Circle Oil Tests Success in NW Gemsa Concession

Circle Oil announced that the Al Amir 1-ST2 well, originally drilled in 2008, has been tested for production. The initial flow rate of August 2, 2010 was 278 bopd on a 128/64" choke using a sucker rod pump. The productive interval was perforated from 4,730-4,778 ft MD and consists of porous carbonates within the evaporitic sequence of the South Gharib Formation. The original DST of that zone conducted in 2008 produced up to 416 bopd of 16°API oil using nitrogen lift. Once the South Gharib production test and production engineering system is completed the well is planned to be put on production and the oil trucked to the Zeitco terminal.

The Al Ola X-1 exploration/appraisal well, spudded on 15 July 2010 and is targeted to the south of the southern boundary of the Al Amir SE development lease in order to appraise a southern extension to the Kareem accumulation of the field. The well, at 7,335 feet MD on 8 August 2010, will also be deepened to test a secondary objective in the Lower Rudies Formation, where oil and gas were recently tested in the Al Amir SE6 well, and is now expected to reach a total depth of 13,700 feet.

Current production from the Al Amir, Al Amir SE and Geyad fields in the NW Gemsa Concession is 9,200-9,500 bopd.

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 (40% interest); and Sea Dragon (10% interest).