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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Circle Oil | LSE:COP | London | Ordinary Share | IE00B034YN94 | ORD EUR0.01 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.625 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMCOP
RNS Number : 6739Q
Circle Oil PLC
03 September 2014
Circle Oil Plc
INTERIM REPORT 2014
3 September 2014
CIRCLE OIL PLC
("Circle or the "Company" or "Group")
2014 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 2014.
Financial Highlights
-- Group revenue of US$47.8 million up by 13% (H1 2013: US$42.3 million) -- EBITDA of US$22.6 million down by 10% (H1 2013: US$25.2 million)
-- Profit for the period of US$9.4 million down by 36% (H1 2013: US$14.7 million) due to additional expenditure relating to increased operational activity, the implementation of the senior debt facility and reduction in cost recovery in the North West Gemsa permit
-- Available cash at 30 June 2014 of US$29.9 million up by 27% (H1 2013: US$23.5 million)
-- Senior Debt Facility of up to US$100 million agreed with IFC in March 2014 - first drawdown in April
-- Oil price achieved - Egypt - US$104.32/bo: Gas price achieved - Morocco - US$10.31/MMscf
Operational Highlights
-- Exploration well EMD-1 drilled in the Mahdia Block offshore Tunisia, encountering total hydrocarbon column of 133 metres in the Birsa and Ketatna carbonates
-- Third drilling campaign underway in Sebou and Lalla Mimouna permits in Morocco with a successful first well in SAH-W1
-- Production from the gas trunk pipeline in Morocco raised to 7 MMscf/d -- New producers and one new injector successfully drilled in Egypt -- 2D seismic survey completed in Block 52 offshore Oman
Professor Chris Green, CEO, commented:
"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. Oil production in Egypt continues on a solid footing and Moroccan gas production now contributes increasingly to our revenues. The ongoing drilling programme in Morocco and post period announcement of the EMD-1 potential discovery in the Mahdia Block gives further near and mid-term opportunity to grow the Company for the benefit of all stakeholders. An exciting period is ahead with the second half of the year including new drilling in both Morocco and onshore Oman."
CIRCLE OIL PLC
INTERIM REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 2013 - UNAUDITED
Table of Contents Page
Chairman's Statement 3
Glossary 7
Condensed Consolidated Income statement 8
Condensed Consolidated Statement of Financial Position 9
Condensed Consolidated Cashflow Statement 10
Condensed Consolidated Statement of Changes in Equity 11
Notes to the Financial Statements 12
CHAIRMAN'S STATEMENT
Circle has seen further significant progress in the first half of 2014 and this has continued into the second half. The industrial off-take of our gas in Morocco, though our pipeline, was maintained and successful drilling in Egypt added new producers and one new water injector. Circle's share of oil and gas production continues to provide a firm foundation for the future. The recent potential discovery in EMD-1 offshore Tunisia opens and extends the prospectivity over the whole Mahdia permit and is a potentially game-changing event in Circle's development. With the drilling campaign in Morocco continuing with its second well and further operations planned in Oman, the Company has a very active and hopefully fruitful second half of the year ahead.
OPERATIONS
Morocco
Several potential drilling locations in both the Sebou and Lalla Mimouna permits have been delineated using the available 3D seismic coverage. Drilling activity commenced in the Sebou permit with the SAH-W1 well in May. The rig had to be released to another operator without testing the well, but wireline logging confirmed the presence of three gas bearing zones and these will be tested for production during the continuation of the drilling campaign later this year. The programme includes six wells in Sebou, the second of which (CGD-12) was spud on 25 August 2014, with a further six wells to follow in Lalla Mimouna over the coming 12 months.
The daily gas production rate from Sebou has averaged between 6.8 and 7 MMscf/d in the first half of 2014 and negotiations are well under way for further off-take to increase the supplies and revenue by year end. The cumulative production from Circle's wells in the Sebou Permit through to the end of June 2014 was 190.7 MMm(3) (6.3 bcf).
The 2014 CPR reserves estimates were completed in mid-2014 and in the Sebou and Oulad N'Zala concessions, the 2P value of Gross Initial Gas Reserves was 30.2 bcf, with 22.33 bcf net to Circle, very similar to the 2013 estimate. Following production of 6.3 bcf through to the end of June 2014, the 2P Gross Remaining Reserves are estimated to be 23.9 bcf. The current drilling campaign is aimed to enlarge Circle's reserve base and further our production growth.
Egypt
The partners continue to successfully manage output at the Egyptian licence. At the end of June 2014 ten wells in the Al Amir SE field (AASE) and two wells in the Geyad field were on production, with a combined gross production rate of 11,592 boepd. Water injection through four wells in AASE and one well in the Geyad field is providing continuing pressure support to maximise recovery efficiency and maintain production levels.
Both the appraisal well AASE-19, spudded on 1 December 2013 and infill production well AASE-21, spudded on 9 March 2014, were successfully drilled and put into production in the first half of the year.
Water injection well AASE-22 was also drilled in H1 and has been completed for future water injection in the Rahmi.
A work-over programme on several AASE and Geyad field wells has been initiated to follow on from the drilling programme. This has been done to recomplete certain wells and remedy some mechanical problems to maintain a high level of production and injection in both fields.
This process of good field management will be continued into 2015 through the development and implementation of the first dynamic reservoir model over both fields.
Cumulative water injection to the end of June 2014 was 20.9 MMbw. The export gas line to the SUCO facility at Zeit Bay is currently flowing at approximately 10 MMscf/d with a total delivered to the terminal of 12.9 bcf at the end of June 2014. Valuable condensate and natural gas liquids are stripped out of the gas and sold to EGPC with average daily rates of about 100 bbls of condensate and 20 tonnes of LPG.
The 2014 CPR reserves estimates were completed in mid-2014 and in the NW Gemsa concession, the 2P value of Gross Initial Oil Reserves was 38.3 MMbo and the 2P Gross Initial Raw Gas Reserves were estimated to be 43.14 bcf. This totals a 2P Gross Initial Reserves value of 45.73 MMboe (18.29 MMboe net to Circle). The minor change in Initial Oil Reserves from the 2013 CPR is due to additional infill well data and to the re-mapping of the re-processed 3D seismic. Following production of 15.58 MMbo through to the end of June 2014, the 2P Gross Remaining Reserves are estimated to be 22.72 MMbo.
Tunisia
Circle drilled the El Mediouni-1 well (EMD-1) in the north-central area of the Mahdia Permit in a water depth of 240 metres, 120 kilometres east of the port of Sousse. EMD-1 drilled to a TD of 1,200 metres MD in the Upper Ketatna carbonates. The stratigraphy encountered in the well was exactly as prognosed and very good light oil shows were encountered both in the Lower Birsa carbonate primary target and the Upper Ketatna carbonates secondary target over a combined interval of 133 metres.
The strong hydrocarbon indications encountered in the Birsa and Ketatna carbonates confirm the existence of a working petroleum system in the Mahdia Permit for this and other prospects. The robustness of the El Mediouni trap has also been proven. The losses incurred within the target formations, as described below, give further confirmation of high quality permeability. The gross oil zone interval in the Lower Birsa is 77 metres and the Upper Ketatna has a minimum interval of 48 metres, subject to confirmation by logs. Using known reservoir and fluid parameters from equivalent formations in the Gulf of Hammamet, the internally estimated most likely recoverable prospective resources discovered by the EMD-1 well are approximately 100 MMbo.
During the drilling of the target carbonates, severe mud losses occurred and multiple remedial operations to restore circulation were performed. The hole conditions in the well deteriorated rapidly and multiple attempts at open hole logging by wireline and tough logging conditions equipment failed and ultimately the decision was taken to terminate further efforts and suspend the well.
Circle has been granted a six month extension to the Mahdia permit to January 2015. It then has the right to elect for two additional renewals of the permit for 3 years each with a commitment of one well per period.
The award of the 2,792 sq km Takelsa permit (formerly Grombalia) on the Cap Bon peninsula through competitive bidding) was ratified by the Tunisian authorities in very late 2013, and Circle will be 100% working interest holder and operator. This is regarded as a key award towards creating increased Company value. The licence area includes existing oil and gas field concessions and other discoveries within or close to the block. Planning for the first exploration phase of three years of work commitments is in progress, starting with the acquisition of both 3D and 2D seismic, followed by the drilling of four low cost onshore exploration wells.
Oman
Interpretation of the 2012 seismic programme was integrated with the 3D interpretation and an exploration well location selected in the southern part of onshore Block 49. Tendering to drill this well is completed with the principal target depth at about 1,900 metres MD and an intended spud date in late H2 2014.
An infill 2D seismic survey of 850 line kilometres was completed in May 2014 on offshore Block 52, to firm the nearshore Sawqirah Bay leads into drillable prospects. This survey is now being processed and will shortly be interpreted. There has been renewed interest in Circle's acreage following a successful discovery in the adjacent block to the north of our acreage. This augurs well for securing a farm-in partner to drill an exploration well in 2015.
As previously indicated, the Company had bid for an onshore Block in the 2013 bid round and continues to progress its bid with the relevant authorities.
FINANCIAL REVIEW
Circle has delivered strong revenue, gross profit and cash flow for the first half of 2014. Oil and gas sales revenue has increased by 13% to US$47.8 million (H1 2013: US$42.3 million) due principally to an 11% increase in volume of oil sold in Egypt with a similar increase in sales of gas in Morocco. Sales of gas and associated liquids in Egypt, which commenced in February 2013 contributed US$1.5 million in gross revenue terms in the first half of 2014 (H1 2013: US$0.6 million) representing an increase of 131%.
Gross profit for the period under review amounted to US$16.4 million (H1 2013: US$18.6 million) while operating profit was US$12.3 million (H1 2013: US$16.7 million).
The reduction in gross profit was due principally to a decrease in cost oil recovery of US$3.1 million and an increase in amortisation of US$1.9 million as a result of additional capital expenditure. The reduction in operating profit was due mainly to increased administration costs of US$1.0 million as a result of increased activity in operations from the drilling of the Mahdia well. In addition, share option expense (non-cash) of US$0.9 million was incurred during the period and related to share options granted under the new LTIP scheme which was approved by shareholders on the 17 December 2013. An unrealised foreign exchange loss of US$0.3 million was also incurred due to the strengthening of the US Dollar against the Moroccan Dirham during H1 2014.
Net financing costs increased by US$0.9 million due mainly to expenditure associated with putting in place the senior debt facility of up to US$100 million, and these included US$1.1 million of non-cash accounting charges.
EBITDA for the six month period was US$22.6 million (H1 2013: US$25.2 million) while the Group recorded a profit of US$9.4 million (H1 2013: US$14.7 million).
EGPC receipts continued at a regular level and our Egyptian receivables have remained at a similar level to 31 December 2013.
On 14 March 2014, Circle signed a reserve based lending facility agreement for up to US$100 million with IFC (a member of the World Bank Group). The facility matures in June 2018 and is secured against the Company's producing assets in Egypt and Morocco. IFC, hold US$50 million of the facility and are syndicating the remainder to a group of international and regional banks of which US$20 million has already been placed. During the period under review Circle drew down US$25 million from the facility. This was used to repay the working capital facility of US$12.5 million agreed with Ahli United Bank Egypt in December 2012 and also to release capital for investment in new exploration and development of the Company.
Net cash generated from operations before working capital movements amounted to US$23.5 million for the period (H1 2013: US$25.2 million). Following working capital movements, net cash generated in H1 2014 amounted to US$25.1 million (H1 2013: US$23.7 million). Available cash at 30 June 2014 was up by 27% at US$29.9 million (H1 2013: US$23.5 million) while the Group had net financial gearing of 9% (H1 2013: 3%).
OUTLOOK
Circle has finished the first half of 2014 with increased revenue from its production in Egypt and Morocco. The Company is now drilling its second well, of twelve, in Morocco with this campaign having the potential to augment both our reserves and revenues in the country.
Recently completed operations offshore Tunisia and forthcoming operations in both Oman and onshore Tunisia have the potential to further enhance our asset base. Circle will endeavour to grow the business, in the MENA region, both through the drill bit and with carefully selected, value-driven operations and acquisitions.
Stephen Jenkins
Chairman
2 September 2014
Glossary
Hot Features
Premium
bbls Barrels
bo Barrels of oil
bopd Barrels of oil per day
boepd Barrels of oil equivalent per day
bcf Billions of standard cubic feet of gas
bwpd Barrels of water per day
CPR Competent Person Report
EBITDA Earnings before interest, tax, depreciation
and amortisation
EGPC Egyptian General Petroleum Company
LPG Liquified Petroleum Gas
MD Measured depth
MENA Middle-East North Africa
MMbo Millions of barrels of oil
MMboe Millions of barrels of oil equivalent
MMbw Millions of barrels of water
MMscf/d Millions of cubic feet of gas per day
sq km Square kilometres
TD Total depth
2D Two dimensional
3D Three dimensional
2P Probability of success 50%
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, and Dr Stuart Harker, VP Geology, also with over 30 years experience, are the qualified persons as defined in the London Stock Exchange's Guidance Note for Mining and Oil and Gas companies, who have reviewed and approved the technical information contained in this announcement. In relation to Egypt Professor Green and Dr Harker have relied on primary information supplied by the operator in carrying out their review.
circle Oil PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2014 - UNAUDITED
Notes 6 months 6 months Year ended
to to 31 December
30 June 30 June 2013
2014 2013
US$000 US$000 US$000
Revenue 3 47,785 42,334 93,343
Cost of sales (31,370) (23,762) (56,394)
Gross profit 16,415 18,572 36,949
Administrative expenses (2,956) (1,943) (4,719)
Share option expense (863) - -
Foreign exchange (loss)/gain (339) 53 118
Operating profit 12,257 16,682 32,348
Finance revenue 6 129 228 720
Finance costs 7 (3,004) (2,227) (4,211)
Profit before taxation 9,382 14,683 28,857
Taxation - - (34)
Profit for the financial period 9,382 14,683 28,823
Basic earnings per share 2 1.67c 2.61c 5.12c
===================== ==================== ===========================
Diluted earnings per share 2 1.62c 2.37c 4.66c
===================== ==================== ===========================
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2014 - UNAUDITED
6 months 6 months Year ended
to to 31 December
30 June 30 June 2013
2014 2013
US$000 US$000 US$000
Profit for the financial period 9,382 14,683 28,823
Total income and expense recognised
in other comprehensive income - - -
Total comprehensive income
for the period - entirely
attributable to equity holders 9,382 14,683 28,823
===================== ================== =============
Circle Oil PLC
CONDENSED CONSOLIDATED statement of financial position
AT 30 JUNE 2014 - UNAUDITED
Notes 30 June 30 June 31 December
2014 2013 2013
US$000 US$000 US$000
Assets
Non-current assets
Exploration and evaluation
assets 4 111,997 72,456 81,353
Production and development
assets 5 151,800 144,893 146,188
Property, plant and equipment 276 113 133
Deferred transaction costs 1,666 151 -
--------- ------------------- ------------
265,739 217,613 227,674
--------- ------------------- ------------
Current assets
Inventories 115 14 23
Trade and other receivables 48,117 43,574 42,260
Cash and cash equivalents 8 31,654 30,632 37,938
--------- ------------------- ------------
79,886 74,220 80,221
--------- ------------------- ------------
Total assets 345,625 291,833 307,895
========= =================== ============
Equity and liabilities
Capital and reserves
Share capital 8,084 8,084 8,084
Share premium 167,083 167,083 167,083
Other reserves 11,928 12,917 11,260
Retained earnings 67,949 42,574 58,371
Total equity 255,044 230,658 244,798
--------- ------------------- ------------
Non-current liabilities
Trade and other payables 1,575 2,602 2,064
Convertible loan - debt
portion 27,885 25,623 26,763
Derivative financial instruments 134 215 134
Decommissioning provision 1,176 319 1,159
Total non-current liabilities 30,770 28,759 30,120
--------- ------------------- ------------
Current liabilities
Trade and other payables 34,774 20,818 20,442
Bank borrowings 9 25,000 11,573 12,499
Current tax 37 25 36
Total current liabilities 59,811 32,416 32,977
--------- ------------------- ------------
Total liabilities 90,581 61,175 63,097
--------- ------------------- ------------
Total equity and liabilities 345,625 291,833 307,895
========= =================== ============
Circle Oil PLC
CONDENSED CONSOLIDATED cash flow statement
FOR THE SIX MONTHS ENDED 30 JUNE 2014 - UNAUDITED
Notes 6 months 6 months Year ended
to to 31 December
30 June 30 June 2013
2014 2013
US$000 US$000 US$000
Operating activities
Net cash generated from operations 10 25,141 23,695 53,365
Taxes paid - - (27)
Net cash inflow from operating activities 25,141 23,695 53,338
------------------- ---------------- ----------------
Cash flows from investing activities
Payments to acquire exploration and
evaluation assets (26,526) (9,426) (17,780)
Payments to acquire production and
development assets (15,955) (14,598) (28,152)
Payments to acquire property, plant
and equipment (184) (44) (99)
Interest received 5 10 18
Net cash used in investing activities (42,660) (24,058) (46,013)
------------------- ---------------- ----------------
Cash flows from financing activities
Reserve based lending facility - amounts 25,000 - -
drawn down
Working capital facility - amounts
drawn down - 11,573 23,161
Working capital facility - amounts
repaid (12,499) - (10,662)
Interest paid (1,222) (1,040) (2,203)
Net cash from financing activities 11,279 10,533 10,296
------------------- ---------------- ----------------
(Decrease)/increase in cash and cash
equivalents (6,240) 10,170 17,621
------------------- ---------------- ----------------
Cash and cash equivalents at beginning
of period 37,938 20,391 20,391
Effect of foreign exchange rate changes (44) 71 (74)
Cash and cash equivalents at end of
period 31,654 30,632 37,938
=================== ================ ================
Circle Oil PLC
consolidated STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2014 - UNAUDITED
Retained
Share capital Share premium Other Translation earnings/
US$000 US$000 reserves reserve (deficit)
US$000 US$000 US$000
At 1 January 2013 8,084 167,083 12,920 (3) 27,891
Issue of share capital - - - - -
Share based payment - - - - -
Reserve transfer - - - - -
Net profit for period - - - - 14,683
At 30 June 2013 8,084 167,083 12,920 (3) 42,574
---------------- ---------------- --------------- -------------- -----------
Issue of share capital - - - - -
Share-based payment - - - - -
Reserve transfer - - (1,657) - 1,657
Net profit for period - - - - 14,140
At 31 December 2013 8,084 167,083 11,263 (3) 58,371
---------------- ---------------- --------------- -------------- -----------
Issue of share capital - - - - -
Share based payment - - 863 - -
Reserve transfer - - (196) - 196
Net profit for period - - - - 9,382
At 30 June 2014 8,084 167,083 11,930 (3) 67,949
================ ================ =============== ============== ===========
Circle Oil PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2014
1. Basis of preparation
The condensed consolidated 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 and those envisaged for the year ended 31 December 2014 financial statements, with the exception of the following:
Adoption of new and revised Standards
The following new and revised Standards have been mandatorily adopted by the Group during the period. Their adoption has not had a material impact on the financial statements of the Group.
IFRS 10 Consolidated Financial Statements (effective for accounting periods beginning on or after 1 January 2014)
IFRS 11 Joint Arrangements (effective for accounting periods beginning on or after 1 January 2014)
IFRS 12 Disclosure of Interest in Other Entities (effective for accounting periods beginning on or after 1 January 2014)
IFRS 10, 12 & IAS 27 Investment Entities (effective for accounting periods beginning on or after 1 January 2014)
IAS 27 Consolidated and Separate Financial Statements (effective for accounting periods beginning on or after 1 January 2014)
IAS 27 Separate Financial Statements (effective for accounting periods beginning on or after 1 January 2014)
IAS 28 Investments in Associates and Joint Ventures (effective for accounting periods beginning on or after 1 January 2014)
IAS 32 Financial Instruments: Presentation (effective for accounting periods beginning on or after 1 January 2014)
IAS 36 (amendments May 2013) Recoverable Amount Disclosures for Non-Financial Assets (effective for accounting periods beginning on or after 1 January 2014)
IAS 39 (amendments June 2013) Novation of Derivatives and Continuation of Hedge Accounting (effective for accounting periods beginning on or after 1 January 2014)
2. Basic and diluted earnings per share
The calculation of basic earnings per share attributable to the ordinary equity holders is based on the following data:
30 June 30 June 31 December
2014 2013 2013
US$000 US$000 US$000
Profit for period attributable
to equity holders of the parent 9,382 14,683 28,823
===================== ===================== ======================
'000 '000 '000
Weighted average number of
ordinary shares for the purposes
of basic earnings per share 563,353 563,353 563,353
===================== ===================== ======================
Diluted earnings per share is calculated using the weighted average number of ordinary shares assuming the conversion of its potential dilutive ordinary shares outstanding which relate to the convertible loan and employee share options. All of the Group's potential ordinary shares were dilutive for the period ended 30 June 2014 which resulted in a decrease in earnings per share. The Group had total potential ordinary shares outstanding of 124,887,935 at 30 June 2014 (2013: 131,337,728).
Circle Oil PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2014
3. Segmental reporting
Six months to 30 June Africa Middle-East Corporate Total
2014
US$000 US$000 US$000 US$000
Revenue 47,785 - - 47,785
Cost of sales (21,034) - - (21,034)
Depreciation (10,336) - - (10,336)
Gross profit 16,415 - - 16,415
Administration expenses (1,696) (168) (1,092) (2,956)
14,719 (168) (1,092) 13,459
Share option expense (135) (67) (661) (863)
Finance costs (1,217) - (1,787) (3,004)
Finance revenue 125 - 4 129
Foreign exchange loss (302) - (37) (339)
------------- --------------- ------------------ ---------------
Profit/(loss) before taxation 13,190 (235) (3,573) 9,382
Taxation - - - -
Profit/(loss) for the
period 13,190 (235) (3,573) 9,382
============= =============== ================== ===============
Total assets 290,682 40,140 14,803 345,625
============= =============== ================== ===============
Total liabilities (57,766) (1,085) (31,730) (90,581)
============= =============== ================== ===============
Sales revenue in Africa of US$47.79 million (H1 2013: US$42.33million) consists of US$36.97 million in oil sales and US$1.45 million in gas and associated liquid sales in Egypt together with US$9.37 million in gas sales in Morocco. Corporate comprises mainly of corporate expenses, cash and other assets and liabilities not directly attributable to an operating segment.
Circle Oil PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2014
3. Segmental reporting (continued)
Six months to 30 June Africa Middle-East Corporate Total
2013
US$000 US$000 US$000 US$000
Revenue 42,334 - - 42,334
Cost of sales (15,311) - - (15,311)
Depreciation (8,451) - - (8,451)
Gross profit 18,572 - - 18,572
Administration expenses (777) (215) (951) (1,943)
17,795 (215) (951) 16,629
Finance costs (361) - (1,866) (2,227)
Finance revenue 149 - 79 228
Foreign exchange gain 33 - 20 53
------------- --------------- ----------------- --------------
Profit/(loss) before taxation 17,616 (215) (2,718) 14,683
Taxation - - - -
Profit/(loss) for the
period 17,616 (215) (2,718) 14,683
============= =============== ================= ==============
Total assets 241,474 36,191 14,168 291,833
============= =============== ================= ==============
Total liabilities (34,518) (107) (26,550) (61,175)
============= =============== ================= ==============
Circle Oil PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2014
3. Segmental reporting (continued)
Twelve months to 31 December Africa Middle-East Corporate Total
2013
US$000 US$000 US$000 US$000
Revenue 93,343 - - 93,343
Cost of sales (37,543) - - (37,543)
Depreciation (18,851) - - (18,851)
Gross profit 36,949 - - 36,949
Administration expenses (2,581) (399) (1,739) (4,719)
34,368 (399) (1,739) 32,230
Finance costs (665) - (3,546) (4,211)
Finance revenue 567 - 153 720
Foreign exchange gain/(loss) 132 - (14) 118
Profit/(loss) before taxation 34,402 (399) (5,146) 28,857
Taxation - - (34) (34)
Profit/(loss) for the year 34,402 (399) (5,180) 28,823
============ ============== ============== =============
Total assets 258,850 35,720 13,325 307,895
============ ============== ============== =============
Total liabilities (34,802) (25) (28,270) (63,097)
============ ============== ============== =============
Circle Oil PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2014
4. 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
2014 Opening balance Closing balance
US$000 Additions US$000
US$000
Africa 45,668 26,366 72,034
Middle-East 35,685 4,278 39,963
30 June 2014 81,353 30,644 111,997
=================== =================== ==================
Six months to 30
June 2013 Opening balance Closing balance
US$000 Additions US$000
US$000
Africa 30,840 6,809 37,649
Middle-East 33,977 830 34,807
30 June 2013 64,817 7,639 72,456
================== ==================== ===================
Twelve months to 31
December 2013 Opening balance Closing balance
US$000 Additions US$000
US$000
Africa 30,840 14,828 45,668
Middle-East 33,977 1,708 35,685
31 December 2013 64,817 16,536 81,353
=================== =================== ===================
Oil and gas interests at 30 June 2014 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 2014. Exploration and evaluation assets have been assessed for impairment having regard to the likelihood of further expenditures and ongoing appraisal for each geographical area.
Circle Oil PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2014
5. Production and development assets
The movement on production and development assets which relate to oil and gas interests during the period was:
Cost Africa Total
US$000 US$000
At 1 January 2013 162,091 162,091
Additions 17,814 17,814
At 30 June 2013 179,905 179,905
================== ===============
Additions 11,700 11,700
At 31 December 2013 191,605 191,605
================== ===============
Additions 16,018 16,018
At 30 June 2014 207,623 207,623
================== ===============
Accumulated depreciation Africa Total
US$000 US$000
At 1 January 2013 26,561 26,561
Charge for financial period 8,451 8,451
At 30 June 2013 35,012 35,012
=================== ================
Charge for financial period 10,405 10,405
At 31 December 2013 45,417 45,417
=================== ================
Charge for financial period 10,406 10,406
At 30 June 2014 55,823 55,823
=================== ================
Net book value Africa Total
US$000 US$000
At 30 June 2013 144,893 144,893
================== ===============
At 31 December 2013 146,188 146,188
================== ===============
At 30 June 2014 151,800 151,800
================== ===============
Circle Oil PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2014
6. Finance revenue
6 months 6 months Year ended
to to 31 December
30 June 30 June 2013
2014 2013
US$000 US$000 US$000
Interest receivable 5 9 18
Gain on fair value of additional option
to subscribe for shares - 70 150
Finance income - deferred revenue interest 124 149 504
Revisions to discount on decommissioning
provision - - 48
129 228 720
============ ================ =============
7. Finance costs
6 months 6 months Year ended
to to 31 December
30 June 30 June 2013
2014 2013
US$000 US$000 US$000
Interest payable:
Convertible loan 2,015 2,015 4,062
Working capital facility interest 187 201 403
Reserve based lending facility interest 243 - -
Amortisation of working capital facility
transaction costs 330 131 262
Amortisation of reserve based lending 439 - -
transaction costs
Capitalised to exploration and evaluation
assets (227) (148) (516)
Unwinding of discount on decommissioning
provision 17 28 -
3,004 2,227 4,211
================ ======== =====================
8. Cash and cash equivalents
Cash balances at 30 June 2014 of US$31.65 million (H1 2013: US$30.63 million) include restricted cash amounts of US$1.8 million (H1 2013: US$7.15 million).
9. Bank borrowings
On 14 March 2014, Circle agreed a reserve based lending facility of up to US$100 million with IFC, a member of World Bank Group. The facility matures in June 2018 and is secured against the Company's producing assets in Egypt and Morocco. During the period under review Circle drew down US$25 million from the facility. This was used to repay the working capital facility of US$12.5 million agreed with Ahli United Bank Egypt in December 2012 and the balance to release capital for investment in exploration and development of the Company.
Circle Oil PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2014
10. Reconciliation to net cash generated from operations
6 months 6 months Year ended
to to 31 December
30 June 30 June 2013
2014 2013
US$000 US$000 US$000
Profit before taxation 9,382 14,683 28,857
Finance revenue (129) (228) (720)
Finance costs 3,004 2,227 4,211
Increase in trade and other payables 6,715 1,970 3,834
Increase in trade and other receivables (5,024) (3,380) (1,819)
(Increase)/decrease in inventory (92) 4 (2)
Share option expense 863 - -
Foreign exchange loss/(gain) 44 (71) 74
Depreciation 10,378 8,490 18,930
Net cash generated from operations 25,141 23,695 53,365
=================== ============== ====================
11. 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
Investec (+44 20 7597 5970)
Chris Sim
George Price
James Rudd
Liberum Capital Limited (+44 20 3100 2222)
Clayton Bush
Tim Graham
Citigate Dewe Rogerson (+44 20 7638 9571)
Martin Jackson
Shabnam Bashir
Murray Consultants (+353 1 498 0320)
Joe Murray
Joe Heron
Notes to Editors
Circle Oil Plc (AIM: COP) is an international oil & gas exploration, development and production Company holding a portfolio of assets in Morocco, Tunisia, Oman, and Egypt with a combination of low-risk, near-term production, and significant upside exploration potential. The Company listed on AIM in October 2004.
Internationally, the Company has continued to expand its portfolio over the past years and now has assets in the Rharb Basin, Morocco; the Ras Marmour Permit in southern Tunisia; the Mahdia Permit offshore Tunisia, and the Zeit Bay area of Egypt. Circle also has the largest licenced acreage of any company in Oman. In addition to its prospective Block 52 offshore, Circle has an ongoing exploration programme in Block 49 onshore.
Circle's strategy is to locate and secure additional licences 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 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 is available on its website at www.circleoil.net.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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