Circle Oil: Successful Testing of NW Gemsa Appraisal

NW Gemsa Concession
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Circle Oil reported that the Al-Amir SE-4X appraisal well has been successfully drilled and tested in the onshore North West Gemsa Development Lease in Egypt.

Circle is delighted to confirm that the Kareem Formation (the "Formation") sandstones under test flowed 42° API oil and gas at sustained average rates of 5,500 bopd and 7.159 MMscfd using a 64/64" choke from the lower of two identified pay zones. The well, which is the third appraisal well to be drilled on the Al-Amir SE discovery area, has been completed, connected into the local infrastructure and is in production.

Log result based interpretations indicate that the total net thickness of the two pay zones is approximately 69 feet. The upper pay zone identified in the Kareem Shagar Sandstone is 23 feet thick and will be tested at a later date. The lower tested pay zone in the Kareem Rahmi Sandstone is 46 feet thick.

A full technical evaluation of all the results is underway to permit development planning and is a precursor to further assessment of the resource potential. An assessment of reserves has not yet been completed.

The Al-Amir test program began once the drilling rig moved to the north and commenced drilling the Geyad 2 well which is the first appraisal well in the Geyad discovery area. The primary target will again be the Kareem Formation and it is planned also to test for secondary targets in the Pre-Miocene Nubia sandstones prognosed at a depth of 11-12,000 feet.

The NW Gemsa Development Lease is contained within the NW Gemsa concession covering an area of over 260 square kilometers and lying about 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 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 Premier Oil plc (10% interest).

David Hough, CEO of Circle, said, "This successful appraisal well, which has given the best results to date in the Al-Amir discovery area and will add to our current production, is yet more excellent news for Circle Oil. Al-Amir SE-4X has gone into production and we will achieve stabilized production from the well as quickly as possible. We can be justifiably very pleased with the results of our ongoing drilling program as these drilling successes further strengthen the Company's position and we look forward to the continuing appraisal of these growing assets."


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