Circle Oil Announces Operational Update for Egypt

Circle Oil has announced an operational update on its activities in the NW Gemsa Development Lease, onshore Gulf of Suez, Egypt.

Preparations for the testing of the Lower Rudeis in the exploration/appraisal well Al Ola-1X are in their final stages with two intervals from 13,425-13,460 feet MD and 13,510-13,540 feet MD to be tested together. The test is intended to prove up the extension of the occurrence of the Lower Rudeis accumulation which found hydrocarbon bearing sands in the Al Amir SE-6X well, located 3.6 kilometres to the northwest. Once completed it is then planned to test the main oil bearing zones of the overlying Kareem sandstone. Further announcements on the results of the well will be made following completion of the Lower Rudeis section and then again after testing of the Kareem Formation.

Current gross production from the Al Amir, Al Amir SE and Geyad fields in the NW Gemsa Concession ranges from 9,000 to 9,500 bopd.

The NW Gemsa Concession, containing the Al Amir and Geyad Development Leases, covering an area of over 264 square kilometres, lies approximately 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 with a 20 year term, 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).