Circle Oil Plc Regulatory News (COP)

RNS Number : 6084S

Circle Oil PLC

14 September 2010

 

 

14 September 2010

 

 

CIRCLE OIL PLC

("Circle" or the "Company")

 

2010 INTERIM RESULTS

 

Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to announce its results for the six month period ended 30 June 2010.

 

Highlights

 

Morocco

- Gas wells KSR-8 and KSR-9 brought into production, with combined 1.4 to 2.0 MMscfd currently being produced using both at limited output

- Lalla Mimouna Nord and Sud blocks signed in January 2010, increasing our acreage position in the Rharb Basin from 230 sq km to 2,300 sq km

- 2010 drilling campaign of five wells recently commenced, plus the testing of one well which remained untested from the 2009 drilling campaign

 

Egypt

- Drilling continued on NW Gemsa permit with eight commercial wells completed since drilling began in mid 2008. A tenth well is presently drilling.

- 3.1 million barrels (gross) of 41o API oil have been produced from NW Gemsa permit by mid-September 2010

- Production continued in the Al Amir SE and Geyad to reach 9,000 to 9,500 bopd (gross) from eight wells in third quarter 2010

 

Financial

- Revenue of US$21.3 million recorded from oil and gas sales for the period (H1 2009: US$3.5 million)

- EBITDA of US$8.5 million (H1 2009: Loss US$1.2 million)

- Profit after tax of US$2.1 million (H1 2009: Loss US$15.9 million)

- Net cash generated by operations US$12.9 million (H1 2009: Net cash outflow US$4.3 million)

- Group total assets at 30 June 2010 of US$147.6 million: Group net assets of US$84.5 million

- Raised c. £42.5 million (c. US$65 million) in August 2010 in secondary placing of shares

 

Professor Chris Green, CEO, commented:

 

"I am delighted with the continuing progress of the Company during the first half of 2010.

 

We have recorded our first operating profit amounting to US$4.6 million for the half year 2010 and this augurs well for the future. In addition, the Group generated US$12.9 million cash from operations during the period.

 

Our daily production levels in Egypt have continued to increase and we are now planning to bring the associated gas into production. In Morocco, the second drilling campaign has commenced and we are working hard to bring the additional gas wells in Morocco on-stream by adding a larger capacity pipeline, which should result in a healthy increase in revenues.

 

Subsequent to 30 June a very successful funding was completed and US$65 million raised in a secondary placing of new shares in August. The proceeds of the placing will be used to accelerate the Company's existing portfolio and to also acquire additional assets.

 

Overall this is an excellent achievement for a relatively early stage company."

 

 

CHAIRMAN'S STATEMENT

 

Dear Shareholder,

 

This has been another very busy and eventful period for Circle with the drilling programme continuing in Egypt and successful results being achieved in every hole drilled and tested. The new drilling campaign has recently commenced in Morocco with one gas well remaining to be tested from the 2009 drilling campaign. We have recently completed a 900 sq km 3D seismic programme over Block 49 in Oman and will be analysing these results with the intention of proving up drill ready prospects as early as possible.

 

Over the period the Company has substantially increased production levels. We identified excellent prospects to drill and this has been confirmed by our successful drilling through both 2009 and in the first half of 2010. Full credit is due to our technical team for maintaining our success rate. Circle's share of oil and gas production is currently ranging between 3,850 and 4,150 boepd which sets us well on course towards our attributable production target of 10,000 boepd in the medium term.

 

OPERATIONS

 

Morocco

Production has been constrained by the limited capacity of the existing pipeline and this is being addressed by the construction of a new gas pipeline to allow us to supply potential customers in Kenitra, north of Rabat. Pre-planning for the new pipeline is completed and the pipe ordered. Two additional wells KSR-8 and KSR-9 have been put into limited production and the increased production and all of the output from the Sebou permit will be sold locally. We also plan to acquire additional 3D seismic in the new Lalla Mimouna Nord permit and existing Sebou permit to assist in the definition of prospects to drill with a view to further increasing our gas production. The new drilling programme of five wells has recently commenced with the first well in the Sebou permit designated KAB-1.

 

Egypt

Al Amir SE-1 to SE-6 are now on production together with Geyad 1X and 2ST giving a combined rate from the eight wells ranging between 9,000 to 9,500 bopd. In addition, a productive sand was tested in the Lower Rudeis of well Al Amir SE-6X, which provides a further exploration target for the block. Production testing of the heavy oil discovery at Al Amir 1 ST2 has been completed and results are being analysed for commerciality. The appraisal drilling continues and future successful wells will be connected to the existing infrastructure and brought into production as quickly as possible. It is also planned to drill water injection wells to provide pressure support and increase productivity for both the Al Amir SE and Geyad fields. Studies have now been completed to allow the associated gas to be put into production, which is expected to occur in the next six months.

 

Tunisia

The 2009 seismic acquisition completed over the offshore Mahdia Permit and the smaller 2D programme over the onshore Ras Marmour Permit, together with reinterpretation of seismic in the Grombalia Permit has resulted in firming up prospects for drilling. The latter, in the Grombalia Permit will be further refined for drilling, presently scheduled for early next year.

 

Oman

We have completed the field work on the 3D seismic survey on Block 49 and are now commencing the processing of the field data. When this is processed and interpreted we hope to identify a drilling target and set an early date to commence this drilling. We also issued a tender for a 5,000 km 2D marine seismic survey in Block 52 for execution later in the year.

 

 

FINANCIAL

 

Revenue from oil and gas sales in the first half of the year was US$21.25 million which represented a six fold increase over the same period in 2009 due mainly to increased production in the NW Gemsa permit in Egypt as a result of which the Company recorded a first operating profit of US$4.60 million (H1 2009: Loss US$1.29 million).

 

Finance costs at US$2.78 million were down by US$11.94 million on H1 2009 due to a significant reduction in the loss on the fair value of the conversion option relating to the convertible loan.

 

Net cash generated by operations amounted to US$12.93 million (H1 2009: Cash outflow US$4.3 million) and was mainly comprised of US$4.60 million from operating profit, US$3.87 million from depreciation and US$3.52 million from working capital changes.

 

At 30 June 2010 Group total assets amounted to US$147.65 million (H1 2009: US$103.78 million) while net assets amounted to US$84.49 million (H1 2009: US$51.47 million). The Company remains well funded with cash balances of US$10.89 million at 30 June 2010 which excludes US$65 million (gross) raised in August following a placing of its shares. Current cash position is US$66 million.

 

 

OUTLOOK

 

We plan to increase production in Egypt and, particularly so, in Morocco when the new pipeline is commissioned early next year. The most exciting development to look forward to however, is the drilling of Block 49 in Oman which, if successful, could be transformational.

 

We also hope to complete before the year-end a follow up 2D seismic study on the offshore Block 52 in Oman. We are also planning small targeted 2D seismic programmes on our onshore blocks in Tunisia to give us a better geological understanding in both permits.

 

As mentioned in the 2009 Annual Report in June, the Company is examining the possibility of adding value rapidly by investing in and acquiring development opportunities in the Middle-East and North Africa. A number of projects are presently under detailed technical and commercial review.

 

Thomas Anderson

Chairman

 

13 September 2010

 

Glossary

 

41o API Oil Gravity of 41 degrees on the American Petroleum Institute scale

bopd Barrels of oil per day

boepd Barrels of oil equivalent per day

EBITDA Earnings before interest, tax, depreciation and amortisation

MENA Middle-East/North Africa

MMscfd Million cubic feet per day

P1 development projects A discovered field with proven reserves awaiting development

P2 development projects A discovered field with proven plus probable reserves awaiting development

Sq km Square kilometres

2D Two dimensional

3D Three dimensional

 

 

 

Circle Oil PLC

CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2010 - UNAUDITED

 

	Notes	6 months to 30 June 2010		6 months to 30 June 2009		Year ended 31 December 2009
		US$000		US$000		US$000
Sales revenue	4	21,250		3,512		15,093
Cost of sales		(14,414)		(3,512)		(7,721)
Gross profit		6,836		-		7,372
Administrative expenses		(1,265)		(1,313)		(2,315)
Share option expense	2	(559)		(987)		(1,496)
Exploration costs written-off		(101)		-		(4,932)
Foreign exchange (loss)/gain		(312)		1,007		1,027
Operating profit/(loss) - continuing activities		4,599		(1,293)		(344)
Finance revenue		277		89		134
Finance costs	7	(2,784)		(14,720)		(13,265)
Profit/(loss) before taxation		2,092		(15,924)		(13,475)
Taxation		-		-		(34)
Profit /(loss) for the financial period		2,092		(15,924)		(13,509)
Basic and diluted earnings/(loss) per share	3	0.50c		(4.57c)		(3.66c)

 

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2010 - UNAUDITED

 

		6 months to  30 June 2010		6 months to 30 June 2009		Year ended 31 December 2009
		US$000		US$000		US$000
Profit/(loss) for the financial period		2,092		(15,924)		(13,509)
Total income and expense recognised in other comprehensive income		-		-		-
Total comprehensive income for the period - entirely attributable to equity holders		2,092		(15,924)		(13,509)

 

 

Circle Oil PLC

CONDENSED CONSOLIDATED statement of financial position

AT 30 JUNE 2010 - UNAUDITED

 

	Notes	30 June 2010		30 June 2009		31 December 2009
		US$000		US$000		US$000
Assets
Non-current assets
Exploration and evaluation assets	5	33,445		91,147		20,965
Production and development assets	6	80,497		-		74,767
Property, plant and equipment		133		249		210
		114,075		91,396		95,942
Current assets
Inventories		129		-		91
Trade and other receivables		22,543		3,602		13,789
Cash and cash equivalents		10,898		8,779		22,334
		33,570		12,381		36,214
Total assets		147,645		103,777		132,156
Equity and liabilities
Capital and reserves
Called up share capital		5,778		4,799		5,730
Share premium		104,092		78,393		103,336
Other reserves	2	6,644		4,826		5,999
Retained losses		(32,026)		(36,545)		(34,118)
Total equity		84,488		51,473		80,947
Non-current liabilities
Convertible loan - debt portion		22,886		20,344		21,562
Derivative financial instruments		14,923		17,146		14,403
Decommissioning provision		446		-		446
		38,255		37,490		36,411
Current liabilities
Trade and other payables		24,902		14,814		14,798
Total current liabilities		24,902		14,814		14,798
Total liabilities		63,157		52,304		51,209
Total equity and liabilities		147,645		103,777		132,156

 

 

 Circle Oil PLC

CONDENSED CONSOLIDATED cash flow statement

FOR THE SIX MONTHS ENDED 30 JUNE 2010 - UNAUDITED

	Notes	6 months to 30 June 2010		6 months to 30 June 2009		Year ended 31 December 2009
		US$000		US$000		US$000
Net cash generated/(used) by operations	8	12,929		(4,336)		(737)
Taxes paid		-		-		(21)
Net cash inflow/(outflow) from operating activities		12,929		(4,336)		(758)
Cash flows from investing activities
Payments to acquire exploration and evaluation assets		(12,905)		(20,058)		(12,372)
Payments to acquire production and development assets		(11,090)		-		(23,088)
Payments to acquire property, plant and equipment		(11)		(23)		(51)
Interest received		42		426		480
Net cash used in investing activities		(23,964)		(19,655)		(35,031)
Cash flows from financing activities
Issue of ordinary share capital		1,331		-		28,177
Financing costs		(527)		-		(1,958)
Interest paid		(893)		(907)		(1,800)
Net cash (outflow)/inflow from financing activities		(89)		(907)		24,419
Decrease in cash and cash equivalents		(11,124)		(24,898)		(11,370)
Cash and cash equivalents at beginning of period		22,334		32,670		32,670
Effect of foreign exchange rate changes		(312)		1,007		1,034
Cash and cash equivalents at end of period		10,898		8,779		22,334

 

 

Circle Oil PLC

consolidated STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2010 - UNAUDITED

 

		Share capital US$000		Share premium US$000		Share based payments reserve US$000		Translation reserve US$000		Accumulated losses US$000
At 1 January 2009		4,799		78,393		3,186		(3)		(20,621)
Issue of share capital		-		-		-		-		-
Share based payment		-		-		1,643		-		-
Net loss for period		-		-		-		-		(15,924)
At 30 June 2009		4,799		78,393		4,829		(3)		(36,545)
Issue of share capital		931		24,943		-		-		-
Share based payment		-		-		1,185		-		-
Reserve transfer		-		-		(12)		-		12
Net profit for period		-		-		-		-		2,415
At 31 December 2009		5,730		103,336		6,002		(3)		(34,118)
Issue of share capital		48		756		-		-		-
Share based payment		-		-		645		-		-
Net profit for period		-		-		-		-		2,092
At 30 June 2010		5,778		104,092		6,647		(3)		(32,026)

 

 

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2010

 

1. Basis of preparation

 

The condensed financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) and in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting.

 

The accounting policies and methods of computation used in these interim financial statements are consistent with those used in the most recent annual audited financial statements.

At the date of these interim financial statements the following Standards and Interpretation were in issue but not yet effective:

 

IFRS 9 Financial Instruments (effective for accounting periods beginning on or after 1 January 2013)

IAS 24 (revised Nov. 2009) Related Party Disclosures (effective for accounting periods beginning on or after 1 January 2011)

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (effective for accounting periods beginning on or after 1 July 2010)

 

The Directors anticipate that all of the above Standards and Interpretation will be adopted in the Group's financial statements in future periods and that they will have no material impact on the financial statements of the Group in the period of initial application.

 

2. Share option expense

 

The fair value of employee share options is recognised as an employee expense in the income statement (share option expense) and a corresponding reserve set up in the statement of financial position (other reserves). The associated expense is amortised over the vesting period of the share options. For the six months to 30 June 2010 a charge of US$559,000 arose (H1 2009: US$987,000).

 

3. Basic and diluted earnings/(loss) per share

 

The calculation of basic earnings/(loss) per share attributable to the ordinary equity holders is based on the following data:

 

	30 June 2010		30 June 2009		31 December 2009
	US$000		US$000		US$000
Profit/(loss) for period attributable to equity holders of the parent	2,092		(15,924)		(13,509)
	'000		'000		'000
Weighted average number of ordinary shares for the purposes of basic earnings per share	415,771		348,184		368,825

As all of the Group's potential ordinary shares were anti-dilutive for the period ended 30 June 2010 the diluted earnings/(loss) per share is not applicable.

 

4. Segmental reporting

Six months to 30 June 2010	Africa		Middle-East		Corporate		Total
	US$000		US$000		US$000		US$000
Sales revenue	21,250		-		-		21,250
Cost of sales	(14,414)		-		-		(14,414)
Segment result	6,836		-		-		6,836
Administrative expenses	(769)		(221)		(275)		(1,265)
Share option expense	-		-		(559)		(559)
Exploration costs written-off	(101)		-		-		(101)
Other losses	(59)		-		(253)		(312)
Operating profit/(loss)	5,907		(221)		(1,087)		4,599
Finance costs	-		-		(2,784)		(2,784)
Finance revenue	-		-		277		277
Profit/(loss) before tax	5,907		(221)		(3,594)		2,092
Taxation	-		-		-		-
Profit/(loss) after tax	5,907		(221)		(3,594)		2,092
Total assets	122,119		14,284		11,242		147,645
Total liabilities	(20,486)		(3,892)		(38,779)		(63,157)

 

Sales revenue in Africa of US$21.25 million (H1 2009: US$3.51 million) consists of US$20.11 million in oil sales in Egypt and US$1.14 million in gas sales in Morocco. Corporate comprises mainly corporate expenses, cash and other assets and liabilities not directly attributable to an operating segment.

 

Six months to 30 June 2009	Africa		Middle-East		Corporate		Total
	US$000		US$000		US$000		US$000
Sales revenue	3,512		-		-		3,512
Cost of sales	(3,512)		-		-		(3,512)
Segment result	-		-		-		-
Administrative expenses	(889)		(275)		(149)		(1,313)
Share option expense	-		-		(987)		(987)
Other gains	39		-		968		1,007
Operating loss	(850)		(275)		(168)		(1,293)
Finance costs	-		-		(14,720)		(14,720)
Finance revenue	-		-		89		89
Loss before tax	(850)		(275)		(14,799)		(15,924)
Taxation	-		-		-		-
Loss after taxation	(850)		(275)		(14,799)		(15,924)
Total assets	85,714		9,205		8,858		103,777
Total liabilities	(13,395)		(722)		(38,187)		(52,304)

 

Twelve months to 31 December 2009	Africa		Middle-East		Corporate		Total
	US$000		US$000		US$000		US$000
Sales revenue	15,093		-		-		15,093
Cost of sales	(7,721)		-		-		(7,721)
Segment result	7,372		-		-		7,372
Administrative expenses	(1,604)		(457)		(254)		(2,315)
Share option expense	-		-		(1,496)		(1,496)
Exploration costs written-off	(4,932)		-		-		(4,932)
Other gains	4		-		1,023		1,027
Operating profit/(loss)	840		(457)		(727)		(344)
Finance costs	-		-		(13,265)		(13,265)
Finance revenue	-		-		134		134
Profit/(loss) before tax	840		(457)		(13,858)		(13,475)
Taxation	-		-		(34)		(34)
Profit/(loss) after tax	840		(457)		(13,892)		(13,509)
Total assets	100,036		9,789		22,331		132,156
Total liabilities	(13,763)		(722)		(36,724)		(51,209)

 

5. Exploration and evaluation assets

 

The movement on exploration and evaluation assets which relate to oil and gas interests during the period was:

 

Six months to 30 June 2010		Opening balance US$000		Additions US$000		Provision for impairment US$000		Depreciation US$000		Transfer to production & development assets US$000		Closing balance US$000
Africa		11,224		7,994		(18)		-		-		19,200
Middle-East		9,741		4,504		-		-		-		14,245
Other		-		83		(83)		-		-		-
30 June 2010		20,965		12,581		(101)		-		-		33,445

 

 

Six months to 30 June 2009		Opening balance US$000		Additions US$000		Provision for impairment US$000		Depreciation US$000		Transfer to production & development assets US$000		Closing balance US$000
Africa		57,537		27,844		-		(3,512)		-		81,869
Middle-East		8,181		988		-		-		-		9,169
Other		109		-		-		-		-		109
30 June 2009		65,827		28,832		-		(3,512)		-		91,147

 

 

Twelve months to 31 December 2009		Opening balance US$000		Additions US$000		Provision for impairment US$000		Depreciation US$000		Transfer to production & development assets US$000		Closing balance US$000
Africa		57,537		2,031		(4,620)		-		(43,724)		11,224
Middle-East		8,181		1,560		-		-		-		9,741
Other		109		203		(312)		-		-		-
31 December 2009		65,827		3,794		(4,932)		-		(43,724)		20,965

 

 

Oil and gas interests at 30 June 2010 represent exploration and related expenditure on the Group's licences & permits in the geographical areas noted above. The realisation of these intangible assets by the Group is dependent on the development of economic reserves and the ability of the Group to raise sufficient funds to develop these interests. Should the development of economic reserves prove unsuccessful, the carrying value in the statement of financial position will be written off.

 

The Directors have considered whether facts or circumstances exist that indicate that exploration and evaluation assets are impaired and consider that no impairment loss is required to be recognised as at 30 June 2010. Exploration and evaluation assets have been assessed for impairment having regard to the likelihood of further expenditures and ongoing appraisal for each geographical area.

 

6. Production and development assets

 

The movement on production and development assets which relate to oil and gas interests during the period was:

 

Cost		Africa US$000		Total US$000
At 1 January 2009		-		-
Additions		-		-
At 30 June 2009		-		-
Transfer from exploration and evaluation assets		43,724		43,724
Additions		34,565		34,565
At 31 December 2009		78,289		78,289
Additions		9,512		9,512
At 30 June 2010		87,801		87,801

 

Accumulated depreciation		Africa US$000		Total US$000
At 1 January 2009		-		-
Charge for financial period		-		-
At 30 June 2009		-		-
Charge for financial period		3,522		3,522
At 31 December 2009		3,522		3,522
Charge for financial period		3,782		3,782
At 30 June 2010		7,304		7,304

 

Net book value		Africa US$000		Total US$000
At 30 June 2009		-		-
At 31 December 2009		74,767		74,767
At 30 June 2010		80,497		80,497

 

7. Finance costs

 

		6 months to 30 June 2010		6 months to 30 June 2009		Year ended 31 December 2009
		US$000		US$000		US$000
Interest payable:
Convertible loan		2,217		1,990		4,100
Capitalised to exploration and evaluation assets		(10)		(337)		(144)
Capitalised to production and development assets		(178)		-		(1,016)
Loss on fair value of conversion option		755		12,223		10,225
Loss on fair value of additional option		-		844		100
		2,784		14,720		13,265

 

 Interest payable relating to the convertible loan includes interest paid of US$893,000 (H1 2009: US$907,000) and an effective interest expense (non-cash) of US$1.30 million (H1 2009: US$1.06 million) plus amortisation of transaction costs of US$28,000 (H1 2009: US$28,000).

 

The loss recorded on the conversion option relating to the convertible loan (non-cash) of US$755,000

(H1 2009: US$12.22 million) arose mainly as a result of the increase in the Company share price from £0.30 at 31 December 2009 to £0.33 at 30 June 2010.

 

8. Reconciliation of operating loss to net cash used by operations

 

		6 months to 30 June 2010		6 months to 30 June 2009		Year ended 31 December 2009
		US$000		US$000		US$000
Operating profit/(loss)		4,599		(1,293)		(344)
Increase/(decrease) in trade and other payables		12,721		(84)		2,069
Increase in trade and other receivables		(9,195)		(3,023)		(11,438)
Increase in inventory		(38)		-		(91)
Write-off of exploration costs		101		-		4,932
Foreign exchange loss/(gain)		312		(1,007)		(1,034)
Depreciation		3,870		84		3,673
Share option expense		559		987		1,496
Net cash generated/(used) by operations		12,929		(4,336)		(737)

 

9. Post balance sheet event

On 3 August 2010, the Company announced the successful placing of 141,666,667 new ordinary shares at 30p per share to a number of institutional investors for gross proceeds of £42.50 million (US$65.0 million).

 

10. Interim Report

 

Copies of the Interim Report are available by download from the Company's web-site at www.circleoil.net

For further information contact: 

Circle Oil Plc (+44 20 7638 9571) Professor Chris Green, CEO

Brendan McMorrow, CFO

Evolution Securities (+44 20 7071 4300) Rob Collins Chris Sim Neil Elliot

Fox-Davies Capital (+44 20 7936 5230) Daniel Fox-Davies

Philip Davies

David Porter

 

Citigate Dewe Rogerson (+44 20 7638 9571) Martin Jackson George Cazenove

Murray Consultants (+353 1 498 0320) Joe Murray Joe Heron

In accordance with the guidelines of the AIM Market of the London Stock Exchange, Professor Chris Green, Chief Executive Officer of Circle Oil Plc, an explorationist and geophysicist with over thirty years oil & gas industry experience, is the qualified person, as defined in the London Stock Exchange's Guidance Note for Mining and Oil and Gas companies, who has reviewed and approved the technical information contained in this announcement. Professor Green has, in certain instances, relied on primary information supplied by the operator in carrying out his review.

Notes to Editors

 

Circle Oil Plc (AIM: COP) is an international oil & gas exploration, development and production Company with an expanding portfolio of assets in Morocco, Tunisia, Oman and Egypt, with a combination of producing, low-risk near-term production and acreage with significant upside exploration potential.  The Company listed on AIM in October 2004.

 

Internationally, the Company has continued to expand its portfolio over the past 2 years and now has assets in the Rharb Basin, Morocco; the Ras Marmour Permit in southern Tunisia; the Mahdia Permit offshore Tunisia; the Grombalia Permit in northern Tunisia; and the Zeit Bay area of Egypt. Circle also has the largest licence holding of any Company in Oman. In addition to offshore Block 52, the Company also has an ongoing exploration program in Block 49 onshore.

 

The Company's strategy is to locate and secure additional licenses in prospective hydrocarbon provinces and through targeted investment programmes, monetise the value in those assets for the benefit of shareholders. Circle may use its own expertise to appraise reserves and bring assets into production, generating sustained cash flow for further investment. In addition it may seek farm-outs to selected partners who would then invest in the exploration and continue through to the development of the assets for production.

 

Further information on Circle is available on its website at www.circleoil.net.