LONDON (Alliance News) - Circle Oil PLC Thursday said it has reached an agreement with KGL Investment Co to extend the due date of the company's convertible loan and said it is now receiving steady payments from the Egyptian government following a change in policy.
The company was due to repay USD30 million in relation to the convertible loan provided by KGL on July 19, 2015, but after holding discussions, Circle confirmed it has extended the maturity of the convertible loan until at least July 2017.
"In tandem with this refinancing and mindful of ongoing oil price volatility, Circle, is reviewing its cost base and capital commitments to ensure it is optimally placed to mitigate the impact of ongoing oil price volatility," said the company.
At the end of December, the company reported a cash balance of USD34 million.
At its Al Amir SE and Geyad fields in Egypt, Circle said production remains in line with its guidance at 9,100 to 9,200 gross barrels of oil per day and 10.0 million standard cubic feet of gas per day. The company said current production levels will be maintained throughout 2015.
Circle has also recently received a USD15 million payment from the Egyptian government and said it "continues to receive regular payments" as a result of the Egyptian government's decision to pay down its oil and gas related debts to encourage further investment in the country.
Daily production from the Sebou permit in Morocco stands at 6.5 million to 7.0 million gross standard cubic feet of gas per day, which is in line with the company's guidance.
"As the Morocco drilling campaign continues, the company anticipates being able to increase its sales of gas incrementally to both existing and new customers over the next two years," said Circle.
"Circle continues to perform well in what is a challenging environment for oil and gas companies. This has been partially mitigated by favourable, stable gas pricing for our Moroccan gas production and the improved payment schedule in Egypt," said Chairman Steve Jenkins.
Cirlce said the process to renew its Mahdia permit in Tunisia for another three years is underway, and said it is still awaiting final approval to allow drilling to begin on the Ras Marmour permit, also in Tunisia.
The company has also begun drilling the Shisr-1 well on Block 49 in southern Oman and said it continues to seek a farm in partner for Block 52 in Oman. Circle noted the low oil price has provided an "added challenge."
Circle Oil shares were up 1.9% to 12.10 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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