Britain-based Circle Oil and Premier Oil have struck oil and natural gas in their onshore North West Gemsa Concession in Egypt
Circle Oil Plc declared that Circle Oil Egypt Ltd (COEL), its wholly owned subsidiary, has confirmed a discovery in the Kareem Formation sandstones, with the well testing 41 degrees API oil and gas at sustained rates of 3,388 bopd and 4.25 MMscfd of gas using a 64/64″ choke. The well, Al-Amir SE-1, which had been sidetracked after operational difficulties, is currently being completed as a potential producer.
The drilling has commenced later than scheduled due to late delivery of the drilling rig. As previously announced in January 2008, the exploration well is targeting the Nubia Sandstone at a prognosed depth of 12,870 feet.
A full technical evaluation of all the results is underway to permit forward planning as a precursor to further assessment of the resource. An Assessment of Reserves has not yet been completed.
The agreement, which was subject to ratification by the Egyptian General Petroleum Corporation (EGPC) and the Ministry of Petroleum, will result in Circle Oil holding a 40% interest in the concession, while Vegas Oil and Gas, operator with a 50% interest and Premier Oil plc 10%.
The NW Gemsa concession covers an area of over 400 square kilometers and lies about 300 kilometers southeast of Cairo, in a partially unexplored part of the Gulf of Suez Basin. It includes the Al Amir-1 well which discovered oil in April 2005. This well flowed 787 barrels of oil per day on test.
The concession agreement has recently entered its second phase of three and is valid for a further two and a half years. It has the right of conversion to a production licence of 20 years, plus extensions, in the event of commercial discoveries.
As part of the agreement Circle will contribute towards the cost of the Amir SE-1 exploration well which targeted the Nubia Sandstone at a depth of 12,870 feet. The Nubia Sandstone is a well known producer within the Gulf of Suez Basin and in the area of the proposed Amir SE-1 exploration well, it is approximately 1200 feet thick. The drilling rig contract was due to be concluded and the well was scheduled to commence drilling in early February 2008. The structure is a partial dip and fault closure and has an operator estimated potential of 100MMBO in situ based on the present outlined closure area.
David Hough, CEO of Circle, said, “This discovery is excellent news. It is particularly pleasing combined with our gas production start-up in Morocco and our recent successful fund raising. These events leave the Company in a very strong position. They give us the option to bring the Al Amir SE-1 ST well into production quickly with infrastructure approximately 6 kms away and will also allow us to carry out our ambitious plan to drill 15 wells over the next 24 months on our North African licenses. It is indeed a busy and exciting time for Circle.”
On the other hand, the Al-Amir SE-1 is able to sustain production rates of 3,388 barrels of oil and 4.25 million cubic feet of gas per day, Thompson Financial reported.
Commenting on the farm-in agreement previously before the phase of production Hough said, “This is another exciting farm-in for Circle Oil bringing with it the opportunity to develop a lasting relationship with a progressive Egyptian Oil Company. If successful, it will allow fast track appraisal and development of the field into an existing infrastructure. This is in line with our stated strategy which we are pursuing vigorously in order to further enhance Circle’s position.”
Circle Oil is an international oil & gas exploration and development company with a growing portfolio of assets in Egypt, Morocco, Tunisia, Namibia, Oman and Panama. The company listed on AIM in October 2004.
Circle has the largest license holding of any company in Oman. In addition to Block 52, the company also has an ongoing exploration program in onshore Block 49.
Worldwide, the company is active in exploration in the Owambo Basin, Namibia; in the Caribbean Sea, offshore Panama; the Rharb Basin, Morocco; the Ras Mamour Permit in southern Tunisia and Grombalia Permit in northern Tunisia.
By: Ahmed MorsyDownload