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Circle Oil profits fall as expected but drilling programme excites

Wed, 03rd Sep 2014 09:12

Interim profits fell by more than a third at Circle Oil, in line with expectations, as it invested in its Moroccan drilling campaign.Oil production in Egypt continued on a "solid footing" after successful drilling added new producers, while Morocco's gas production now contributes increasingly to revenues as industrial off-take of gas through its pipeline was maintained.On revenue up 13% to $47.8m, pre-tax profit fell 36% to $9.4m due to increased expenditure, the implementation of the new senior debt facility with the World Bank and a reduction in cost recovery in the North West Gemsa permit.The extra spending is paying off, said chief executive Chris Green: "Circle's continuing efforts in exploration and development activities for the first half of 2014 have been rewarded with a successful start to the third Moroccan drilling campaign in the SAH-W1 discovery in the Sebou permit." Available cash at end-June was $29.9m, up by 27%, with the debt facility agreed in March offering $100m.Circle achieved an average oil price in Egypt of $104.32 per barrel and a gas price in Morocco of $10.31 per million standard cubic feet (MMscf).Green added that the recent potential discovery offshore Tunisia adds near and mid-term opportunity, opening and extends the prospectivity over the whole Mahdia permit that management believe could be a "game-changing event" in Circle's development. "An exciting period is ahead with the second half of the year including new drilling in both Morocco and onshore Oman," he added.OH
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