Circle Oil Announce Directorate Change and Give Operating Update
The Board of Circle Oil PLC (“Circle”) announces that Professor Chris Green, Chief Executive Officer, has given notice of his intention to step down from the Board and resign from the Company. Professor Green has agreed with the Board to remain in his role for a suitable period to ensure a smooth handover to his successor. The Board is commencing a process to find a new Chief Executive Officer as well as make additional appointments to the Board to further broaden its experience and expertise.
The Company also announces the following operating update
Drilling continues on the KSR-12 exploration well in the Sebou Permit. The well has a primary target in the Mid Hoot interval and a secondary target in the Upper Guebbas. The present planned TD of the well is 1,980 metres MD. Upon completion of KSR-12, the present drilling rig will be demobilised and returned to work with another operator.
Drilling will recommence on the next well in the campaign with another rig which presently is being mobilised. This rig is the subject of a long term contract to provide continuous cover and continuity for drilling the remaining nine wells in the exploration programme for the Sebou and Lalla Mimouna permits. It will also be used for any required work-overs and testing programmes. With the possible onset of late autumnal and early winter rains the next wells will be drilled on higher ground in the Lalla Mimouna permit before returning to the Sebou permit.
Production levels continue to run in line with Company expectations at 7MMscf/d.
Production in the NW Gemsa and Geyad permits continues in line with predicted production profiles with oil production varying between 9,300 and 9,700 bopd and gas delivery at 10-11 MMscf/d. Variations in production continue to be a function of individual well performance and the effectiveness of the ongoing workover programmes.
The dynamic reservoir model is now in operation to monitor and model future fluid and gas movements and budgets are being finalised for 2015 in line with Company expectations.
Receivables levels continue to be in line with previous guidance and regular payments continue to be received from EGPC. The Company is presently expecting an additional one-off payment from the recently announced special tranche allocated to reduce overall oil company debt in the country.
Following completion of the Mahdia well, reinterpretation of the 3D integrating the well results has been ongoing to produce final data to permit the commencement of a farm-out for future appraisal of the Mahdia Block. The Company has already received expressions of interest from a number of companies to participate in a farm out process. This will be actively pursued in the coming months. The Company is in discussion with the Tunisian authorities regarding the renewal of the permit for a further 3 years.
The Company has also now finalised arrangements with the contractors for the Mahdia well and is now in a position to update the market on costs. As a result of various delays and technical challenges, the cost of the well is at the top end of the Board’s expectations. However, as a result of its existing financial resources and operational cashflow, this additional cost will not impact on the Company’s operational plans going forward.
The Company awaits further news from the operator regarding the well to be drilled in the Ras Marmour permit.
The Company is now actively engaged in preparations to commence drilling the Block 49 commitment well. Access roads over 20 kilometres in length have been constructed to the main road and the drilling rig base and mud pits have also been completed. The drilling rig has been identified and contracts are being finalised. The Shisr-1 well will target the main prospect at 1,883 metres MD and a secondary target at 2,669 metres MD with a TD of 2,768 metres MD. The Company internal estimate of most likely recoverable resources is 14 MMBO.
Discussions continue regarding the possibility of a farm-out in the offshore Block 52 and the results of the 2014 2D seismic survey have been incorporated into the database. The results have confirmed the presence of the shallow water prospects and added a fourth prospect to this portfolio.
Steve Jenkins, Chairman, said,
“I would like to thank Chris for his contribution to Circle over the last eight years, four of those as CEO. Together with the wider team, Chris’s technical knowledge and extensive industry experience has delivered industry leading results with the drill bit, which has transformed Circle into its current position as a full cycle Middle East and Africa focused oil and gas exploration and production company. I, and the Board, wish him every success for the future.
Our operations continue and we eagerly await the result of the third Moroccan well. Whilst we have more wells to drill in the Sebou area, given the possibility of uncertain weather we will move to drill targets on higher land in Lalla Mimouna over the late autumn and winter. The forthcoming Oman Block 49 well will provide added interest, however, this is a high risk commitment well and we would be delighted if it was successful. Trading for 2014 presently continues in line with expectations.”
Professor Chris Green commented,
“I am very proud of what we have achieved at Circle over the last few years. However, after over eight years at Circle I feel that now is the right time for me to step down. Circle Oil has a very exciting future ahead. I wish the team well and I am confident in their abilities to deliver on the Company’s significant potential.”