Circle Oil Plc, the international oil and gas exploration, development and Production Company, is pleased to announce the 2011 update to Ultimate Recoverable Resources (“URR”) 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.
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 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). 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).
The2011 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).
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.
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.”