Circle Oil has provided a positive operating update on drilling in Morocco where the recently completed KSR-12 well in the Sebou permit has made a "significant gas discovery". The well has penetrated over 20 metres of net gas pay (most wells in this area have been encountering 3-4 metres) and has flowed over to produce over 1700boe/d and should lead to a significant boost to recoverable gas reserves in Morocco.
Heavy rains have affected some drilling and have altered the drilling sequence, however, overall the drilling programme has delivered better results than expected to date. It's a bit early to exactly quantify the potential reserves upgrade, but with a high gas price, good fiscal terms and infrastructure in place, any reasonable upgrade to reserves could potentially have a strong positive impact on our risked NAV and target price.
Adapted from press release by Joe Green