Circle Oil posts positive appraisal drilling results

Circle Oil, an international oil and gas exploration, development and production company, has said the Geyad-6 well in Egypt, which begun drilling in September, has now been placed on production at an initial flow rate of 913 barrels per day (bpd).

The well encountered seven foot of net pay and flowed oil and gas on test at an average rate of 1,559 bpd and 1.346m square cubic feet per day, respectively.

Following the successful completion of the Geyad-6 ST1 well, the rig has been mobilised to drill the infill production on the Al Amir SE 13 well.

Currently production from the AASE, Geyad and Al Ola fields is approximately 9,100 bopd (gross). Cumulative production from the NW Gemsa Concession has now exceeded 9.4m barrels of 42 degree API Crude oil and water injection has now reached a cumulative injection of approximately 6.4m barrels.

Chief Executive Officer Prof Chris Green said: "Circle is pleased with the results of the Geyad-6 ST1 well, completed as a Shagar oil producer. This well result further proves up the northern extent and pressure communication of the Geyad field and will add to the ultimate recovery from the field. The rig has now being moved to drill the AASE-13 well, which is intended as a central western infill producer, for the AASE field well and is part of the overall plan to improve the productivity of the NW Gemsa accumulations."

On Monday Investec reiterated its buy rating on the stock, along with its 80p price target, saying: "Drilling is on track to improve the productivity of the NW Gemsa accumulations (COP 40%). Newsflow will focus on Tunisia, where a two well programme is scheduled to start soon. The stock trades at a significant discount to our core NAV [net asset value] of its existing producing assets in Egypt and Morocco of 28p."

NR