Circle Oil: Al-Amir Well Placed in Production

Circle Oil announced that the Al-Amir SE-6 appraisal well has been successfully drilled and production tested in the Al-Amir Development Lease in the onshore North West Gemsa Concession in Egypt.

Circle is delighted to confirm that the Kareem Shagar Formation Sandstones under test flowed 42° API oil at a sustained average rate of 4,626 bopd and 3.91 MMscfd of gas using a 48/64" choke from the upper of the two identified pay zones. The well, which is the fifth 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 1,106 bopd using a 16/64" choke.

Log result interpretations indicate that the total net thickness of the tested pay zone is approximately 30 feet in the interval 9,806 feet to 9,836 feet measured depth.

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. NW Gemsa partners include: Vegas Oil and Gas (50% interest and operator); Circle Oil Plc (40% interest); and Sea Dragon Energy (10% interest).

The Al-Ola X-1 well spudded on July 15, and, as at July 20, 2010, was drilling ahead at 1,542 feet. This well is being drilled outside of the southern boundary of the Al-Amir SE Development Lease and is intended to capture a southern extension to the Al-Amir SE oil field.

With the placement of the Al-Amir SE-6 well on stream, the NW Gemsa gross production has now reached approximately 9,500 bopd.

Commenting on this latest appraisal well in the NW Gemsa Concession, Professor Chris Green, CEO of Circle, said, "We are delighted with the successful testing and completion of the Al Amir SE-6 well, which has now been placed into production. Ongoing drilling will now focus on appraisal and development to enable us to better understand the reservoir geology of the field and plan for pressure support."