Circle Oil in its operational and financial update announced that in conjunction with Office National des Hydrocarbures et des Mines (ONHYM), it has entered into a Memorandum of Understanding (MOU) with SBS Porcher in Morocco. 

The MOU allows Circle oil to sell the gas found during the Sebou drilling campaign.

Under the agreement, a new pipeline extension about 15-18 km will be built to connect the current pipeline owned by Circle Oil in the northern Kenitra region to the Porcher factory in the central Kenitra area. Porcher is to be the operator and also fund the pipeline extension with construction scheduled to begin in May 2016 and first gas expected to flow in Q4 of 2016.

The new contract which has a duration of 5 years, when signed will allow Circle Oil reaching higher gas prices as well as access a potential new customer base in central Kenitra.

The company also announced that the infill drilling campaign on the North West Gemsa field in Egypt is progressing. The Al Amir SE-23 was been drilled to Total Depth, completed and connected to production infrastructure. The well witnessed a testing program on February 6, 2016 and the well flowed at a gross average rate of 4,081bpd and 2.715Mmcfpd through a 48/64" choke while drilling began on the Al Amir SE-24 well on 8 February 2016.

Meanwhile in Tunisia, the company is also progressing with the farm-out process for the Mahdia permit. Circle Oil is still in talks with a number of potential buyers in spite of the current market situations.

“We are very pleased with the gas pricing agreed with Porcher in Morocco. The realized price of around $12 per mcf is over 40% higher than the average price realized under our existing contracts and we look forward to signing binding documentation. We believe that this will set a benchmark for future gas sales contracts. In Egypt, the AASE-23 well adds welcome additional production to the field and we look forward to announcing the results of the AASE-24 well when available,” Mitch Flegg (photo) Circle Oil’s CEO told Energy-pedia.

Anita Fatunji