Circle Oil placing raises $65m

OIL and gas exploration company, Circle Oil, headquartered in Limerick, has raised $65 million (€49m), via a second share placing in 12 months, in order to aid its medium-term growth prospects.

The AIM-listed company — which mainly operates in northern Africa and the middle-east — announced the placing of 141.7 million new ordinary shares (at 30p per share) yesterday and said that the proceeds would go towards accelerating its exploration activities and realising its net production target of 10,000+ barrels of oil equivalent per day (boepd) over the next three years.

“With these fresh funds, we can accelerate our activities and we’re well positioned to take advantage of new opportunities emerging in our regions of operation. I believe this marks the beginning of a new period of growth for Circle Oil,” said the company’s chief executive Chris Green. Circle’s main two areas of interest are Egypt and Morocco — to date the only two regions where they have begun to produce from — although a significant part of the new funds will go towards furthering development at its assets elsewhere including Oman and Tunisia.

Indeed, $26m will go towards accelerating Circle’s drilling programme in Oman, with $11m of the new funds earmarked for Tunisia. Although rival Irish exploration company, Petroceltic yesterday announced the abandonment of one of its Tunisian-based wells, after finding insufficient quantities of oil to warrant further work; Circle remains confident over that country as a prospect. “Both of our permits there are located in an area which has good historical production results and is producing oil at the moment,” said Mr Green.

The remainder of the new funds (the company raised £16.5m (€20m) last year through a separate share placing) will go towards bringing gas on stream in Egypt to complement its existing oil producing asset there and on accelerating drilling work in its gas producing assets in Morocco.