Circle Oil provides the following update regarding operations in its Grombalia Permit.

The Bou Argoub-1 (BAB-1) exploration well in the South West Belli area of the Grombalia Permit, near to the Belli, El Manzah, and Beni Khaled fields commenced drilling on 30 October 2012. The target for the well was a fault-bounded structural culmination crossing two vertically stacked fractured carbonate reservoirs, the Eocene Bou Dabbous Formation and the Late Cretaceous Abiod Formation. These are the main oil-producing formations in the north-eastern part of Tunisia. BAB-1 reached a total depth of 1,520 metres in the Abiod formation and was completed on budget.

The expected Bou Dabbous reservoir rock was encountered from 1,109.5 to 1,199.5 metres MD with gas and oil shows detected in the finely crystalline limestones with calcite filled micro fractures. The second target formation the Abiod was encountered from 1,432.5 to 1,520 metres MD, consisting of hard crystalline limestones with weak oil and gas shows. The indications of hydrocarbons in the Bou Dabbous Formation were encouraging, though following the receipt of full log analysis results from the service company the limestones at this location were shown to have insufficient reservoir quality and hydrocarbon saturation to produce hydrocarbons at commercial rates.

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