Pressure on Circle Oil as time called on $20m loan

Pressure is mounting on Irish-founded exploration firm Circle Oil, with one of its chief lenders looking for a $20m (€18.3m) loan to be repaid, with interest, next month.

Circle — which has its roots in Limerick and its operational focus on northern Africa — has a total debt mountain of $77.5m (€71m); $57.5m of which is owed to the World Bank-affiliated International Finance Corporaton.

The $20m due to be repaid by November 15 is a convertible loan held by a subsidiary of KGL Investment Company.

Recently published interim results showed Circle Oil generated a first-half loss of nearly $150m and had cash of just $7.3m as of the end of June.

Earlier in the year, Circle launched a strategic review — essentially putting itself up for sale — to clear debt.

Last month it said it had received “a number of offers” for different combinations of its assets and negotiations are ongoing with a short-list of parties.

Yesterday, Circle, whose shares have been suspended since late June, said it is continuing to discuss its position with its lenders “in an effort to identify a way forward in the very near future” that will allow a completion of the review process.

Elsewhere, yesterday, Dublin-based Lansdowne Oil and Gas announced London-based natural resources investment firm Brandon Hill Capital has a direct and indirect interest in the company amounting to just under 85.1m shares, or 17.72% of its issued share capital.

Having narrowed its first half losses and raised much-needed emergency funding, earlier this year, Lansdowne is focused on creating value from its 20% shareholding in Providence Resources’ Barryroe field in the Celtic Sea.