Circle Oil acquires interests in Tunisian acreage

Circle Oil PLC has acquired interests in acreage in Tunisia under a farm-in agreement signed with Exxoil Tunisie. The deal is subject to final approval from Tunisian authorities.

Apr 16th, 2007

Uchenna Izundu
International Editor

LONDON, Apr. 16 -- Circle Oil PLC has acquired interests in acreage in Tunisia under a farm-in agreement signed with Exxoil Tunisie. The deal is subject to final approval from Tunisian authorities.

Circle Oil acquired a 36% interest in the Grombalia permit in northern Tunisia joining operator Exxoil Tunisie and ETAP as a partner. The companies plan to shoot 2D seismic in late spring and will drill two mature prospects in fourth-quarter 2007 and first-quarter 2008.

"The first well is planned to be drilled into a fault block targeting a level that is producing in an adjacent field," Circle Oil said. "The second well is planned to be drilled in very shallow water close to shore. This well will test a larger structure with two-way dip and two-way fault closure within the same geological sequence that has seen a number of drilling successes within the permit," it added.

Circle Oil also gained a 23% interest in the Ras Mamour permit in southern Tunisia. Part of this work program includes drilling an onshore well late this year or in early 2008 that will target a structure geologically and structurally similar to nearby producing Ezzaouia field.

Circle Oil farmed in to the permits because they are near existing production and infrastructure and provide exploration and appraisal opportunities with short lead times. If the wells are successful, they can be put into production quickly, the company said. Circle Oil will contribute to the initial capital expenditures for both projects.

A number of other potentially good prospects have been identified within the two permits that can be considered for future drilling as well, Circle Oil added.

Contact Uchenna Izundu at uchennai@pennwell.com

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