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Thursday, August 20, 2015
Circle Oil saw its application to renew its exploration permit on the Mahdia Block approved by Tunisian authorities. The permit has been extended for three years, taking Circle to January 2018 on the block.
The extension of the license carries with it a one exploration well and one appraisal well commitment and a requirement to acquire 300 sq km of 3D seismic.
The Mahdia Permit lies offshore Tunisia and covers an area of 3,024 sq km. The permit contains the El Mediouni structure which was drilled by Circle’s EMD-1 well in August of last year. The well encountered notable oil shows in the Ketatna (Oligo-Miocene) carbonates. While mud losses prevented log data acquisition, Circle considers the shows to indicate a significant resource from the structure.
The permit also contains a number of similar prospects which the company look forward to exploring in further detail.
Circle, who holds the permit with a 100% interest, is looking for a suitable partner for the permit. The company said it has already had initial expressions of interest from a number of oil and gas companies with the financial strength and industry experience to make them suitable JV partners. The confirmation of this extension of the permit will give interested parties greater certainty in making a formal approach and should greatly assist the company in concluding an agreement.
This farm-out strategy will minimize Circle’s financial commitment, reduce risk, and still allow the company to benefit from the potential of the discovery. This approach is fully consistent with Circle’s strategy to grow the company in a sustainable manner and deliver value to shareholders in a low oil-price environment.
Mitch Flegg, CEO of the company said, “Circle Oil wishes to place on record our thanks to the Tunisian Consultative Committee on Hydrocarbons. We look forward to continuing to work with them with the aim of delivering a project which would bring considerable benefit to the people of Tunisia and to Circle. We will now move forward with the process of identifying a suitable partner or partners to work with us to realize the value of this exciting discovery.”
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