Circle Oil has announced that theGeyad-2X ST1 well has commenced production in the onshore NW Gemsa Concession. Production has started from the upper of the two identified pay zones in the Kareem Shagar Sandstone. The lower untested pay zone, in the Kareem Rahmi Sandstone, will be further evaluated at a later date.

The Geyad-2X ST1 well is producing at a rate of approx. 2100 bopd. Overall, adjusted daily production from the Al Amir Development Lease and the two Geyad wells is now over 9200 bopd. Cumulative oil production from the area since production began in late February 2009 is now over 1.3 MMbbls.

The NW Gemsa Concession, containing the Al Amir Development Lease and covering an area of over 260 sq kms, lies about 300 kms southeast of Cairo in a partially unexplored area of the Gulf of Suez Basin. The concession agreement includes the right of conversion to a production licence of 20 years, plus extensions, in the event of commercial discoveries. The NW Gemsa Concession partners include: Vegas Oil and Gas (50% interest and operator); Circle Oil (40% interest); and Sea Dragon Energy (10% interest).

The rig is now drilling the Al-Amir SE-5 well where, as previously announced, the primary target is the Kareem Formation. This well is being drilled primarily to delineate a potential reservoir boundary.

David Hough, CEO of Circle said: ''We are obviously delighted to be able to announce that Geyad-2 is in production and that daily production from the concession has climbed to over 9200 bopd. We are now resuming our drilling programme in the Al Amir area where the next well, Al Amir SE-5, is being drilled for reservoir delineation purposes.