RE: Curcle Oil News YesterdayYou need to read their full release - and that's why the selling. Note the comments about reducing Gemsa production to 7-8K bpd until water flood is installed. Not surprisingly, Arrata conspicuously failed to mention anything about this clearly material information...
Circle Oil Notes Flow Rates of 1.65MMscfd at Al Amir SE Discovery
Circle Oil plc
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Monday, November 22, 2010
NW Gemsa Concession
Circle Oil announced the following operational update on its activities in Egypt, Oman and Tunisia.
Positive result from sixth appraisal well in Al Amir SEdiscovery area as flow rates of 1,575 bopd and 1.65MMscfd of gas areachieved
Further potential extension found to previously discovered LowerRudeis Formation oil and gas which will be subject to furtherevaluation in future wells
2D Seismic program of 5,000km offshore Oman to commence on schedule in December and conclude in January
Circle proceeding with plans to increase holding in Tunisian Grombalia Permit - Drilling on target for early 2011
Egypt - NW Gemsa Development Lease
The exploration/appraisal well Al Ola-1X reached TD at 14,323ft inthe Lower Rudeis, following drilling through the Kareem Formation. Loganalysis has shown both sand units of the Kareem Formation to be oilbearing with no indication of the OWC. Formation pressure testingshowed some limited communication with the updip Al Amir SE producersand the well has proven up the southern Al Amir SE field extension inthe Al Ola area. The Top Shagar was encountered at 9,731ft MD with 6ftof net pay and Top Rahmi at 9,782ft MD with 19ft of net pay (operatorfigures). The oil column is presently down to the base Rahmi Sand at9,802ft MD (9,719ft SS).
Circle is delighted to confirm that, on initial testing at clean up,the Kareem Rahmi Formation Sandstones flowed 42° API oil at an averagerate of 1,575 bopd and 1.65 MMscfd of gas using a 32/64" choke from thelower of the two identified pay zones in the interval 9,780ft MD to9,800ft MD.
The well, which is the sixth appraisal well to be drilled in the AlAmir SE discovery area, was shut in for a pressure build up and laterplaced on stream at an initial rate of 1,500bopd and 1.6MMscf/d of gasusing a 32/64" choke.
The secondary target in the Lower Rudeis Formation was encounteredwith two hydrocarbon bearing intervals from 13,425ft MD to13,460ft MDand 13,510ft MD to13,540ft MD. This occurrence proves up the extensionof the Lower Rudeis accumulation in the Al Amir SE-6X well, located 3.6kilometers to the northwest. Due to repeated and multiple mechanicalproblems, final testing of the Lower Rudeis intervals could not becompleted. Further appraisal of the Lower Rudeis is to be undertakenwith future wells.
The next well to be drilled is Al Amir SE-7X, to be located to thewest of the Al Amir SE-4X well. This well is intended to be a waterinjector for the Kareem sands, but is presently planned to be deepenedto evaluate the Lower Rudeis potential.
Until water injection is installed and proven effective in the AlAmir SE field, it is planned to reduce the NW Gemsa production rate aspart of good field management practice. Gross production from the AlAmir SE and Geyad fields, for an interim period, is expected to be7,000-8,000 bopd after which oil production levels will besystematically and incrementally increased together with the planned gasproduction.
The NW Gemsa Concession, containing the Al Amir and Geyad DevelopmentLeases, covering an area of over 264 square kilometers, lies about 300kilometers southeast of Cairo in a partially unexplored area of the Gulfof Suez Basin. The concession agreement includes the right ofconversion to a production license of 20 years, plus extensions, in theevent of commercial discoveries. The North West Gemsa Concessionpartners include: Vegas Oil and Gas (50% interest and operator); CircleOil Plc (40% interest); and Sea Dragon Energy (10% interest).
Oman - Block 52
We have been informed by the appointed contractor BGP that theseismic vessel contracted to undertake the Block 52 2D seismic survey isscheduled to arrive in Muscat on 25 November 2010. Followingpre-survey testing the vessel will sail to site to commence theacquisition of 5,000 kms of full fold 2D seismic data. Acquisition willbe undertaken though December 2010 with the survey finishing in January2011.
Tunisia - Grombalia Permit
Planning for the commitment well to be drilled early 2011 is advancedand long lead drilling materials have been ordered. In line with theagreement with its partner Exxoil, Circle has commenced the process toincrease its working interest from 15% to 36%. The Partnership arepresently finalizing technical studies to decide the final drillinglocation by the end of this year.
Commenting Prof. Chris Green, CEO, said, "Al Ola -1X has once againproven up the Kareem sands and importantly proven up the field extensionin the south. This ultimately is expected to have a positive impact ontotal reserve numbers. We will now start water injection supportdrilling whilst at the same time further evaluating the Lower Rudeispotential. Planning and execution will now be concentrated on goodfield management and development with a view to the optimization ofresources and production together with the commencement of gasproduction.
Block 52 seismic acquisition will be starting up at the end of themonth and Tunisia will be featuring in the operational work schedule infirst quarter 2011.