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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 Jul 2019 to Jul 2024
TIDMCOP
RNS Number : 8403N
Circle Oil PLC
08 September 2011
CIRCLE OIL PLC
("Circle" or the "Company")
2011 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 2011.
Highlights
-- Group turnover increased by 35% to US$28.7 million (H1 2010 : US$21.3 million)
-- Profit after tax US$8.7 million - up by US$6.6 million (316% increase) on H1 2010
-- Cash at bank of US$29.3 million (H1 2010: US$10.9 million)
-- Oil price achieved of US$104.81 BO - up 40% on H1 2010
-- Gas prices achieved of US$8.65 Mscf - up 27% on H1 2010
-- Three gas wells successfully tested in Morocco and new pipeline infrastructure under construction
-- One oil producing and two water injector wells successfully drilled in Egypt
-- Oman Block 52 interpretations successfully completed and farm-out exercise commenced
Professor Chris Green, CEO, commented:
"Circle has continued to make excellent progress in the first half of 2011, continuing the success of Circle across our exploration, development and production activities in the MENA region. We have recorded an increased net profit amounting to US$8.7 million for the half year 2011, significantly up on the corresponding period of last year.
Our daily production levels in Egypt are anticipated to increase when the associated gas goes into production, augmenting the existing oil production. In Morocco, the second drilling campaign has added four new gas discoveries. We are currently working hard to bring the additional gas wells in Morocco on-stream by adding the new, larger capacity, delivery pipeline; this should result in a healthy increase in revenues in 2012. We have already starting producing a limited further uplift in gas to meet increased demand in the last month, delivering an additional 1MMscfd approximately through the current pipeline infrastructure. In Oman, results from our recent Block 52 marine survey have identified a number of significant prospects. These will support our stated objective of farming out part of this licence to a suitable partner.
We have continued to consolidate our strong position in the MENA region; the successful consistency of our drilling results in Egypt and Morocco through this period further complements this position."
CHAIRMAN'S STATEMENT
The first half of 2011 has been another very busy and eventful period for Circle. The drilling programme has been continuing in Egypt and successful results have been achieved in every well drilled and tested. The 2010-2011 drilling campaign has been completed in Morocco with four tested gas discoveries and one gas well successfully tested from the 2009 drilling campaign. We have completed a 5,026 line km 2D marine seismic survey over Block 52 in Oman, revealing a new trend of drillable prospects and have now commenced a farm-out exercise.
Over the period the Company has maintained high production levels. We identified excellent prospects to drill and this has been confirmed by our successful drilling through both 2010 and in the first half of 2011. This was confirmed by a significant upgrade in recoverable reserves, independently assessed and reported in June of this year. Full credit is due to our technical team for maintaining this enviable success rate. Our production rate is set to increase substantially with the installation of a new gas pipeline in Morocco and gas production facilities in Egypt by the end of 2011. Circle's share of oil and gas production is currently ranging between 3,700 and 4,000 boepd which sets us well on course towards our attributable production target of 10,000 boepd in the medium term.
OPERATIONS
Morocco
Significant progress has been made in Morocco in the first half of the year, with success in both exploration and in building production capacity. Production has remained constrained by the limited capacity of the existing pipeline during the reporting period. The construction of a new and larger capacity gas pipeline to allow us to supply potential customers in Kenitra, north of Rabat, has been progressing well with a completion date within the 4(th) quarter of 2011. We have however been able to increase production levels recently by 1MMscfd approximately to a new customer by optimizing the existing infrastruture. Two wells KSR-8 and ONZ-6 have been providing production through the period and the increased production and all of the output from the Sebou permit utilizing the new pipeline will be sold locally.
Drilling activity of two new wells of the 2010-2011 drilling campaign and testing of another drilled during the 2009 campaign, resulted in the successful completion of three gas discoveries. The ADD-1 exploration well was drilled, logged and successfully tested in January 2011. The well is a gas discovery in both the Main Hoot target and the secondary Guebbas target. The well first tested gas at a sustained rate of 3.57 MMscf/d on a 24/64" choke from the Main Hoot. The perforated Main Hoot zone of 4.4 metres at 969.6-974 metres MD has a calculated net gas pay of 4 metres. The Guebbas zone was then perforated and flowed gas at a sustained rate of 1.89 MMscfd on a 16/64" choke. The perforated Guebbas zone of 2.1 meters at 889.4-891.5 metres MD has a calculated net gas pay of 1.5 metres.
Following this the DRJ-6 exploration well was successfully tested in February 2011. DRJ-6 was originally drilled in April 2009 and, as previously announced, had not been tested due to local logistical problems at the time of drilling. After this testing the Company confirmed a gas discovery in the Base Guebbas target. The well tested gas at a sustained rate of 5.363 MMscfd on a 26/64" choke. The perforated Base Guebbas zone of 1.5 metres at 1,042.25 - 1,043.75 metres MD and 3 metres at 1,046.0 - 1,049.0 metres MD has a calculated net gas pay of 4.5 metres.
The fifth and last well of the 2010-2011 drilling campaign designated KSR-11 was spudded on 11 March 2011 and was a gas discovery in the Main Intra Hoot target with secondary targets available for future testing in the Mid and Base Guebbas sands. The well tested gas at a sustained rate of 4.0 MMscfd on a 16/64" choke from the Intra Hoot. The perforated Intra Hoot zone of 17.9 metres at 1,761.2-1,779.1 metres MD has a calculated net gas pay of 11.6 metres. The Base Guebbas zone of 37.7metres at 1,636.0-1,673.7 metres MD has a calculated net gas pay of 5.5 metres. The Mid Guebbas zone of 22.8metres at 1,464.1-1,486.9 metres MD has a calculated net gas pay of 4.1metres. The Guebbas Zones will be tested at a later date following production and depletion of the Intra Hoot producing zone.
We have now started a new 3D seismic acquisition campaign in our Rharb area permits and this will assist in the definition of new and additional prospects to drill in our third and subsequent drilling campaigns.
Egypt
Six wells in the Al Amir SE field and two wells in the Geyad field are on production at a combined rate ranging between 7,500-8,500 bopd. The appraisal drilling continues and future successful wells will be connected to the existing infrastructure and brought into production as quickly as possible. The Geyad-3 well, located to the south-east of the Geyad-1X ST well, was drilled to 5,635 ft MD in the Upper Rudeis. The main objective for this well was to appraise and bring into production the oil bearing Shagar and Rahmi sandstones of the Kareem Formation. The Shagar sands were encountered from 5,333 to 5,347 ft MD with 14 ft of net oil pay. This interval was tested at a sustained rate of 1,316 bopd and 1.26 MMscfd of gas on a 24/64" choke and the well completed for production. The underlying Rahmi sands were encountered but found to be of poor reservoir quality and were not tested. The Geyad-3 well has proved up the south-east extension of the field and added further confirmation of the field geometry.
Two water injection wells have been drilled to provide pressure support and increase productivity for both the Al Amir SE and Geyad fields. The Al Amir SE-7X water injector well is located to the west of the Al Amir SE-4X and started drilling on 27 November 2010 and was drilled to a TD of 15,600 ft in the Lower Rudeis. The main objectives for this well were to provide water injection support into the Kareem sands and to delineate the Kareem oil-water contact, which is required for technical reasons including resource estimation. The Main Shagar Sands, encountered between 10,738 and 10,770 ft MD, were water bearing and of excellent reservoir quality. As a result Al Amir SE-7X should provide a good initial water injection well. The overlying sand stringers from 10,664 to 10,718 ft MD indicated oil saturations on logs. This well establishes the deepest oil in Al Amir SE for the Kareem at approximately 10,100 ft subsea, which positively corresponds with the latest estimates for the oil-water contact, calculated using formation pressure data. Additional work is to be undertaken to refine this elevation. The well has been completed as a water injector.
The Al Amir SE-8X, located to the south-west of the Al Amir SE-1X ST discovery well was drilled to a TD of 10,750 ft MD in the Upper Rudeis. The main objective for this well was to appraise the Shagar and Rahmi sandstones of the Kareem Formation in a downdip location and to provide water injection to support oil production from the updip Al Amir SE field wells. The Shagar sands were encountered from 10,329 to 10,353 ft MD with 24 ft MD of net reservoir and up to 15% porosity. The Rahmi sands were encountered from 10,404 to 10,432 ft MD with 8 ft MD of net reservoir and up to 10% porosity. Both sands were found to be water bearing, below the field oil-water contact. Interpretation of formation pressure test results from both sands indicates communication with the up-dip producers and good potential for successful water injection. The well has been completed as an injector in the Rahmi sands, with the option to add the Shagar injection under a rigless operation at a later date.
The planned water injection for the Geyad field will begin with the Geyad-5 well that was spudded in July 2011 and has now just been completed. Additional water injectors are also planned for Al Amir SE as well as a possible new exploration well.
Studies have now been completed and permanent facilities put under construction, including facilities to allow the associated gas to be put into production. This is expected to occur by the end of this year.
Delay time in the payment of receivables from EGPC increased in the early part of 2011 as transition took place within the country, a matter experienced by many other producers in Egypt. Circle management have recently undertaken a series of meetings with EGPC senior management agreeing a payment schedule to clear any backlog and return the inflow of funds to normal levels.
Tunisia
Interpretation of the existing seismic over our Tunisian blocks has been progressed in the first half of 2011 and after some unexpected delays in receiving approvals the operator intends that the wells on the Grombalia Permit and Ras Marmour Permit should commence Q4 2011. Approvals for the prospect final location for the Ras Marmour well has been received whilst final approval for the first of the two wells in the Grombalia Permit is still awaited. Acquisition of additional 2D seismic is being considered for the Mahdia Permit as the drilling prospects for the commitment well continue to mature.
Oman
Block 49 seismic coverage is to be augmented by the acquisition of a new 2D survey to the north-east of and adjacent to the 3D survey acquired in 2010. The Ministry of Oil and Gas, Oman has granted an extension to the exploration period for our onshore Block 49 until 26 December 2012. Circle will acquire an additional 2,500 line kilometresof closely spaced 2D seismic survey and drill one exploration well. This 2D survey is intended to provide a better understanding of the whole southern permit area, and outline potential additional lower risk drilling targets. It will complement the existing dataset, and cover an area with sparse coverage of legacy 2D lines. Acquisition parameters for the survey will draw on the experience obtained during the acquisition and processing of the 3D survey.
The Block 52 offshore 2D seismic survey (5,026 line km) acquisition was completed in early 2011 and following processing, this has undergone detailed interpretation. This work on the newly processed seismic has revealed the presence of multiple large prospects that should provide robust targets for exploration drilling. Nine large four way dip closed prospects have been identified and firmed up in the Outer Sawqirah Area of the licence. Internal pre-drill deterministic STOIIP of these nine prospects for the most likely unrisked case is calculated as 7,264 MMBO. The associated ultimate recoverable resources for the nine prospects are estimated internally as 2,179 MMBO. Interpretation has been finalised and a farm-out process has just commenced.
Financial Review
Revenue from oil and gas sales in the first half 2011 amounted to US$28.68 million which represented an increase of 35% over the same period in 2010. This was due mainly to a significant increase in the oil price achieved of US$104.81 per BO over that achieved in H1 2010 of US$74.67 per BO. Gas prices also increased to US$8.65 per Mscf compared to US$6.79 per Mscf in H1 2010.
Gross profit for the period amounted to US$9.94 million (H1 2010: US$6.84 million) while Operating profit at US$8.28 million (H1 2010: US$4.6 million) was up by 80% on the same period 2010.
Net financing cost amounted to a credit of US$0.42 million for the half (H1 2010: US$2.51 million) down by US$2.93 million due mainly to a gain on the fair value of the convertible loan conversion option.
The Group recorded a net profit after tax of US$8.7 million (H1 2010: US$2.09 million).
At 30 June 2011 Group total assets amounted to US$212.91 million (H1 2010: US$136.91 million) while the Group had working capital amounting to US$50.89 million (H1 2010: US$8.69 million) and cash balances of US$29.3 million.
Thomas Anderson
Chairman
7 September 2011
Glossary
BO Barrels of oil
Boepd Barrels of oil equivalent per day
Bopd Barrels of oil per day
EGPC Egyptian General Petroleum Company
Ft Feet
MD Measured depth
MENA Middle-East/North Africa
MMscf Million standard cubic feet
MMscfd Million standard cubic feet per day
STOIIP Stock tank of oil initially in place
2D Two dimensional
3D Three dimensional
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 2011 - UNAUDITED
Hot Features
Premium
6 months 6 months Year ended
to to 31
Notes 30 June 2011 30 June 2010 December 2010
US$000 US$000 US$000
Sales revenue 3 28,689 21,250 44,391
Cost of sales (18,751) (14,414) (27,490)
Gross profit 9,938 6,836 16,901
Administrative
expenses (1,568) (1,265) (3,093)
Share option expense - (559) (576)
Pre-licence costs - - (300)
Exploration costs
written-off (50) (101) (281)
Foreign exchange
loss (40) (312) (68)
Operating profit-
continuing
activities 8,280 4,599 12,583
Finance revenue 6 2,909 277 2,328
Finance costs 7 (2,485) (2,784) (4,512)
Profit before
taxation 8,704 2,092 10,399
Taxation - - (37)
Profit for the
financial period 8,704 2,092 10,362
Basic earnings per 2 1.54c 0.5c 2.19c
share
============== ============== ===============
Diluted earnings per 2 1.27c 0.5c 2.18c
share
============== ============== ===============
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2011 - UNAUDITED
6 months 6 months Year ended
to to 31
30 June 2011 30 June 2010 December 2010
US$000 US$000 US$000
Profit for the financial
period 8,704 2,092 10,362
Total income and expense
recognised in other
comprehensive income - - -
Total comprehensive income
for the period - entirely
attributable to equity
holders 8,704 2,092 10,362
============== ============== ===============
Circle Oil PLC
CONDENSED CONSOLIDATED statement of financial position
AT 30 JUNE 2011 - UNAUDITED
30 June 30 June 31 December
Notes 2011 2010 2010
US$000 US$000 US$000
Assets
Non-current assets
Exploration and evaluation
assets 4 44,984 33,445 39,733
Production and development
assets 5 109,295 80,497 97,384
Property, plant and equipment 99 133 140
--------- --------- ------------
154,378 114,075 137,257
--------- --------- ------------
Current assets
Inventories 105 129 145
Trade and other receivables 29,128 11,810 19,350
Cash and cash equivalents 29,303 10,898 47,114
--------- --------- ------------
58,536 22,837 66,609
--------- --------- ------------
Total assets 212,914 136,912 203,866
========= ========= ============
Equity and liabilities
Capital and reserves
Called up share capital 8,084 5,778 8,084
Share premium 167,083 104,092 167,083
Other reserves 6,658 6,644 6,658
Retained losses (14,254) (32,026) (22,958)
Total equity 167,571 84,488 158,867
--------- --------- ------------
Non-current liabilities
Trade and other payables 1,997 - -
Convertible loan - debt
portion 25,993 22,886 24,374
Derivative financial instruments 9,508 14,923 12,246
Decommissioning provision 196 446 879
37,694 38,255 37,499
--------- --------- ------------
Current liabilities
Trade and other payables 7,612 14,135 7,463
Current tax 37 34 37
Total current liabilities 7,649 14,169 7,500
--------- --------- ------------
Total liabilities 45,343 52,424 44,999
--------- --------- ------------
Total equity and liabilities 212,914 136,912 203,866
========= ========= ============
Circle Oil PLC
CONDENSED CONSOLIDATED cash flow statement
FOR THE SIX MONTHS ENDED 30 JUNE 2011 - UNAUDITED
6 months 6 months
to to Year ended
30 June 30 June 31 December
Notes 2011 2010 2010
US$000 US$000 US$000
Net cash generated by operations 8 1,716 12,929 8,979
Taxes paid - - (40)
Net cash inflow from operating
activities 1,716 12,929 8,939
--------- --------- -------------
Cash flows from investing
activities
Payments to acquire exploration
and evaluation assets (3,346) (12,905) (19,307)
Payments to acquire production
and development assets (15,362) (11,090) (29,703)
Payments to acquire property,
plant and equipment (8) (11) (84)
Interest received 122 42 165
Net cash used in investing
activities (18,594) (23,964) (48,929)
--------- --------- -------------
Cash flows from financing
activities
Issue of ordinary share capital - 1,331 70,070
Financing costs - (527) (3,432)
Interest paid (893) (893) (1,800)
Net cash (outflow)/inflow from
financing activities (893) (89) 64,838
--------- --------- -------------
(Decrease)/increase in cash and
cash equivalents (17,771) (11,124) 24,848
--------- --------- -------------
Cash and cash equivalents at
beginning of period 47,114 22,334 22,334
Effect of foreign exchange rate
changes (40) (312) (68)
Cash and cash equivalents at end
of period 29,303 10,898 47,114
========= ========= =============
Circle Oil PLC
consolidated STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2011 - UNAUDITED
Share based
Share Share payments Translation Accumulated
capital premium reserve reserve losses
US$000 US$000 US$000 US$000 US$000
At 1 January
2010 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)
--------- --------- ------------ ------------ ------------
Issue of
share
capital 2,306 62,991 - - -
Share based
payment - - 812 - -
Reserve
transfer - - (798) - 798
Net profit
for period - - - - 8,270
At 31
December
2010 8,084 167,083 6,661 (3) (22,958)
--------- --------- ------------ ------------ ------------
Issue of
share
capital - - - - -
Share based
payment - - - - -
Net profit
for period - - - - 8,704
At 30 June
2011 8,084 167,083 6,661 (3) (14,254)
========= ========= ============ ============ ============
Circle Oil PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2011
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 2011 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 is not expected to have any material impact on the Group.
Improvements to IFRSs (2010) - The improvements in this amendment clarify the requirements of IFRSs and eliminate inconsistencies within and between Standards. The improvements did not have any impact on the current or prior periods financial statements.
At the date of these interim financial statements the following Standards were effective but not relevant to the Group
IAS 24 (Revised 2010) Related Party Disclosures (effective for accounting periods beginning on or after 1 January 2011).
IAS 32 (amended) Classification of Rights Issues (effective for accounting periods beginning on or after 1 February 2010).
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
2011 2010 2010
US$000 US$000 US$000
Profit for period attributable
to equity holders of the parent 8,704 2,092 10,362
======== ======== ============
'000 '000 '000
Weighted average number of
ordinary shares for the purposes
of basic earnings per share 563,353 415,771 473,689
======== ======== ============
Diluted earnings per share is calculated using the weighted average number of ordinary shares assuming the conversion of its potential dilutive equity derivatives outstanding. All of the Group's potential ordinary shares were dilutive for the period ended 30 June 2011 which resulted in a decrease in earnings per share. The Group had total potential ordinary shares outstanding of 103,354,685 at 30 June 2011 (2010: 113,450,805).
3. Segmental reporting
Six months to 30 June
2011 Africa Middle-East Corporate Total
US$000 US$000 US$000 US$000
Sales revenue 28,689 - - 28,689
Cost of sales (15,246) - - (15,246)
Depreciation (3,505) - - (3,505)
Gross profit 9,938 - - 9,938
Administration expenses (782) (204) (582) (1,568)
9,156 (204) (582) 8,370
Share option expense - - - -
Exploration costs written-off (50) - - (50)
Finance costs - - (2,485) (2,485)
Finance revenue 56 - 2,853 2,909
Other gains/(losses) (68) - 28 (40)
--------- ------------ ---------- ---------
Profit/(loss) before tax 9,094 (204) (186) 8,704
Taxation - - - -
Profit/(loss) after tax 9,094 (204) (186) 8,704
========= ============ ========== =========
Total assets 158,746 24,895 29,273 212,914
========= ============ ========== =========
Total liabilities (7,157) (1,997) (36,189) (45,343)
========= ============ ========== =========
Sales revenue in Africa of US$28.69 million (H1 2009: US$21.25 million) consists of US$26.51 million in oil sales in Egypt and US$2.18 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
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
Administration expenses (769) (221) (275) (1,265)
6,067 (221) (275) 5,571
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 111,386 14,284 11,242 136,912
========= ============ ========== =========
Total liabilities (9,753) (3,892) (38,779) (52,424)
========= ============ ========== =========
Twelve months to 31 December
2010 Africa Middle-East Corporate Total
US$000 US$000 US$000 US$000
Sales revenue 44,391 - - 44,391
Cost of sales (21,903) - - (21,903)
Depreciation (5,587) - - (5,587)
Segment result 16,901 - - 16,901
Administration expenses (1,564) (377) (1,152) (3,093)
15,337 (377) (1,152) 13,808
Share option expense - - (576) (576)
Pre-licence costs (300) - - (300)
Exploration costs written-off (281) - - (281)
Finance costs (98) - (4,414) (4,512)
Finance revenue - - 2,328 2,328
Other gains/(losses) 18 - (86) (68)
Profit/(loss) before tax 14,676 (377) (3,900) 10,399
Taxation - - (37) (37)
Profit/(loss) after tax 14,676 (377) (3,937) 10,362
========= ============ ========== =========
Total assets 137,159 19,975 46,732 203,866
========= ============ ========== =========
Total liabilities (7,509) (76) (37,414) (44,999)
========= ============ ========== =========
4. Exploration and evaluation assets
The movement on exploration and evaluation assets which relate to oil and gas interests during the period was:
Provision
Opening for Closing
Six months to balance Additions impairment balance
30 June 2011 US$000 US$000 US$000 US$000
Africa 19,776 302 - 20,078
Middle-East 19,957 4,949 - 24,906
Other - 50 (50) -
30 June 2011 39,733 5,301 (50) 44,984
========= ========== ============ =========
Provision
Opening for Closing
Six months to balance Additions impairment balance
30 June 2010 US$000 US$000 US$000 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
========= ========== ============ =========
Provision
Opening for Closing
Twelve months to balance Additions impairment balance
31 December 2010 US$000 US$000 US$000 US$000
Africa 11,224 8,573 (21) 19,776
Middle-East 9,741 10,216 - 19,957
Other - 260 (260) -
31 December 2010 20,965 19,049 (281) 39,733
========= ========== ============ =========
Oil and gas interests at 30 June 2011 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 2011. Exploration and evaluation assets have been assessed for impairment having regard to the likelihood of further expenditures and ongoing appraisal for each geographical area.
5. Production and development assets
The movement on production and development assets which relate to oil and gas interests during the period was:
Africa Total
Cost US$000 US$000
At 1 January 2010 78,289 78,289
Additions 9,512 9,512
At 30 June 2010 87,801 87,801
======== ========
Additions 18,718 18,718
At 31 December 2010 106,519 106,519
======== ========
Additions 15,399 15,399
At 30 June 2011 121,918 121,918
======== ========
Africa Total
Accumulated depreciation US$000 US$000
At 1 January 2010 3,522 3,522
Charge for financial period 3,782 3,782
At 30 June 2010 7,304 7,304
======== ========
Charge for financial period 1,831 1,831
At 31 December 2010 9,135 9,135
======== ========
Charge for financial period 3,488 3,488
At 30 June 2011 12,623 12,623
======== ========
Africa Total
Net book value US$000 US$000
At 30 June 2010 80,497 80,497
======== ========
At 31 December 2010 97,384 97,384
======== ========
At 30 June 2011 109,295 109,295
======== ========
6. Finance revenue
6 months 6 months
to to Year ended
30 June 30 June 31 December
2011 2010 2010
US$000 US$000 US$000
Interest receivable 115 42 171
Gain on fair value of conversion
option 2,738 - 1,922
Gain on fair value of additional
option - 235 235
Reversal of unwinding of discount
on decommissioning provision 56 - -
2,909 277 2,328
========= ========= =============
The gain on the fair value of the conversion option (relating to the convertible loan) arose mainly as a result of a decrease in the Company share price volatility during the period and reduced period of time to maturity.
7. Finance costs
6 months 6 months
to to Year ended
30 June 30 June 31 December
2011 2010 2010
US$000 US$000 US$000
Interest payable:
Convertible loan 2,511 2,217 4,612
Capitalised to exploration and
evaluation assets (26) (10) (198)
Capitalised to production and
development assets - (178) -
Loss on fair value of conversion
option - 755 -
Unwinding of discount on decommissioning
provision - - 98
2,485 2,784 4,512
========= ========= =============
Interest payable relating to the convertible loan includes interest paid of US$893,000 (H1 2010: US$893,000) and an effective interest expense (non-cash) of US$1.62 million (H1 2010: US$1.30 million) plus amortisation of transaction costs of US$28,000 (H1 2010: US$28,000).
8. Reconciliation of operating profit to net cash generated by operations
6 months 6 months
to to Year ended
30 June 30 June 31 December
2011 2010 2010
US$000 US$000 US$000
Operating profit 8,704 2,092 10,399
Finance revenue (2,909) (277) (2,328)
Finance costs 2,485 2,784 4,512
Increase/(decrease) in trade
and other payables (152) 12,721 (2,020)
Increase in trade and other
receivables (10,078) (9,195) (8,222)
Decrease/(increase) in inventory 40 (38) (54)
Write-off of exploration costs 50 101 281
Foreign exchange loss 40 312 68
Depreciation 3,536 3,870 5,767
Share option expense - 559 576
Net cash generated by operations 1,716 12,929 8,979
========= ========= ================
9. Regrouping of comparatives
Certain comparative figures stated in this report have been regrouped to reflect current period figures.
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)
Chris Sim
Neil Elliot
Fox-Davies Capital (+44 20 3463 5010)
Daniel Fox-Davies
Richard Hail
Citigate Dewe Rogerson (+44 20 7638 9571)
Martin Jackson
Kate Lehane
Murray Consultants (+353 1 498 0300)
Joe Murray
Joe Heron
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 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 two 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 its prospective Block 52 offshore, Circle also 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 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 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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