Proactive Investors UK
Circle is now is now drilling its second well, of twelve, in Morocco.
Solid production from its operations in Egypt and Morocco saw Circle Oil’s (LON:COP) interim revenues rise by 13%.
At the end of June, production from Egypt was running at 11,592 barrels daily, while first half gas production from Sebou in Morocco averaged between 6.8 and 7 MMscf/d.
Circle is now is now drilling its second well, of twelve, in Morocco to boost both reserves and revenues.
The group also recently announced a successful exploration well, EMD-1, in the Mahdia Block offshore Tunisia, which hit total hydrocarbon column of 133 metres.
For the six months to June, revenue rose to US$47.8 mln (US$42.3 mln), though underlying earnings (EBITDA) fell 10% to US$22.6mln with profits 36% lower at US$9.4 mln due to the increased exploration, lower cost recovery and a US$100mln debt facility agreed with the IFC in April.
Professor Chris Green, Circle’s chief executive, said: “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.”
Available cash at 30 June rose by 27% to US$29.9mln.
Broker Investec said the top line result was in line with full year expectations while the bottom line was marginally behind.
Receivables increased to US$48m from US$42mln at year end, it added, but Egyptian balances were broadly flat year-on-year.
“Circle will hold its AGM this Friday [5 September] and comments on farm down strategy post the EMD-1 result (Tunisia) will be of particular interest. Near term operational catalysts will come from Morocco and the drilling at Sebou.”
By Philip Whiterow
