Circle Oil plc announced the signing of a farm-in agreement to the Mahdia Permit offshore Tunisia with Tethys Oil and Mining Ltd. The Mahdia permit covers an area of 3780 square kilometres and is bounded by the Nabeul Permit to the north and the territorial boundary with the island of Lampedusa, in Italy, to the east. Historically the geology and potential of this and the surrounding offshore area was successfully explored by Shell and Total and previous exploration has resulted in discoveries and commercial oilfields including fields such as Tazerka, Birsa, Oudna, Halk El Menzel and Isis.
Following the farm-in, Circle will hold a 70% working interest in the permit. Circle will become operator once the acquisition of 500 kilometers of additional 2D marine seismic is complete, prior to the commencement of any drilling in the permit. The permit commitments require the acquisition of 500 kilometers of 2D seismic in the first two years of the license which commenced July 2007 and the drilling of one commitment well in the subsequent three years to 2012. The permit contains multiple undrilled prospects which have already been mapped from the existing datasets. The additional seismic will be used to enhance ranking and prioritization of these prospects prior to drilling.
Commenting on the results David Hough, CEO of Circle Oil, said: "We are particularly pleased to be able to announce this farm-in offshore Tunisia. The acreage is well known to two of our senior management who worked this geology in their earlier careers. Many of the main undrilled prospects in Mahdia are already mapped and this play has proven success. These prospects remained undrilled due to their size and historic lower oil prices, but they are now very commercial. With good potential reserves they are now definitely worth pursuing. The farm-in further enhances our position in Tunisia and the region generally. We are pleased to be a part of the effort to establish Tunisia as a substantial oil producer."
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