Circle Oil Plc, the international oil and gas exploration, development and production company, is pleased to announce the following update regarding the Al Amir SE Field Water Injection project and the Geyad-4 well (formerly Geyad-D) in the Geyad field.

Water Injection Al Amir SE Field

Water injection commenced successfully in the Al Amir SE field (AASE) on 27 September 2011 in the AASE-7X well in the Shagar and Rahmi sands and on 1 October 2011 in the AASE-8X well in the Rahmi sand. The combined water injection rate is currently approximately 10,000 bwpd and as of 14 December 2011 some 712,000 barrels have been injected.

Initial reservoir response to the water flooding operations has now been observed in the first line of producers namely the AASE-6 Shagar well and the AASE-4 Rahmi well.

Geyad-4 Well (previously Geyad-D)

Geyad-4 was spudded on 26 October 2011 and is located on the northern flank of the Geyad field, updip of the Geyad-2XST producer. The well’s objective was to appraise both the Shagar and Rahmi sands for production in that location. The well was successfully drilled to a total depth of 6,890 ft MD into the Upper Rudeis Formation.The well encountered 2.5 ft of possible pay in the shallow South Gharib heavy oil reservoir before encountering a fault and was sidetracked twice to the southwest, closer to Geyad-2XST.

The Rahmi zone was penetrated in the second sidetrack in Geyad-4ST2, 100 ft higher than in the Geyad-2XST well, thus allowing better access to the Rahmi oil reserves. The Rahmi zone was perforated in the interval 6,340-6,395 ft and flowed oil and gas on test at an average rate of 397 bopd and 0.76 MMscf/d respectively, on a 24/64″ choke. The Geyad-4ST2 well will be placed on production soon.  Water injection is planned to commence shortly with the Geyad-5 well, drilled earlier this year, in the southwestern part of the field.

Following the successful completion of the Geyad-4 well, the rig has now been mobilised to drill the water injector well AASE-10, located in the central western downdip flank of the Al Amir SE field.The well is planned to appraise both the Shagar and Rahmi sands for injection in that location.

Al Ola-2

The previously tested Al Ola-2 well remains shut-in at this time as we await final Government approval for extending the Al Amir SE Development Lease to the south and west of the current lease boundary.

Production

Production from the Al Amir SE and Geyad fields averaged approximately 7,300 bopd (gross) through November 2011.Cumulative production from the NW Gemsa Concession has now exceeded 6.8 million barrels of 42 degree API Crude oil.

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).

Prof Chris Green, CEO, said

“The successful side tracking of Geyad-4 and the first observation of a response to water injection in the Al Amir SE field moves the project further forward in line with our expectations and schedule. After just over two months of water injection we are beginning to see a response in the first line of producers. The rig has moved and is now spudding a well on the AASE-10 location intended as another injector for the Al Amir SE field as part of the overall plan to improve the productivity of the NW Gemsa accumulations.”