Circle secures funding and spuds Morocco and Oman onshore wells
Circle Oil has agreed with KGL Investment Company (KGL) to extend its USD 30m convertible loan maturity date two year to July 2017 and has seen exploration progress in North Africa and the Middle East
Circle hopes that the extension will boost overall operational and financial flexibility. In tandem with this refinancing and mindful of ongoing oil price volatility, it is reviewing its cost base and capital commitments to ensure it is optimally placed to mitigate the impact of ongoing oil price volatility.
"Circle continues to perform well in what is a challenging environment for oil and gas companies,” said, Steve Jenkins Circle chairman. “This has been partially mitigated by favourable, stable gas pricing for our Moroccan gas production and the improved payment schedule in Egypt. Steady progress is being made on all our licence areas which includes a continuous, exploration drilling campaign in Morocco and development drilling in Egypt. Corporately, we are taking the steps needed to ensure the future growth of the business, widening and strengthening the skill set of the board and ensuring we have sufficient financial resources to allow the company to grow to its full potential".
Onshore Morocco, following the successful testing and completion of the KSR-12 well, Circle has spudded the KAB-1bis well in the Sebou Permit, the fourth well in the twelve well campaign.
As previously indicated, heavy rains have prevented access to part of Circle's northerly permit of Lalla Mimouna, so as to avoid delay, the rig was moved and set up to drill the KAB-1bis well on the Sebou Permit.
Although further modifications to the drilling sequence may be required due to weather and ground conditions, the rig is scheduled to move to drill Circle's first wells on the Lalla Mimouna permit, following completion of the KAB-1bis well.
This well is located downthrown to the NW-SE trending N'zala Fault in the north western area of the Sebou 3D survey. The KAB-1bis well is a redrill of the 2011 KAB-1 well, in which gas shows were observed but problematic swelling clays created borehole instability and the well could not be logged or tested. KAB-1 encountered good gas shows in the target Miocene top Guebbas sands. KAB-1bis has the same target with an adapted mud system to minimise drilling problems in a slightly more updip location. The primary target Guebbas sands are prognosed at a depth of 1,272 metres MD and the TD of the well at 1,360 metres MD. The Company regards this well as lower risk due to the fact that a specially adapted drilling mud to assist with the drilling is being used and the fact that good gas shows were encountered in the first drilling run.
Daily production from the Sebou permit continues at 6.5 - 7 MMscf/d (gross) in line with previous guidance.
With the continued success of the current drilling campaign, which has initially enabled the replacement of depleted reserves, Circle is now adding to its overall total reserve base. As the Morocco drilling campaign continues, the Company anticipates being able to increase its sales of gas incrementally to both existing and new customers over the next two years. Local demand for natural gas remains strong and the Company continues to benefit from good pricing, contract terms and the overall fiscal regime.
Circle has also announced the start-up for drilling of the well Shisr-1 in Block 49, onshore Southern Oman.
The Shisr-1well is located in the south-east area of Block 49 onshore in the Dhofar Province of southern Oman. It lies on the north-western dipslope of the north east trending Ghudun High and updip of the Dauka-1 well in the central area of the Block 49 3D survey.
The proposed well targets two vertically coincident seismic anomalies. Both targets are potentially oil-bearing Haima Group sands of Ordovician age. The prospective trap is a combination of stratigraphic pinchout onto the Ghudun high and downdip structural closure. The primary target Hasirah sands are prognosed at a depth of 1,890 metres MD and the secondary target Ghudun sands are prognosed at a depth of 2,420 metres MD, with the TD of the well prognosed at 2,550 metres MD. The well has an expected drilling duration of six to eight weeks to reach TD without including any allowance for possible testing. The completion of the well fulfils Circle's obligations in respect of this block. As has been stated previously, management views this as a high risk commitment well with a low possibility of success.
- Oil and Gas Technology
- Published on:
- February 12, 2015
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