Vegas Hits Paydirt at Egypt's North West Gemsa Concession

Circle Oil has announced the successful re-entry and sidetrack of well Al Amir-1X, in the North West Gemsa Concession, Egypt.

Al Amir-1X discovered oil in a single pay zone in April 2005. This re-entry was done to redrill and test a new sidetracked section of the well in order to re-appraise the well as a potential producer. This work has now been completed and following sidetracking to a total vertical depth of 5,270 feet, two pay zones have been identified.

The previously discovered upper pay zone in the Gharib formation dolomites has been confirmed by the sidetrack well. This upper zone has been tested with a sustained rate of 416 bopd, API 16.

A new lower pay zone has also been encountered in the Gharib formation dolomites. The Company intends to test and confirm the flow rate potential from the new lower pay zone when the well is brought into commercial production.

The Egyptian General Petroleum Corporation ("EGPC") has given a positive response to the partners 'Declaration of Commerciality' submission made to them for both wells. Development plans to bring the wells into early commercial production have also been submitted to EGPC.

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). The concession covers an area of over 400 square kilometers and lies about 300 kilometers southeast of Cairo, in a partially unexplored part 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.

David Hough CEO, Circle Oil, said, ''The confirmation of the original Al-Amir-1 discovery together with its new lower pay zone further enhances the potential and commerciality of this part of the North West Gemsa Concession. We are delighted to have received the Declaration of Commerciality for both wells from EGPC and we plan to bring the two discoveries online in the shortest time frame.

"With our two recently announced discoveries in Morocco and now two positive results in Egypt we are very pleased with our drilling results to date.''