(Ecofin Agency) - In Circle Oil’s 2015 interim results released of late, the company said it has updated its operations in Morocco where it has made a number of competent improvements in-country and appointed a new country manager. Towards decrease costs in the country the company has renegotiated a number of local supply contracts and restructured the supply chain.

Circle has benefited immensely from both reduced operating costs and reduced rig down-time, seeing a fall in well costs of over $1.0 million per well.

Also adding to its overall bottom line in Morocco is the use of its own pipeline which has additional capacity for new gas supply. Due to existing infrastructure, the threshold for commerciality for any new discoveries is relatively low and the company continues to look to add reserves both through its drilling program and any other opportunities that might arise.

The cumulative production from Circle’s wells in the Sebou Permit through to the end of June 2015 was 8.59 Bcf.

Sebou average daily gas production was 6.2 Mmcf/d during H1 and negotiations are under way for further off-take to increase the supplies to and revenue from both existing customers and new industrial partners moving into the Kenitra region. 

On the operational end, drilling activities on the onshore Sebou and Lalla Mimouna blocks have continued throughout H1. In Sebou, the notable success was the SAH-W1 well which encountered gas shows at different levels within the target Guebbas sands. 

Circle is to produce from the lowermost Guebbas zone where 3.6 meters of net pay was discovered and flowed at a sustained rate of 4.94 Mmcf/d. This well was tied-in to existing production facilities in July.  The KAB-1bis exploration well, also in the Sebou permit, was drilled in February 2015 and encountered very limited gas shows and due to this, was plugged and abandoned.  The KSR-12 discovery well, drilled in the Sebou permit in late-2014, has also been connected for production and was successfully brought on line during May.  The well is producing at rates of up to 2 Mmcf/d.

There has been mixed results in Lalla Mimouna to date, with the first well LAM-1 targeting Miocene gas-bearing sands similar to the Sebou Permit.  LAM-1was tested and the primary target flowed gas at a stabilized rate of 1.9 Mmcf/d and the secondary target was perforated and flowed at a stabilized rate of 1.1 Mmcf/d.  Post period, ANS-2 and NFA-1 wells were drilled and although both encountered gas shows at the targeted depth, the interpretation of wire line logs indicated that the reservoir quality encountered in the wells did not meet the company’s pre-drill estimates.  Circle is however continuing to review the data gathered and in partnership with ONHYM will prioritize the next prospects to drill. Petroleumafrica reports.

Subsequently the Lalla Mimouna wells, the rig has now returned to the Sebou permit in the Rharb Basin, the location of Circle’s existing production wells.