Oil and gas exploration firm Circle Oil has confirmed it has found gas in Morocco.
The Limerick-based group announced the preliminary results of drilling of the well SAH-W1 in the Sebou Permit, about 3.2 km to the south west of the main gas gathering station.
Circle said the well was spud on May 19th and drilled to a TD of 1,263 metres MD. Gas shows were encountered at three levels within the target Guebbas sands, but seven inch casing had to be installed before drilling a six inch hole through the main target interval. The company said wireline logging confirmed the presence of three gas-bearing zones, and subsequent pressure testing in the six inch hole confirmed permeable high pressure reservoirs.
The net pay from wireline log analysis is six metres in the Top Guebbas, six metres in the main target Intra Guebbas and three metres in the lower part of the Intra Guebbas. Circle said the plan is to produce the three zones sequentially from the bottom up, where the highest pressure is present.
"We are delighted to add another successful discovery to our Sebou gas portfolio. This is the first well of a six well programme to be drilled with our partner ONHYM in the Sebou permit and is coupled with another six well programme in the Lalla Mimouna permit," said Circle Oil chief executive Prof Chris Green.
Investec said in a note to investors that while the accumulations reported by Circle were small, they have “excellent economics owing to low well costs, Morocco’s fiscal terms and local gas demand.”
Circle, which concentrates on the Middle East and Africa, signed a loan agreement of up to $100 million earlier this year to allow it to invest in new exploration and development. The company signed the facility, which matures in June 2018, against its producing assets in Egypt and Morocco.
