Circle Oil, an oil and gas exploration, development and production company, has revealed that its wholly owned subsidiary Circle Oil Maroc (COML) has signed a petroleum agreement with the Office National des Hydrocarbures et des Mines (ONHYM) for the Lalla Mimouna area covering the exploration and exploitation of hydrocarbons for the Lalla Mimouna Nord and Lalla Mimouna Sud exploration permits situated in the Rharb basin, Morocco.
The permits cover an area of over 2,200sqkm and are issued for an initial period of eight years with the right of automatic conversion to a minimum (but extendable) 25 year exploitation period in relation to areas where it is agreed that commercially exploitable hydrocarbons have been discovered. Under the terms of the agreement the percentage interest in the permits is COML 75% and ONHYM 25%.
COML has agreed to carry out an initial target of 80sqkm 3D seismic survey to assist in the assessment and ranking of prospects already identified in the area and to assess any newly identified prospects. The agreement also requires the completion of a minimum two well drilling programme in the first three years of the permits.
Both Lalla Mimouna exploration permits are, in the main, geologically similar in nature to Circle Oil’s existing Sebou Permit (296sqkm) and with the extended combined area it provides Circle Oil with substantial opportunity to further explore for, and exploit more natural gas accumulations in the Rharb basin.
David Hough, chief executive of Circle Oil, said: “This agreement is very significant as it provides Circle with a much larger low risk permit area, similar in both geology and background to our existing Sebou Permit. If our exploration programme is successful in the new Lalla Mimouna area, with its already recognised potential for low cost, fast track development and production, the permits are ideally placed geographically to feed into the new gas pipeline planned for construction later this year.
“Continuing success here will add to the long term earnings contribution for the company. Circle was delighted to be offered participation in these permits by ONHYM as it further underlines our commitment to assist in hydrocarbon exploration and production in Morocco. Future drilling programmes will cover prospects within both our Sebou permit and the newly added Lalla Mimouna permits”.