Extension of Convertible Loan Agreement

24 May 2012

Circle Oil Plc

("Circle" or the "Company")

Extension of US$30 million Convertible Loan Agreement

Circle Oil Plc (AIM: COP), the international oil and gas exploration, development and production company, is pleased to announce that it has reached agreement with a subsidiary of Kuwait based PetroLink Holding Company ("PetroLink" itself a subsidiary of KGL Investment Company) to extend its US$30 million convertible loan (the "Loan"), due to mature on 19 July 2012, for a further period of three years to 19 July 2015.

The Loan, which is convertible into ordinary shares of the Company has a conversion price of £0.25 per share during the first year of the extension, £0.275 per share during the second year and £0.30 per share during the third year (based on an exchange rate of US$1.5697 to £1). The Loan will continue to carry a 6% coupon payable in US dollars quarterly in arrears.

In addition the Company has agreed to grant PetroLink options over 30 million shares (representing 5.3% of the current issued share capital of the Company) exercisable for a period of three years from 19 July 2012 at an exercise price of £0.30 per share during the first year of the extension, £0.325 per share during the second year and £0.40 per share during the third year.

Prof Chris Green, CEO, said:

"We are very pleased to have agreed this three year extension with PetroLink which is very beneficial for the Company, provides an enhanced strike price in years two and three and continues our strong relationship with PetroLink."

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.