers SSW of Muscat in an underexplored area of offshore Southern Oman. The concession agreement includes the right of conversion to a production license of 30 years in the event of commercial discoveries. Circle Oil Oman Offshore Ltd is the operator of Block 52 with a 100% working interest.
Commenting Prof. Chris Green, CEO, said, "The granting of the extension for Block 49 will allow Circle to further evaluate drilling opportunities within the southern area of the permit. In Block 52, the new seismic is of excellent quality and multiple closures, including some leads we mapped previously, have been firmed up as prospects. The interpretations coming from Block 52 seismic have allowed us to prepare a comprehensive farm-out package."
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