AIM-listed Circle Oil has hit oil after successfully re-entering and sidetracking the Al Amir-1X well, in the North-West Gemsa concession, in Egypt.
In a statement, Circle said Al Amir-1X discovered oil in a single pay zone in April 2005.
The company decided to re-enter the well to re-appraise it as a potential producer. This work has now been completed and following sidetracking to a total vertical depth of 5270 feet, two pay zones have been identified.
The previously discovered upper pay zone in the Gharib formation dolomites has been confirmed by the sidetrack well.
The upper zone has been tested with a sustained rate of 416 barrels per day, flowing 16 degrees API oil.
A new lower pay zone was found in the Gharib formation dolomites. Circle plans to test and confirm the flow rate potential from the new lower pay zone when the well is brought into commercial production.
Circle added that the Egyptian General Petroleum Corporation (EGPC) has given a positive response to the partners declaration of commerciality and development plans to bring the wells into early commercial production have also been submitted to EGPC.
The North West Gemsa Concession partners include operator Vegas Oil & Gas (50%), Circle (40%) and Premier Oil (10%).
The concession covers an area of over 400 square kilometres and lies about 300 kilometres south-east of Cairo, in a partially unexplored part 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.
Circle boss David Hough said: “The confirmation of the original Al-Amir-1 discovery together with its new lower pay zone further enhances the potential and commerciality of this part of the North West Gemsa Concession.
“We are delighted to have received the declaration of commerciality for both wells from EGPC and we plan to bring the two discoveries online in the shortest time frame.”