Circle Oil Announces Oil, Gas Discovery In North West Gemsa Concession, Egypt

Published: 19-May-2009

By: Staff Writer Staff Writer Staff Writer

Circle Oil Plc (Circle Oil) has announced initial results from the Geyad-1X exploration well which has been successfully drilled in the onshore North West Gemsa concession in Egypt. Circle Oil is delighted to confirm a discovery in the Kareem formation sandstones with the well testing 40° API oil and gas at a sustained average combined rate from two pay zones of 2,809 bopd and 3.04 MMscfd using a 64/64" choke.

The total calculated net thickness of the two pay zones is about 29 feet. The upper pay zone identified in the Kareem Shagar formation is a net 10 feet thick and the lower pay zone in the Kareem Rahmi Formation is a net 19 feet thick. The lower Kareem Rahmi formation zone has been tested at a sustained rate of 1174 bopd and 1.324 MMscfd. The upper Kareem Shagar Formation zone was not tested separately.

A full technical evaluation of all the results is underway to further assess the resource and to permit development planning. An assessment of reserves has not yet been completed. The well is currently being completed as a potential producer with a view to early production.

The rig, Mubarak -1 will now move to the Al Amir discovery to commence drilling the Al Amir SE-3 appraisal well.

The NW Gemsa concession covers an area of over 400 square kilometers and 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 Premier Oil plc (10% interest).

Commenting on this latest discovery, David Hough, chief executive officer of Circle Oil, said: This successful exploration well is yet more excellent news for Circle Oil and we look forward to its near term appraisal and development. We can continue to be justifiably very happy with the results of the 2008-09 drilling programme as a result of which Circle is now gaining due recognition as a growing exploration and production company.

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