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Circle Oil to ramp up operations in 14

Monday, December 16 16:14:38

Limerick-based, North Africa and Middle East- focussed oil and gas group, Circle Oil, today said it has plans to significantly ramp up operations in the New Year.

In Tunisia, it recently announced the award of the Grombalia permit, following a competitive bid process. As stated in the announcement, Circle will be the operator and hold a 100pc working interest in the new licence and has the right to apply for conversion to production licence areas in the event of exploration success. The permit covers an area that includes existing oil and gas field concessions and Circle has identified multiple prospects and many leads having similar geological features to known accumulations.

In Egypt, Circle's NW Gemsa Permit has current gross production of approximately 11,100 bopd and 11.8 MMscf/d of gas giving total gross daily production of 13,150 boepd. Cumulative production to date is 13.7 MMbo and 3.4 bcf of gas giving at total cumulative production of 14.3 MMboe. '" Receipts from EGPC for the year are expected to be in-line with our forecast and are also expected to be higher than those in 2012. On the back of increased gross production levels of 3.75MMbo for 2013 up from 3.16MMbo for 2012, receivables due at year-end are forecast to be lower than those at previous year end," it said.

In Morocco, drilling is expected to start in the next few weeks - aimed at adding 30bcf to the reserve base.

Meanwhile, in Oman, the firm has put in a bid for an onshore block in the 2013 round and expects to update the market early next year.

On block 49, drilling of one exploration well is expected in the first half while a seismic vessel is expected to kick off a programme on block 52 early in the first quarter.

Analysis from Investec in Dublin said Circle continues to show growing momentum.

"Today's operational update in our view highlights further evidence of this and we expect 2014 to be a catalyst-heavy period. Drilling in Morocco will begin in the "coming weeks" while rig negotiations in Tunisia are ongoing. Both campaigns offer high impact potential. Production performance in Egypt and Morocco continues to trend strongly. We trim our target price, primarily on a more conservative view of exploration, but reiterate our Buy ahead of a busy 2014," it said.