9 Sep 2008 07:00
09 September 2008
CIRCLE OIL PLC
("Circle" or the "Company")
CIRCLE OIL SIGNS FARM-OUT AGREEMENT ON ITS NAMIBIAN LICENCE
Circle Oil plc, the international oil and gas exploration and development company, is pleased to announce that it has signed a farm-out agreement on its Ovambo Basin licence in Northern Namibia with Petroholland Ltd, a Dubai holding company, with interests in both the upstream and downstream oil and gas industry. The licence covers an area of over 70,000 square kilometres immediately to the south of the Angola Namibia border.
Under the terms of the agreement Petroholland will acquire a 70% undivided interest in the licence with Circle retaining a 20% interest and NAMCOR, the Namibian State oil company holding a 10% share.
In consideration for the 70% interest in the licence, Petroholland has agreed to pay Circle US$15 million in cash and cover all of the costs attributable to Circle's 20% share of exploration and development expenditure through to production.
The Namibian Minister for Energy and Mines, The Honourable Erkki Nghimtina MP, has already approved the assignment of the 70% share in the licence to Petroholland and has agreed that Petroholland will become the operator of the licence. NAMCOR has elected not to exercise its pre-emption right under provisions of clause 12 of the current Joint Operating Agreement.
Petroholland has engaged the services of Halliburton consultants to provide the technical capability, personnel and resources to fulfil its obligations under the terms of the farm-out agreement and the Joint Operating Agreement.
David Hough, CEO of Circle, said:
For further information contact:
Circle Oil plc (+44 20 7638 9571)
David Hough, CEO
Collins Stewart Europe Limited (+44 20 7523 8350)
Adrian Hadden
James Cassley
Fox-Davies Capital (+44 207 936 5230)
Richard Hail
Citigate Dewe Rogerson (+44 20 7638 9571)
Media enquiries: Martin Jackson
Analyst enquiries: George Cazenove
Notes to Editors
Petroholland
Petroholland is a private oil and gas company originated in The Netherlands, with subsidiaries in South America and Africa, and holding companies in Dubai and Bahrain for the purpose of equity funding into the industry.
Activities are: exploration of oil and gas, refining, marine transport and the trade of oil and gas derivatives. This portfolio includes holding a major contract in Bolivia for exploration for Natural Gas. Petroholland also has major relationships with State companies in Africa and South America for exploration for oil and gas and outsources contracts to major multi national engineering consulting companies to execute its workorders. Petroholland's investment into the oil and gas industry for the period 2008 - 2010 is budgeted at around 2-3 billion US Dollars and its strategy is to use the most modern technology for securing success and the highest return to its investors.
Circle Oil Plc
Circle Oil Plc (AIM: COP) is an international oil & gas exploration and development Company with an expanding portfolio of assets in Morocco, Tunisia, Oman, Egypt and Namibia with a combination of low-risk near-term production and significant exploration upside 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 Mamour Permit in southern Tunisia; the Mahdia Permit offshore Tunisia; the Grombalia Permit in northern Tunisia; the Zeit Bay area of Egypt and the Owambo Basin, Namibia. Circle also has the largest licence holding of any Company in Oman. In addition to its highly prospective Block 52 offshore, 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. This could be achieved through farm-outs to selected partners who would then invest in and continue the development of the asset into production, or Circle may itself opt to use its own expertise to appraise reserves and bring assets into production, generating sustained cash flow for further investment.
Further information on Circle Oil is available on its website - www.circleoil.net