Circle Oil Provides Operational Update in Egypt

Circle Oil, the international oil and gas exploration, development and production company, is pleased to announce that the Al Amir SE-6X down-dip flank appraisal well successfully tested a hydrocarbon bearing interval over a pay zone of approximately 8 feet in thickness in the Lower Rudeis within the interval 13,776 to 13,784 feet.

A drill stem test flowed 45° API oil at a sustained average rate of 66 bopd and 1.1mmscf/d of gas using a 32/64" choke. The well was shut in for pressure build-up and plugged back to a depth of 10,520 feet. The well test confirms the presence of hydrocarbon resources in the Lower Rudies interval and whilst the Lower Rudeis formation will not produce at this time the results of the perforation and testing indicate potential for future work programmes.

The Company is now preparing this well to test the main oil-bearing zone of the Kareem Shagar Sandstone. This has historically proven to be productive in other wells in the Al Amir SE field area. Once the Kareem sandstone is tested and evaluated, a further announcement concerning the results of the well will be made.

The NW Gemsa Concession, containing the Al Amir and Geyad Development Leases, covering an area of over 264 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 North West Gemsa Concession partners include: Vegas Oil and Gas (50% interest and operator); Circle Oil Plc (40% interest); and Sea Dragon Energy (10% interest).