Oil & Gas Corporate News
Circle Oil (LON:COP) (BUY, £0.90) (COP, 37p, ? (1.33%)) announce that the ADD-1 exploration well has been drilled, logged and successfully tested in the Sebou Permit, Rharb Basin, Morocco. The Company confirms a gas discovery in both the Main Hoot target and the secondary Guebbas target. The well first tested gas at a sustained rate of 3.57mmscf/d on a 24/64" choke from the Main Hoot. The perforated Main Hoot zone of 4.4m at 969.6-974m MD has a calculated net gas pay of 4m. The Guebbas zone was then perforated and flowed gas at a sustained rate of 1.89mmscf/d on a 16/64" choke. The perforated Guebbas zone of 2.1m at 889.4-891.5m MD has a calculated net gas pay of 1.5m. The well is being completed as a potential producer. A full technical evaluation of all the results of the well is underway. This will allow for forward planning as a precursor to further assessment of the resource, including conducting an extended well test to give a more complete estimation of the reserves. The drilling rig is now moving to commence testing DRJ-6, being the untested well from the previous drilling campaign, with a calculated 4m of net gas pay in the Guebbas. Following this, the exploration well KSR-11, the fifth and final well in the current campaign will be drilled. The re-entering or re-drilling of the KAB-1 well (the first well of the current campaign, drilled in September 2010, and which encountered drilling problems), will be postponed to a later date pending third party evaluation and recommendation of a suitable drilling fluid to enable the well to be successfully drilled, logged and completed. This is required to counter a problem with swelling clay experienced on first drilling.
Comment: This is the third gas discovery in 4 wells drilled so far in the current drilling campaign, a continuation of the excellent track record of the Company in Morocco. Circle Oil is steadily adding up reserves and Morocco will soon be a significant contributor to the bottom-line. The installation of the new pipeline will soon commence and will be ready to flow by the beginning of July, increasing transport capacity from 3mmscfd to in excess of 23mmscfd. Current production capacity, not counting the discoveries made in the latest drilling campaign, is about 7mmscfd and we anticipate that the three last discoveries would…
