Circle Oil Plc Regulatory News (COP)

11 Jun 2007 07:00

Circle Oil PLC11 June 2007 11 June 2007 CIRCLE OIL PLC ("Circle" or the "Company") Kuwait's KGL Petroleum invests US$30 million in Circle Oil Circle Oil plc is pleased to announce the signing of an unsecured ConvertibleLoan agreement in the sum of US$30 million with Kuwait-based, KGL PetroleumCompany. The loan also has an attached option whereby the loan provider cansubscribe for an additional 15 million shares in Circle Oil at a price of £0.50per share exercisable during the first 3 years of the loan. The signing of this agreement forms part of Circle's three year funding strategyto cover its work programme including the development costs of commercialdiscoveries. The Company is committed to drilling a minimum of 9 wells on itsMoroccan and Tunisian Licences up to the middle of 2009 together with allancillary seismic and technical studies. The Convertible Loan is for a period of 5 years, is convertible into ordinaryshares of the Company at an exercise price of £0.25 per share and carries a 6%coupon. The contract was signed on 08 June 2007 by Circle Oil plc and a whollyowned Luxembourg registered subsidiary of KGL Petroleum. Circle is currently finalizing the participation of a number of additionalinstitutional investors and banks in this financing, further announcements onwhich will be made in due course. David Hough, CEO Circle Oil, commenting on this signing said: "I am delighted that KGL Petroleum has joined with us in pursuit of ouraggressive exploration and development programme planned for the coming period.We are also jointly examining working together on a number of other projectswhich will combine the experience, capabilities and network of both Circle andthe KGL Group." Mohammed Sultan, Managing Director of KGL Petroleum, said: "After examining a number of possible partners in this sector we are delightedto have concluded this agreement with Circle Oil. We look forward to the futureas Circle Oil develops into a successful exploration and production companycomplementing our other activities in KGL Petroleum." Enquiries Circle Oil plcDavid Hough, CEO (+44 20 7638 9571) Citigate Dewe Rogerson (+44 20 7638 9571)Media enquiries: Martin Jackson/George CazenoveAnalyst enquiries: Nina Soon KGL Petroleum CompanyMohammad Sultan, Managing Director (+965 2245168) Notes to Editors Circle Oil Circle Oil plc (AIM: COP) is an international oil & gas exploration anddevelopment company with a growing portfolio of assets in Morocco, Tunisia,Namibia, Oman and Panama. The company listed on AIM in October 2004. Circle has the largest licence holding of any company in Oman. In addition toBlock 52, the company also has an ongoing exploration program in onshore Block49. Worldwide, the company is active in exploration in the Owambo Basin,Namibia; in the Caribbean Sea, offshore Panama; the Rharb Basin, Morocco; theRas Mamour Permit in southern Tunisia and Grombalia Permit in northern Tunisia. The Company's strategy is to locate and secure licences in new hydrocarbonprovinces and through targeted investment programmes, monetise the value inthose assets for the benefit of shareholders. This could be achieved throughfarm-outs to selected partners who would then invest in and continue thedevelopment of the asset into production, or Circle may itself opt to use itsown expertise to appraise reserves and bring assets into production, generatinglong term cash flow for further investment. www.circleoil.com KGL Petroleum KGL Petroleum operates within the energy sector with a primary focus on oil andgas operations and petroleum related products. The core of KGL Petroleum'sstrategy is to get direct access to oil & gas resources through investments inthe upstream, midstream and downstream sectors which will create the foundationfor other complementary businesses within KGL. KGL Petroleum is one of thefastest growing company's in the Middle East region and is aiming to be a leaderin the energy sector both locally and globally, and to be benchmarked with thebest worldwide oil and gas companies. www.kglpet.com This information is provided by RNS The company news service from the London Stock Exchange