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Circle Acquires 30% Interest in Beni Khaled License

Source: 7/25/2013, Location: Africa

Circle Oil Plc, the international oil and gas exploration, development and production company, is pleased to announce the following update regarding its operations in Tunisia.

The Company has entered into an agreement with Exxoil S.A. ("Exxoil"), the partner in its existing onshore licences, to farm into the Beni Khaled production licence (the "Licence") which is centred in the Cap Bon peninsula, Tunisia.

Under the terms of the agreement Circle will acquire an initial 30% interest in the Licence in return for funding a 50 sq km 3D seismic programme and one well, with Circle's funding expected to be US$5 million. The agreement further allows for Circle to increase its share in the Licence to 50% in two equal stages by funding one well in each stage up to US$2 million per well. The farm-in will be funded from Circle's existing cash flow, resources and facilities. Exxoil will remain as operator of the Licence.

The Licence area contains the undeveloped Bir Drassen discovery, well BDR-1, which under test flowed at a test rate of 23.5 MMscf/d of gas and 28 bcpd and also indicates the potential for an unappraised oil rim.

Initial operator estimates of most likely recoverable resources from the Bir Drassen discovery indicate 47-50 bcf of gas with the possibility of an additional 6 MMbo in the oil rim. In addition, two further undrilled leads have been identified within the production licence to be confirmed by the 3D seismic survey.

The 3D seismic acquisition is presently planned to start in late 2013/early Q1 2014 with first drilling presently planned for early H2 2014.

The Licence presently produces, from the Beni Khaled field, approximately 80 - 100 bopd of light oil (50?API) from one well, EBK-1, and contains additional possible fault bounded extensions to the Beni Khaled oilfield itself. Historical production has so far produced some 1.2 MMbo and Circle estimates indicate the field now has 0.25-0.5 MMbo remaining to be produced. The Beni Khaled production licence has a remaining term of 19 years.

The agreement to farm into the Beni Khaled licence is subject to the necessary approvals of the Tunisian government and relevant authorities.

Prof Chris Green, CEO, said:
"We are pleased to announce this farm-in with a proven discovery and additional potential upside. This farm-in is the start of furthering the Company's development for the near to mid-term and represents an opportunity to monetise a low risk opportunity in the near-term."

For more information about related Opportunities and Key Players visit North Africa Projects

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