Circle Oil to continue expanding asset base

Circle Oil is to continue expanding its asset base in the Middle East and North Africa, both organically and via acquisition.

Circle Oil to continue expanding asset base

The Limerick-headquartered exploration firm yesterday reported a 13% year-on-year increase in revenues for the first six months of this year to $47.8m (€36.3m), although profits dipped due mainly to a decline in oil recovery costs.

Gross profits dropped from $18.6m to $16.4m and earnings before interest, taxes, depreciation, and amortisation fell by 10% to $22.6m.

Pre-tax profit was down by 36%, year-on-year, from $14.7m to $9.4m, on the back of increased exploration activity.

Earlier in the year, Circle agreed a senior debt facility totalling $100m with its lenders, with the first draw-down occurring in April.

The firm ended the first half with available cash of $29.9m; nearly 30% more than was the case at the halfway point in 2013.

Operationally, Circle had a good first-half, with seismic surveying completed in Oman and successful drilling campaigns in Egypt and Morocco, where production at its gas pipeline also rose, adding further to its revenues in the country.

Last month, Circle saw its share price and market value soar on the back of strong early results from its maiden offshore drilling exercise — off the coast of Tunisia — suggesting recoverable resources of around 100m barrels of oil at one well on the Mahdia Permit.

Management termed the current activity landscape as “an exciting period” for the company and its shareholders — with new drilling in Morocco and the Middle-East expected — giving “further near and mid-term opportunity to grow the company for the benefit of all stakeholders.”

“Recently completed operations offshore Tunisia and forthcoming operations in both Oman and onshore Tunisia have the potential to further enhance our asset base.

“Circle will endeavour to grow the business in the Middle East and North Africa region, both through the drill-bit and with carefully selected, value-driven operations and acquisitions,” stated chairman, Stephen Jenkins on the back of yesterday’s results.

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