Circle Oil sees revenue jump by 26%

Limerick-based exploration company Circle Oil has reported a 26% jump in revenue as the company benefited from higher oil and gas prices and a rise in cash from its Egyptian operations.

The company reported revenues of $73.3m (€56.4m) for the 12 months ending Dec 2012.

The exploration group said this helped push up operating profits by 41% to $28.2m, resulting in a pre-tax profit of $25.25m

“2012 was another successful year for Circle during a challenging period, given the scale of change in our core area of operations,” chairman Thomas Anderson said. “We increased operating profitability, improved cash flow and positioned the company for expansion in the coming period.”

Cash received from the Egyptian national oil company EGPC also increased by 243% to $39.3m in 2012 as the political climate in the country cooled.

Investec analyst Brian Gallagher said that in the face of a tough political and operational environment the company had performed very strongly.

“Against a tough political and operational backdrop, COP has delivered a very impressive set of FY 2012 results. In the period, cash from operations jumped 243% while receivables also improved. In addition, the E&P has significantly enhanced its funding position through increased volumes, a rising cash balance and a new $12.5m two-year working capital facility.”

The company reported it had completed a gas pipeline in Egypt which will facilitate gas production. Circle is also increasing its recovery ratio through a water-pumping operation in Egypt.

Mr Gallagher strongly recommended a ‘buy’ rating on the stock which he believes is not getting adequate attention from the market.