Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to announce the following update regarding its operations in Tunisia.
Circle Oil Tunisia Limited ( "Circle Tunisia"), a wholly owned subsidiary of the Company, has reached agreement with Tethys Oil and Mining Inc ("Tethys") to acquire the remaining 30% working interest in the offshore Mahdia exploration licence area in Tunisia (the "Licence").
Under the terms of the agreement Circle Tunisia will, subject to the approval of the Tunisian authorities, acquire the remaining 30% interest in the Licence in return for a payment of US$3 million payable in two separate tranches. The acquisition will be funded from Circle's existing cash flow and internal resources. Following completion of the terms of the agreement, Circle Tunisia, will hold a 100% working interest in the Licence.
The Licence, which was recently the subject of a 3D marine seismic survey, contains multiple prospects and leads, the first two of which are designated the El Medouini prospect and the West El Medouini prospect. Circle's management estimates, which have been validated by independent third party consultants, indicate that these two prospects contain 125 MMBO and 55 MMBO unrisked most likely STOOIP resources respectively.
The Licence has a work commitment to drill one well before July 19, 2014. The recent 3D marine survey was aimed at confirming the final choice of target for the commitment well and also to provide the necessary data to facilitate entry into future phases of exploration and undertake any resultant commitments within the Licence area.
Prof Chris Green, CEO Circle, said:
"We are pleased to announce this acquisition which increases our working interest to 100% in this prospective offshore permit and is another step in strengthening our portfolio. The increased interest provides us with greater flexibility for progressing this permit, and maximising value in the event of a successful well."