Circle Oil Announces Operating Update Egypt

Friday, Feb 10, 2012

Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to announce the following update regarding the Al Amir SE Field ("AASE") and the Geyad field.

AASE-10X Well

AASE-10X was spudded on 13 December 2011 and is located on the central western flank of the AASE field, downdip of the AASE-4X producer. The well's objective was to appraise both the Shagar and Rahmi sands for injection/production in that location. The well was successfully drilled to a total depth of 10,450 ft MD into the Upper Rudeis Formation.The well encountered 34 ft of net pay in the Kareem Shagar sand and 31 ft in the underlying Rahmi sand with oil bearing sands present to the base of the reservoir.  The Rahmi zone was perforated from 9,975 to 10,010 ft MD and testing is planned to be conducted shortly. The results will be announced in due course.

Following its productive lifespan, the Rahmi sands will be used for water injection. This injection will be targeted principally to support the Rahmi production from the nearby updip AASE-4X well.

AASE-11X Well

Following the successful completion of the AASE-10X well, the rig was mobilised to drill the appraisal well AASE-11X, located in the north western flank of the AASE field.The well was spudded on 5 February 2012 and has reached a depth of 1,783 ft (13 3/8" casing point). It is planned that the well will appraise both the Shagar and Rahmi sands for production in that location.

Production

Production from the Al Amir SE and Geyad fields averaged approximately 7,025 bopd (gross) through December 2011.Cumulative production from the NW Gemsa Concession has now exceeded 7 million barrels of 42 degree API Crude oil.

Water Injection

Pressure support in response to water injection in the AASE-7X and AASE-8X wells has now been observed in the nearby producers of AASE-6X Shagar and the AASE -4X Rahmi wells.  Water injection has also commenced in the Geyad field through the Geyad-5 well. Cumulative injection to date is 1.39 million barrels at a current rate of about 11,700 bwpd in AASE-7X and AASE-8X and 5,300 bwpd in Geyad-5, with all three wells injecting into both Shagar and Rahmi reservoirs.

The NW Gemsa Concession, containing the Al Amir and Geyad Development Leases, covering an area of over 260 square kilometres, lies about 300 kilometres 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 licence 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).

Source: Circle Oil

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