Circle Oil Notes Flow Rates of 1.65MMscfd at Al Amir SE Discovery

Circle Oil announced the following operational update on its activities in Egypt, Oman and Tunisia.

  • Positive result from sixth appraisal well in Al Amir SE discovery area as flow rates of 1,575 bopd and 1.65MMscfd of gas are achieved
  • Further potential extension found to previously discovered Lower Rudeis Formation oil and gas which will be subject to further evaluation in future wells
  • 2D Seismic program of 5,000km offshore Oman to commence on schedule in December and conclude in January
  • Circle proceeding with plans to increase holding in Tunisian Grombalia Permit - Drilling on target for early 2011 

Egypt - NW Gemsa Development Lease

The exploration/appraisal well Al Ola-1X reached TD at 14,323ft in the Lower Rudeis, following drilling through the Kareem Formation. Log analysis has shown both sand units of the Kareem Formation to be oil bearing with no indication of the OWC. Formation pressure testing showed some limited communication with the updip Al Amir SE producers and the well has proven up the southern Al Amir SE field extension in the Al Ola area. The Top Shagar was encountered at 9,731ft MD with 6ft of net pay and Top Rahmi at 9,782ft MD with 19ft of net pay (operator figures). The oil column is presently down to the base Rahmi Sand at 9,802ft MD (9,719ft SS).

Circle is delighted to confirm that, on initial testing at clean up, the Kareem Rahmi Formation Sandstones flowed 42° API oil at an average rate of 1,575 bopd and 1.65 MMscfd of gas using a 32/64" choke from the lower of the two identified pay zones in the interval 9,780ft MD to 9,800ft MD.

The well, which is the sixth appraisal well to be drilled in the Al Amir SE discovery area, was shut in for a pressure build up and later placed on stream at an initial rate of 1,500bopd and 1.6MMscf/d of gas using a 32/64" choke.

The secondary target in the Lower Rudeis Formation was encountered with two hydrocarbon bearing intervals from 13,425ft MD to13,460ft MD and 13,510ft MD to13,540ft MD. This occurrence proves up the extension of the Lower Rudeis accumulation in the Al Amir SE-6X well, located 3.6 kilometers to the northwest. Due to repeated and multiple mechanical problems, final testing of the Lower Rudeis intervals could not be completed. Further appraisal of the Lower Rudeis is to be undertaken with future wells. 

The next well to be drilled is Al Amir SE-7X, to be located to the west of the Al Amir SE-4X well. This well is intended to be a water injector for the Kareem sands, but is presently planned to be deepened to evaluate the Lower Rudeis potential.

Until water injection is installed and proven effective in the Al Amir SE field, it is planned to reduce the NW Gemsa production rate as part of good field management practice. Gross production from the Al Amir SE and Geyad fields, for an interim period, is expected to be 7,000-8,000 bopd after which oil production levels will be systematically and incrementally increased together with the planned gas production.

The NW Gemsa Concession, containing the Al Amir and Geyad Development Leases, covering an area of over 264 square kilometers, lies 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 Sea Dragon Energy (10% interest).

Oman - Block 52

We have been informed by the appointed contractor BGP that the seismic vessel contracted to undertake the Block 52 2D seismic survey is scheduled to arrive in Muscat on 25 November 2010. Following pre-survey testing the vessel will sail to site to commence the acquisition of 5,000 kms of full fold 2D seismic data. Acquisition will be undertaken though December 2010 with the survey finishing in January 2011. 

Tunisia - Grombalia Permit 

Planning for the commitment well to be drilled early 2011 is advanced and long lead drilling materials have been ordered. In line with the agreement with its partner Exxoil, Circle has commenced the process to increase its working interest from 15% to 36%. The Partnership are presently finalizing technical studies to decide the final drilling location by the end of this year. 

Commenting Prof. Chris Green, CEO, said, "Al Ola -1X has once again proven up the Kareem sands and importantly proven up the field extension in the south. This ultimately is expected to have a positive impact on total reserve numbers. We will now start water injection support drilling whilst at the same time further evaluating the Lower Rudeis potential. Planning and execution will now be concentrated on good field management and development with a view to the optimization of resources and production together with the commencement of gas production. 

Block 52 seismic acquisition will be starting up at the end of the month and Tunisia will be featuring in the operational work schedule in first quarter 2011."