Circle Oil Provide Egypt Update

Circle Oil has announced an update regarding the Al Amir SE field ('AASE') and the Geyad field.

AASE-14X ST 1 well

Infill production well AASE -14X, located centrally in the field midway between AASE-1X ST1 and AASE-12X ST1 was spud on 26 November 2012. The well was planned as a Shagar and Rahmi sand producer and was sidetracked for geological reasons on 4 January 2013 as AASE-14X ST1. The well has encountered 20 ft MD of gross Shagar sand (9,610-9,630 ft MD) with 16 ft MD net pay, plus 15 ft MD of gross Rahmi sand (9,680-9,695 ft MD) with 13 ft MD net pay, with a total depth of 10,000 ft MD.

Production

Production from the AASE and Geyad fields averaged 9,091 bopd (gross) through January 2013. Cumulative production from the NW Gemsa Concession has now exceeded 10.4 million barrels of 42 degree API Crude oil. The 12 inch gas pipeline has now been tied in and gas production started up on 12 February 2013. The initial flow rate at start-up was 8 MMscf/d (1,456 boepd) and is currently 9 MMscf/d (1,638 boepd). The gas is rich in extractable liquids that will add significantly to the income stream for Circle. Gas processing is expected to provide an additional 140 - 150 bocd and 35 tonnes (c. 400 boepd) of LNG per day.

Work on finalising the development and day to day operations of the AASE and Geyad fields will continue through 2013. The 2013 work programme includes the drilling of 4 further wells (1 producer and 3 injectors) in the first half of the year.

The NW Gemsa Concession, containing the Al Amir and Geyad Development Leases, covering an area of over 260 sq kms, lies about 300 kms 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 (40% interest) and Sea Dragon Energy (10% interest).