Circle Oil Notes Drilling Preps at Egyptian Well

Circle Oil announced an update regarding the Geyad-3C appraisal/development well together with details on the future development of the NW Gemsa Concession.

Geyad-3C Update

Geyad-3C, located to the south-east of the Geyad-1X ST well in the Geyad Development Lease, is planned to be drilled to a total depth ("TD") of 5,911 ft measured depth ("MD") in the Upper Rudeis. The well is currently rigging up and preparing to commence drilling. The main objective for this well is to appraise and bring into production the oil bearing Shagar and Rahmi sandstones of the Kareem Formation. In the Geyad-1X ST well both zones were tested in May 2009 at a combined sustained rate of 2,809 bopd and 3.04 MMscf/d of gas from the Rahmi sandstones on a 64/64" choke and the well was put on production. In Geyad-2 ST, the Shagar sands were tested at a sustained rate of 3,850 bopd and 4.62 MMscf/d of gas on a 48/64" choke and the well was put on production. Secondary objectives of the Geyad 3-C well are to penetrate and evaluate the hydrocarbon potential of the overlying South Gharib and Belayim formations.

NW Gemsa Concession

Following the drilling of Geyad-3C, further intensive exploration, appraisal and development drilling is planned over the next eighteen months. A program of water injection wells will be drilled, as required, to support oil production in both the Al Amir SE and Geyad fields.

The NW Gemsa Concession, containing the Al Amir and Geyad Development Leases, covering an area of over 260 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 NW Gemsa Concession partners include: Vegas Oil and Gas (50% interest and operator); Circle Oil Plc (40% interest); and Sea Dragon Energy (10% interest).