Circle Oil Plc Regulatory News (COP)

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, JAPAN, CANADA, SOUTH AFRICA OR AUSTRALIA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A BREACH OF THE RELEVANT SECURITIES LAWS OF SUCH JURISDICTION.

3 August 2010

Circle Oil Plc 

('Circle' or 'the Company')

Placing of 141,666,667 new Ordinary Shares at 30 pence each to raise

$65.0 million

Highlights

·; Placing of 141,666,667 Ordinary Shares at a price of 30 pence per Placing Share to raise gross proceeds of approximately £42.5 million ($65.0 million)

·; Net proceeds of the Placing, totaling approximately £40.6 million ($61.5 million) to be used to accelerate Company growth by;

§ accelerating the Company's exploration activities;

§ funding capital expenditure in Morocco and Egypt; and

§ providing funding for new ventures in the Company's core locations.

·; Company's target is to achieve net production of over 10,000 boepd over the next three years

·; Placing Price represents a discount of 6.25 per cent. to the closing middle market price of 32 pence per Ordinary Share on 2 August 2010

·; Placing Shares will represent approximately 25.4 per cent. of the Company's enlarged issued ordinary share capital immediately following Admission

·; Evolution Securities Limited acted as sole bookrunner and financial adviser and Fox Davies Capital Limited acted as co-lead manager to the Company

Chris Green, Chief Executive Officer, said, "I am delighted with the success of the Placing and the support of both existing and new investors. With these fresh funds, Circle can accelerate its activities and is well positioned to take advantage of new opportunities emerging in our regions of operation. I believe this marks the beginning of a new period of growth for Circle Oil."

A copy of the Company's corporate presentation will be made available on the Company's website, www.circleoil.net.

For further information contact: 

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. Circle Oil Plc

Placing of 141,666,667 new Ordinary Shares at 30 pence each to raise $65 million

Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to announce that it has placed 141,666,667 new ordinary shares ('Ordinary Shares') of EUR0.01 each ('the Placing Shares') at 30 pence per share ('the Placing Price') to raise gross proceeds of approximately £42.5 million ($65 million) ('the Placing'). Evolution Securities Limited ('Evolution') acted as sole bookrunner and financial adviser and Fox Davies Capital Limited ('Fox Davies') acted as co-lead manager to the Company.

Use of Proceeds

The gross proceeds of the Placing are intended to be used as follows:

Morocco - $16 million:

·; Complete the Company's 3D seismic programme and accelerate drilling;

·; Fund the planned expansion of existing infrastructure; and

·; Acquire additional production equipment.

Tunisia - $11 million:

·; Accelerate and increase work programme on existing permits;

·; Increase Circle's working interest in the Grombalia permit; and

·; Fund additional seismic surveys in Tunisia to gain further information on remaining leads.

Egypt - $6 million:

·; Installation of permanent production facilities;

·; Commissioning of new gas production facilities; and

·; Injector well drilling.

Oman - $26 million:

·; Accelerate the Company's drilling programme at Block 49.

New ventures - $6 million:

·; Circle will seek to acquire development opportunities in the Middle East and North Africa.

Admission and Dealings

The Placing Price represents a discount of 6.25 per cent. to the closing middle market price of 32 pence per Ordinary Share on 2 August 2010. The Placing Shares will represent approximately 25.4 per cent. of the Company's enlarged issued share capital immediately following admission to trading on AIM ('Admission'). The Placing Shares will rank pari passu in all respects with the existing Ordinary Shares in the Company. The Placing is conditional, inter alia, on the admission of the Placing Shares to trading on AIM. Application has been made for the Placing Shares to be admitted to trading on AIM and it is expected that trading will commence at 8.00 a.m. on 4 August 2010. It is expected that CREST accounts will be credited on the day of Admission and that share certificates (where applicable) will be dispatched by first class post by or on 18 August 2010.

Following Admission, the total issued share capital of the Company will be 557,503,486 Ordinary Shares, all of which have voting rights.

- End -

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. Where Circle does not operate an asset, Professor Green has relied on primary information supplied by the operator in carrying out his review.

DISCLAIMER

Evolution, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as nominated adviser to the Company for the purpose of the AIM Rules and Fox Davies is acting a joint broker to the company in conjunction with Evolution. Both Evolution and Fox Davies (together, the 'Managers') are authorised and regulated in the United Kingdom by the Financial Services Authority. The Managers are acting exclusively for the Company in relation to the Placing. Neither Evolution nor Fox Davies are acting for any other person in connection with the matters referred to in this announcement and they will not be responsible to anyone other than the Company for providing the protections afforded to clients of Evolution and/or Fox Davies or for giving advice in relation to the matters referred to in this announcement.

No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Evolution and Fox Davies or by any of their affiliates or agents as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

This announcement has been issued by the Company and is the sole responsibility of the Company.

This announcement does not constitute a prospectus relating to the Company and has not been approved by the UK Listing Authority, nor does it constitute or form any part of any offer or invitation to purchase, sell or subscribe for, or any solicitation of any such offer to purchase, sell or subscribe for, any securities in the Company under any circumstances, and in any jurisdiction, in which such offer or solicitation is unlawful. Accordingly, copies of this announcement are not being and must not be mailed or otherwise distributed, released, published or sent in or into or from the United States, Canada, Australia, South Africa or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction or to, or for the account or benefit of, any United States, Canadian, Australian, South African or Japanese person and any person receiving this announcement, (including, without limitation, custodians, nominees and trustees) must not release, publish, distribute or send it, in whole or in part, in or into or from the United States, Canada, Australia, South Africa or Japan.

The Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended ("Securities Act") and may not be offered, sold or transferred, directly or indirectly, within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. The Placing Shares are being offered and sold outside the United States in accordance with Regulation S under the Securities Act. No public offering of the shares referred to in this announcement is being made in the United States, United Kingdom or elsewhere.

This announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events. These statements, which sometimes use words such as "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this announcement is subject to change without notice and, except as required by applicable law, the Company does not assume any responsibility or obligation to update publicly or review any of forward-looking statements contained herein. You should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement. No statement in this announcement is or is intended to be a profit forecast or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company.