TIDMCOP
RNS Number : 0678I
Circle Oil PLC
08 June 2011
8 June 2011
Circle Oil Plc
("Circle" or the "Company")
Resources Update
Circle Oil Plc (AIM: COP), the international oil and gas
exploration, development and production company, is pleased to
announce the 2011 update to Ultimate Recoverable Resources
("URR")(1) for the NW Gemsa Concession, Egypt, and the Sebou
Permit, Morocco, which indicates a significant increase over the
2010 URR estimates for both permits. The updated gross estimates
were compiled by RPS Energy ("RPS"),an independent consultancy
specialising in petroleum and gas reservoir evaluation. The
estimates use the 2007 Petroleum Resources Management System
("PRMS") produced by SPE/WPC/AAPG/SPEE and are set out in the
tables below together with further explanation of the results.
Egypt
The new resource estimates take account of the results of the
drilling and development activity up to but not including
Geyad-3.^
The RPS report(2) states that the most likely (P50) URR for the
discoveries in NW Gemsa in Al Amir SE, Geyad plus South Gharib in
Al Amir are 30.0MMBO and 34.2 bcf of gas, which together equates to
35.9MMBOE gross (14.4MMBOE net).(3) This constitutes a 49% increase
over the 2010 figure of 24.1MMBOE gross (9.6MMBOE net). The most
likely unrisked URR in the Kareem reservoir in the Al Amir prospect
is 3.9 MMBOE gross with a geological probability of success of 84%,
as assigned by RPS. The Al Amir Kareem area volume was included in
the Al Amir SE URR in the 2010 report, as at that time it was
considered as an adjoining portion to Al Amir SE which had and has
still not been drilled, but could be reasonably judged to be
economically productive on the basis of geological, geophysical and
engineering data. The 2011 total most likely (P50) recoverable
resources estimate, to compare like with like areas (including Al
Amir Kareem) with the 2010 report, is 33.2MMBO and 38.1 bcf of gas,
which together equates to 39.8MMBOE gross (15.9MMBOE net). This
constitutes a 65.1% increase over the 2010 figure of 24.1MMBOE
gross (9.6MMBOE net).
The upside estimate (P10) for the discovered fields increases to
54.5MMBOE gross (21.8MMBOE net) which represents a 33% increase
over the 2010 figure of 41.0MMBOE (16.4MMBOE net). The unrisked
upside estimate of URR in the Kareem reservoir in the Al Amir
prospect is 9.3MMBOE gross (3.7MMBOE net). The 2011 total upside
(P10) recoverable resources estimate, to compare like with like
areas, is 63.8MMBOE gross (25.5MMBOE net), which constitutes a
55.6% increase over the 2010 figure of 41.0MMBOE gross (16.4MMBOE
net).
The increase in URR is due to a large increase in the estimated
recovery factor from the Kareem reservoir which results from
observation of well production performance data and the positive
effect of the planned installation of gas production and water
injection facilities, which are expected to be completed by the end
of 2011.
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).
2011 ON BLOCK URR (MMBOE)(*) 2010 ON BLOCK URR (MMBOE)(**)
--------------------------------------------- --------------------------------------------
Field MOST REC. REC. Field MOST REC. REC.
Formation LIKELY FAC. UPSIDE FAC. Formation LIKELY FAC. UPSIDE FAC.
----------- ------- ------ ------- ------ ---------- ------- ------ ------- ------
Resources in discovered fields (***)
-------------------------------------------------------------------------------------------
AL AMIR
SE KAREEM
AL AMIR + AL AMIR
SE KAREEM 31.3 40.0% 45.1 50.0% KAREEM 19.5 32.5% 31.6 45.0%
----------- ------- ------ ------- ------ ---------- ------- ------ ------- ------
GEYAD GEYAD
KAREEM 3.2 40.0% 6.1 50.0% KAREEM 3.2 32.5% 6.1 32.5%
----------- ------- ------ ------- ------ ---------- ------- ------ ------- ------
AL AMIR AL AMIR
S GHARIB 1.4 17.5% 3.3 25.0% S GHARIB 1.4 17.5% 3.3 25.0%
----------- ------- ------ ------- ------ ---------- ------- ------ ------- ------
GROSS GROSS
TOTAL 35.9 54.5 TOTAL 24.1 41.0
----------- ------- ------ ------- ------ ---------- ------- ------ ------- ------
NET TOTAL 14.4 21.8 NET TOTAL 9.6 16.4
----------- ------- ------ ------- ------ ---------- ------- ------ ------- ------
AL AMIR Included with Al Amir
Prospective Resources(***) KAREEM SE in RPS 2010 report
--------------------------------------------- ---------- --------------------------------
AL AMIR
KAREEM 3.9 27.5% 9.3 40.0%
----------- ------- ------ ------- ------ ---------- ------- ------ ------- ------
(**) 2010 URR INCLUDES 1.1 MMBO
PRODUCED BY END DEC 2009
GROSS (*** ) NO economic cut off has
TOTAL 3.9 9.3 been applied
----------- ------- ------ ------- ------ --------------------------------------------
NET TOTAL 1.6 3.7
----------- ------- ------ ------- ------ ---------- ------- ------ ------- ------
(*) 2011 URR INCLUDES 4.1 MMBO
PRODUCED BY END DEC 2010
(*** ) NO economic cut off has
been applied
--------------------------------------------- ---------- ------- ------ ------- ------
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.
Morocco
The new resource estimates take account of the results of the
drilling up to and including KSR-11.^^
The RPS estimate of most likely (P50) URR of gas is 30.6 bcf
gross (23.0 bcf net).This, together with our own internal estimate
of gas production and resources remaining to be produced in areas
not included in the report of 1.5 bcf gross, gives a total of 32.1
bcf gross (23.9 bcf net) URR for the Sebou block. This represents a
significant increase in gas resources of 83.4% over the 2010 figure
of 17.5 bcf gross (13.0 bcf net).
The RPS estimate of upside (P10) URR is 41.7 bcf gross (31.3 bcf
net) which together with our own internal estimate of resources in
areas not included in the report of 1.5 bcf gross, gives a total of
43.2 bcf gross (32.2 bcf net) for 2011, which represents a 66%
increase over the 2010 figure of 26.0 bcf gross (19.3 bcf net).
In the Sebou concession, Circle has a 75% share and ONHYM, the
Moroccan State oil company, has a 25% share. In the Oulad N'zala
concession, Circle has a 60% share and ONHYM has a 40% share. Both
concessions include the right of conversion to a production licence
of 25 years, plus extensions in the event of commercial
discoveries.
2011 ON BLOCK URR (bcf) 2010 ON BLOCK URR (bcf)
-------------------------------------------- -----------------------------------------
MOST REC. REC. MOST REC. REC.
LIKELY FAC. UPSIDE FAC. LIKELY FAC. UPSIDE FAC.
-------- ------- ------- ------- ------- ------- ------- ------ ------- ------
RPS Estimates
---------------------------------------------------------------------------------------
SEBOU
SEBOU + +
OULAD OULAD
N'ZALA 70.0 80.0 N'ZALA
GROSS 30.6 -87.5% 41.7 -95.0% GROSS 16.2 87.5% 24.7 95%
-------- ------- ------- ------- ------- ------- ------- ------ ------- ------
NET 23.0 31.3 NET 12.2 18.6
-------- ------- ------- ------- ------- ------- ------- ------ ------- ------
Circle Estimate of Resources in Assets Not Reviewed by RPS
---------------------------------------------------------------------------------------
SEBOU
SEBOU + +
OULAD OULAD
N'ZALA N'ZALA
GROSS GROSS
# 1.5 ## 1.3
-------- ---------------------------------- ------- --------------------------------
NET 0.9 NET 0.8
-------- ---------------------------------- ------- --------------------------------
( ) (##) 2010 CIRCLE URR INCLUDES
(#) 2011 CIRCLE URR INCLUDES GAS PRODUCED AND REMAINING TO
GAS PRODUCED AND REMAINING TO BE PRODUCED BY END DEC 2009
BE PRODUCED BY END DEC 2010
-------------------------------------------- -----------------------------------------
The Sebou permit lies to the north-east of Rabat in the Rharb
Basin in Morocco. The Rharb Basin is a foredeep basin located in
the external zone of the Rif Folded belt.
Prof Chris Green, CEO, said
"I am very pleased to report this significant uplift in resource
numbers for the oil and gas discoveries on our NW Gemsa and Sebou
blocks. This is testimony to both the continuing advancement of the
partnership's development and appraisal programme in Egypt and the
success of our exploration drilling in Morocco. It also highlights
the way in which the Company has been utilizing the funds raised
from the placing in 2010 to create value for our shareholders. Our
drilling success rate over the past three years has been excellent.
We continue with our task of increasing both our production
capability and resource base."
(1) URR values are based on notional development schemes with no
economic limit test applied
(2 ) RPS remit was to estimate URR from the discovered fields
and from the undrilled Al Amir Kareem prospect
(3 ) The conversion factor used is 5.81 Bcf of gas is 1 million
barrels of oil equivalent.
^ Geyad-3
Circle issued an RNS announcement on 23 May 2011 relating to a
positive result from the Geyad-3 appraisal/development well.
Details of this are available at
http://www.circleoil.net/23May2011.htm
^^ KSR-11
Circle issued a operational update on 15 April 2011 relating to
a positive result from the KSR - 11 exploration well. Details of
this discovery are available at
http://www.circleoil.net/15April2011.htm
Glossary
SPE The Society of Petroleum Engineers
WPC The World Petroleum Council
AAPG The American Association of Petroleum Geologists
SPEE The Society of Petroleum Evaluation Engineers
bcf Billions of cubic feet of gas
MMBO Millions of barrels of oil
MMBOE Millions of barrels of oil equivalent
ONHYM Office National de Hydrocarbures et des Mines
In accordance with the guidelines of the AIM Market of the
London Stock Exchange, Professor Chris Green, Chief Executive
Officer of Circle Oil Plc,an explorationist and geophysicist with
over thirty years oil & gas industry experience, and Dr Stuart
Harker, VP Geology, also with over 30 years experience, are the
qualified persons as defined in the London Stock Exchange's Note
for Mining and Oil and Gas Companies - June 2009, who has reviewed
and approved the technical information contained in this
announcement as provided by an independent third party.
For further information contact:
Circle Oil Plc (+44 20 7638 9571)
Professor Chris Green, CEO
Evolution Securities (+44 20 7071 4300)
Chris Sim
Neil Elliot
Fox-Davies Capital (+44 20 3463 5010)
Daniel Fox-Davies
Philip Davies
David Porter
Citigate Dewe Rogerson (+44 20 7638 9571)
Martin Jackson
Kate Lehane
Murray Consultants (+353 1 498 0300)
Joe Murray
Joe Heron
Notes to Editors
Circle Oil Plc (AIM: COP) is an international oil & gas
exploration, development and production Company with an expanding
portfolio of assets in Morocco, Tunisia, Oman and Egypt with a
combination of low-risk near-term production and significant
exploration upside potential. The Company listed on AIM in October
2004.
Internationally, the Company has continued to expand its
portfolio over the past 2 years and now has assets in the Rharb
Basin, Morocco; the Ras Marmour Permit in southern Tunisia; the
Mahdia Permit offshore Tunisia; the Grombalia Permit in northern
Tunisia and the Zeit Bay area of Egypt. Circle also has the largest
licence holding of any company in Oman. In addition to its
prospective Block 52 offshore, Circle also has an ongoing
exploration program in Block 49 onshore.
Circle's strategy is to locate and secure additional licences in
prospective hydrocarbon provinces and through targeted investment
programmes, monetise the value in those assets for the benefit of
shareholders. This could be achieved through farm-outs to selected
partners who would then invest in and continue the development of
the asset into production, or Circle may itself opt to use its own
expertise to appraise reserves and bring assets into production,
generating sustained cash flow for further investment.
Further information on Circle is available on its website at
www.circleoil.net.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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