Circle Oil provides the following operational update in respect of its activities in Oman, Morocco and Namibia.

Oman Block 49 Mobilisation for the 3D seismic survey in Block 49 onshore Oman has commenced. The survey, planned to cover some 900 square kilometres, is being undertaken by Sinopec and is scheduled to last approximately four months from commencement of acquisition. HSE start up audit and source testing is expected to begin later this week with actual field acquisition commencing after crew acceptance. The data acquired will be field QC processed before full 3D processing in the UK.

Oman Block 52 Tender documents have been prepared for the acquisition of 5,000 kilometres of commitment 2D marine seismic. The areas to be surveyed have been delineated and are aimed at providing the necessary data to firm up multiple leads which have been already identified and mapped from the first phase of 2D seismic. Actual acquisition timing will be dependant on the outcome of the tender which will confirm the availability of marine acquisition boats for the survey.

Morocco The Sebou Permit continues to experience abnormally high amounts of winter rainfall and consequently severe flooding has occurred over the permit. At the present time a large portion of the licence area is flooded and civil engineering works in preparation for the forthcoming 2010 drilling campaign remain suspended. It is difficult to predict when work will re-commence. In view of the foregoing it is probable that drilling will not begin until the end of the first half. An update will be provided once it is possible to assess the situation with more certainty. Pre-planning for the new pipeline has, nonetheless, continued and the required construction materials have been tendered for. The contract has been awarded for the supply of over 60 kilometres of 6-inch pipeline. Approvals procedures continue in parallel.

Production over the last three months has been largely maintained at 1.5 mmscfd due to the ability to switch production between wells, but even with this ability there has been some periodic minor disturbance to production.

Namibia Circle is still awaiting payment from Petro-Holland Ltd for the Owambo Basin Permit farm-in as per the agreement signed in September 2008. The protracted delay has been due to Petro-Holland finalising their internal financial arrangements.

Commenting, David Hough, CEO of Circle, said, 'I am pleased with our progress in Oman and in particular that the 3D seismic programme in Block 49 is now effectively underway. Success in Oman could provide Circle with some real 'company making' opportunities. While we planned for some flooding delay to drilling in Morocco, the weather conditions have been much more severe than anticipated. Nonetheless production has been all but maintained and I look forward to getting the drilling programme underway once the flood waters have receded.'

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