Half Yearly Report

INTERIM REPORT 2013

2 September 2013

CIRCLE OIL PLC

("Circle or the "Company")

2013 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 2013.

Financial Highlights

· Group revenue up by 20% to US$42.3 million (H1 2012: US$35.4 million)

· Profit for the period up by 10% to US$14.7 million (H1 2012: US$13.3 million)

· EBITDA up by 34% to US$25.2 million (H1 2012: US$18.8 million)

· Cash generated from operations after working capital changes up by 69% to US$23.7million

(H1 2012: US$14.1 million)

· Available cash at 30 June 2013 up by 92% to US$23.5 million (H1 2012: US$12.2 million)

Operational Highlights

· Aggregate oil and gas production net to Circle from Morocco and Egypt is now in the range of 6,170 boepd, an increase of 47% since year-end 2012

· Gas sales in Morocco increased to over 6.8 MMscf/d gross (approx 900 boepd net to Circle)

· 2 new producers and 1 new water injector successfully drilled in Egypt

· Current oil production in Egypt of approximately 11,000 bopd (4,400 bopd net to Circle)

· NW Gemsa 12" gas export pipeline commissioned in February and current production is circa 12 MMscf/d (2,184 boepd, approx 870 boepd net to Circle)

· New 3D seismic survey acquired offshore Tunisia

· Mahdia permit, Tunisia working interest increased to 100%

· New farm-in to Beni Khaled production licence in Tunisia signed giving Circle 30% a working interest

Professor Chris Green, CEO, commented:

"The interim results show Circle's efforts in exploration and development activities and increased production levels have been rewarded with further improved profitability. Daily oil and gas production levels are at a record level reflecting the benefit of previous investment and activity. We are also starting to move forward on our other existing assets and the recently added new Tunisian assets. Our daily gas production in Morocco has risen to in excess of 6.8 MMscf/d gross. The addition of five production wells and two water injection wells in NW Gemsa over the last 12 months has further increased oil and gas productivity which now stands at approximately 13,000 boepd gross. The delayed Moroccan drilling programme which will commence in H2 has been increased to 12 wells plus two workovers. The back to back drilling, combining both 2013 and 2014 drilling programmes, is designed to further enhance our Moroccan delivery and revenue stream. We have also tendered an additional 2D seismic survey for offshore Oman to delineate inshore exploration drilling targets."

CIRCLE OIL PLC

INTERIM REPORT

FOR THE SIX MONTHS ENDED 30 JUNE 2012 - UNAUDITED

CHAIRMAN'S STATEMENT

Circle's first half 2013 performance has seen income increases which commenced towards the end of Q1 and will show their fuller effect at financial year-end. An increase in industry offtake of natural gas in Morocco through our new pipeline has raised our gas sales to 6.8 MMscf/d. Successful drilling in Egypt has been marked by the commissioning of two new producers and one new water injector during H1 2013. Circle's share of oil and gas production from Egypt and Morocco for the first half of 2013 is now in the range of 6,170 boepd, a 47% increase over year-end 2012. While conditions in Egypt are attracting considerable media interest, our operations are unaffected and we continue to receive regular payments from EGPC. We are confident that recent additions to acreage and planned exploration and development activity will build on our recent success.

OPERATIONS

Morocco

In Morocco the period has focused on increasing production levels to take further advantage of local demands from industrial consumers at attractive prices. The daily production rate from Sebou has risen steadily from 4.5 MMscf/d in January to 6.8 MMscf/d (gross) through the half year. The interpretation of the seismic surveys acquired in 2011 over the Sebou (17 sq km) and Lalla Mimouna (135 sq km) permits is complete and has resulted in the generation of multiple potential drilling locations which can add significant reserves to the existing reserve base. The drilling activity delayed by contractual issues is now anticipated to commence later this year with an increased twelve well programme combining both 2013 and 2014 drilling programmes as well as two workovers. The wells will be split between both the Sebou and Lalla Mimouna permits. The future drilling programmes and addition of further local offtake contracts are designed to assist in filling the current 8 inch pipeline capacity and further increase our Moroccan revenue stream.

The 2013 RCR reserves estimates were completed in early 2013 and in the Sebou and Oulad N'Zala concessions, the 2P value of Gross Initial Gas Reserves is 30.15 Bscf, with 22.32 Bscf net to Circle, this being very similar to the 2012 estimate. Following production of 4.4 Bscf through to the end of June 2013, the 2P Gross Remaining Reserves are estimated to be 25.75 Bscf, with 19.02 Bscf net to Circle.

Egypt

Operational activities have continued unaffected by in-country change and ten wells in the Al Amir SE field (AASE) and four wells in the Geyad field were on production at the end of June 2013. The combined production rate of approximately 10,900 bopd (gross) and 12.6 MMscf/d (gross) of gas, gives a combined total in excess of 13,100 boepd (gross). Water injection through four wells in AASE and one well in the Geyad field is providing proven and successful pressure support to maximise recovery efficiency.

Circle's already impressive drilling performance in Egypt was further augmented in the first half of 2013. Two successful production wells (AASE-14, AASE-17), one successful appraisal well (AASE-18) and a strategically important water injection well (AASE-16) were completed. The Shehab-2 exploration well encountered a potential gas bearing interval and, following logging, a hydraulic fracturation was completed on 30 July 2013. The test was unsuccessful with no flow to surface and the well has now been temporarily abandoned whilst alternative stimulation options are considered.

Work on the export gas line to the SUCO facility at Zeit Bay was completed early in the year and gas production was commissioned in February 2013. The daily initial production rate has risen from start up on 12 February at 8 MMscf/d to the value of 12.6 MMscf/d at end June. Valuable condensate and natural gas liquids are also stripped out of the gas and sold to EGPC.

The 2013 drilling programme on the development licences has been very successful and investment over the next 12 months should see reduced amounts of capital investment required as the initial field development programme approaches maturity. The spectre of consistent production levels with reducing capital expenditure contributing to a maximised revenue stream now approaches. This can be linked to optimising oilfield production for the long term and the resulting revenue stream.

The 2013 RCR reserves estimates were completed in early 2013 and in the NW Gemsa concession, the 2P value of Gross Initial Oil Reserves is 37.71 MMbo and the 2P Gross Initial Raw Gas Reserves are estimated to be 42.66 Bscf. This totals a 2P Gross Initial Reserves value of 45.05 MMboe (18.02 MMboe net to Circle). Following production of 12.2 MMboe through to the end of June 2013, the 2P Gross Remaining Reserves are estimated to be 32.85 MMboe (13.14 MMboe net to Circle). Cumulative water injection to end June 2013 was 11.5 MMbw.

Tunisia

Operations and investment in Tunisia is now moving more centre stage as both existing and new assets are becoming active. Following the drilling of Bou Argoub-1 exploration well on the Grombalia permit in late 2012, the rig was mobilised to drill the Sedouikch exploration well on the Ras Marmour permit. The drilling location itself has received the necessary technical approvals and subject to receipt of the final environmental approvals this well is planned to be drilled in the second half of 2013.

A 300 sq km 3D seismic survey was successfully acquired over the offshore Mahdia block in early 2013 and processing is underway, with a plan to commit to drill an exploration well in the first half of 2014. The results of the 2013 3D survey are presently being assessed and are showing the structures seen on the 2D data firming up into good drilling targets.

Post reporting period Circle announced, subject to the approval of the Tunisian authorities, that it had increased its interest in the Mahdia permit to a 100% working interest by acquiring the remaining 30% and becoming operator. Similarly post period, Circle has farmed in to an initial 30% working interest to the existing Beni Khaled production licence in Tunisia with the ability to increase this to 50%. This farm-in has the attraction of small scale existing production and a proven discovery as yet undeveloped with the possibility for low risk nearer term production.

The two recent asset increases will result in increased operational activity in the coming 12 months with Mahdia to be drilled and new 3D in Beni Khaled. Drilling in Beni Khaled is also scheduled for 2014.

Oman

The full potential of Omani assets has yet to be realised and whilst Block 49 remains of higher risk we continue to maximise its potential and a-2D seismic survey of 2,306 line kilometre was acquired over the Block in 2012. This survey was located in the south-eastern part of the permit, north-east of the 2010 3D survey. Interpretation of this 2D survey is close to completion to determine potential drilling targets.

The farm-out process for Block 52, a long process, has continued over the first half of 2013, and, to further exploit the exploration potential of the acreage it was decided to acquire additional 2D seismic coverage over the area inshore of Sawqirah Bay. Here three potential shallow water targets have been identified and a detailed 2D seismic survey has now been tendered to acquire data before year-end. This acquisition should firm up these additional targets for drilling in this shallow water region of the block.

In addition, Circle has bid for additional acreage in the 2013 Omani bid round and awaits the adjudication. If successful this additional onshore acreage is regarded as an area with great potential for the future.

FINANCIAL REVIEW

Circle has delivered strong and positive results for the first half 2013. Oil and gas sales revenue has increased by 20% to US$42.3 million (H1 2012: US$35.4 million) due principally to a 49% increase in sales volume of gas in Morocco and a 16% increase in sales volume of oil in Egypt. Sales of gas and associated liquids in Egypt, which commenced in February 2013, have also contributed to the increased sales revenue.

Gross profit for the period under review increased to US$18.6 million (H1 2012: US$16.4 million) while operating profit was US$16.7 million (H1 2012: US$14.7 million) representing an increase of 13%. After administrative expenses of US$1.9 million (H1 2012: US$1.8 million) and net financing costs which amounted to US$2.0 million (H1 2012: US$1.4 million), and included US$1.1 million of non-cash accounting charges, the Group recorded a profit for the period of US$14.7 million (H1 2012: US$13.3 million).

EBITDA for the six month period increased by 34% to US$25.2 million (H1 2012: US$18.8 million).

In relation to EGPC, we continue to receive regular payments and our receivables have been maintained at a stable level over the past twelve months, despite rising levels of production.

During the period under review the Company drew down US$11.6 million under the Ahli United Bank working capital facility, which was used to fund all of the NW Gemsa capital and operating expenditure. At 30 June 2013, Group cash balances included US$5.1 million which was available to re-pay certain of the amounts drawn down.

Negotiations on concluding the reserve base lending with IFC continue at an advanced stage and will be reported in due course.

Net cash generated from operations before working capital changes amounted to US$25.2 million (H1 2012: US$19.0 million). Following working capital movements, net cash generated in H1 2013 amounted to US$23.7 million (H1 2012: US$14.1 million) an increase of 69%.

Available cash at 30 June 2013 was up by 92% at US$23.5 million (H1 2012: US$12.2 million) while the Group had net financial gearing of 3% (H1 2012: 6%).

The Company will shortly implement a long-term incentive plan to incentivise and retain all of its staff and further align the interests of shareholders and staff.

OUTLOOK

Circle has finished the first half of 2013 with both its financial and operational position strengthened. The Company is about to embark on exploration activity in Morocco and Tunisia which has the potential to significantly enhance our position in these countries. The recent self-funded acquisitions which Circle made are a strong indicator of our strategy to grow the business and our continuing belief in the opportunities which are available in the MENA region. Circle will seek to grow our business both through the drill bit and through careful, value-driven operations and acquisitions.

Thomas Anderson

Chairman

30 August 2013

Glossary

Circle Oil PLC

CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2013 - UNAUDITED

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2013 - UNAUDITED

Circle Oil PLC

CONDENSED CONSOLIDATED statement of financial position

AT 30 JUNE 2013 - UNAUDITED

 Circle Oil PLC

CONDENSED CONSOLIDATED cash flow statement

FOR THE SIX MONTHS ENDED 30 JUNE 2013 - UNAUDITED

Circle Oil PLC

consolidated STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2013 - UNAUDITED

Circle Oil PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2013

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 2013 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 7 (amended) Financial Instruments: Disclosures (effective for accounting periods beginning on or after 1 January 2013)

IFRS 9 Financial Instruments (effective for accounting periods beginning on or after 1 January 2013)

IFRS 13 Fair Value Measurement (effective for accounting periods beginning on or after 1 January 2013)

IAS 1 Presentation of Financial Statements (effective for accounting periods beginning on or after 1 July 2012)

IAS 19 Employee Benefits (effective for accounting periods beginning on or after 1 January 2013)

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:

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, warrants and employee share options. All of the Group's potential ordinary shares were dilutive for the period ended

30 June 2013 which resulted in a decrease in earnings per share. The Group had total potential ordinary shares outstanding of 131,337,728 at 30 June 2013 (2012: 105,429,005).

3. Segmental reporting

Sales revenue in Africa of US$42.33million (H1 2012: US$35.36 million) consists of US$33.28 million in oil sales and US$0.63 million in gas and associated liquid sales in Egypt together with US$8.42 million in gas sales in Morocco. Corporate comprises mainly corporate expenses, cash and other assets and liabilities not directly attributable to an operating segment.

4. Exploration and evaluation assets

The movement on exploration and evaluation assets which relate to oil and gas interests during the period was:

Oil and gas interests at 30 June 2013 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 2013. 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:

6. Finance revenue

7.  Finance costs