14th Sep 2010 07:00
14 September 2010
CIRCLE OIL PLC
("Circle" or the "Company")
2010 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 2010.
Highlights
Morocco
- Gas wells KSR-8 and KSR-9 brought into production, with combined 1.4 to 2.0 MMscfd currently being produced using both at limited output
- Lalla Mimouna Nord and Sud blocks signed in January 2010, increasing our acreage position in the Rharb Basin from 230 sq km to 2,300 sq km
- 2010 drilling campaign of five wells recently commenced, plus the testing of one well which remained untested from the 2009 drilling campaign
Egypt
- Drilling continued on NW Gemsa permit with eight commercial wells completed since drilling began in mid 2008. A tenth well is presently drilling.
- 3.1 million barrels (gross) of 41o API oil have been produced from NW Gemsa permit by mid-September 2010
- Production continued in the Al Amir SE and Geyad to reach 9,000 to 9,500 bopd (gross) from eight wells in third quarter 2010
Financial
- Revenue of US$21.3 million recorded from oil and gas sales for the period (H1 2009: US$3.5 million)
- EBITDA of US$8.5 million (H1 2009: Loss US$1.2 million)
- Profit after tax of US$2.1 million (H1 2009: Loss US$15.9 million)
- Net cash generated by operations US$12.9 million (H1 2009: Net cash outflow US$4.3 million)
- Group total assets at 30 June 2010 of US$147.6 million: Group net assets of US$84.5 million
- Raised c. £42.5 million (c. US$65 million) in August 2010 in secondary placing of shares
Professor Chris Green, CEO, commented:
"I am delighted with the continuing progress of the Company during the first half of 2010.
We have recorded our first operating profit amounting to US$4.6 million for the half year 2010 and this augurs well for the future. In addition, the Group generated US$12.9 million cash from operations during the period.
Our daily production levels in Egypt have continued to increase and we are now planning to bring the associated gas into production. In Morocco, the second drilling campaign has commenced and we are working hard to bring the additional gas wells in Morocco on-stream by adding a larger capacity pipeline, which should result in a healthy increase in revenues.
Subsequent to 30 June a very successful funding was completed and US$65 million raised in a secondary placing of new shares in August. The proceeds of the placing will be used to accelerate the Company's existing portfolio and to also acquire additional assets.
Overall this is an excellent achievement for a relatively early stage company."
CHAIRMAN'S STATEMENT
Dear Shareholder,
This has been another very busy and eventful period for Circle with the drilling programme continuing in Egypt and successful results being achieved in every hole drilled and tested. The new drilling campaign has recently commenced in Morocco with one gas well remaining to be tested from the 2009 drilling campaign. We have recently completed a 900 sq km 3D seismic programme over Block 49 in Oman and will be analysing these results with the intention of proving up drill ready prospects as early as possible.
Over the period the Company has substantially increased production levels. We identified excellent prospects to drill and this has been confirmed by our successful drilling through both 2009 and in the first half of 2010. Full credit is due to our technical team for maintaining our success rate. Circle's share of oil and gas production is currently ranging between 3,850 and 4,150 boepd which sets us well on course towards our attributable production target of 10,000 boepd in the medium term.
OPERATIONS
Morocco
Production has been constrained by the limited capacity of the existing pipeline and this is being addressed by the construction of a new gas pipeline to allow us to supply potential customers in Kenitra, north of Rabat. Pre-planning for the new pipeline is completed and the pipe ordered. Two additional wells KSR-8 and KSR-9 have been put into limited production and the increased production and all of the output from the Sebou permit will be sold locally. We also plan to acquire additional 3D seismic in the new Lalla Mimouna Nord permit and existing Sebou permit to assist in the definition of prospects to drill with a view to further increasing our gas production. The new drilling programme of five wells has recently commenced with the first well in the Sebou permit designated KAB-1.
Egypt
Al Amir SE-1 to SE-6 are now on production together with Geyad 1X and 2ST giving a combined rate from the eight wells ranging between 9,000 to 9,500 bopd. In addition, a productive sand was tested in the Lower Rudeis of well Al Amir SE-6X, which provides a further exploration target for the block. Production testing of the heavy oil discovery at Al Amir 1 ST2 has been completed and results are being analysed for commerciality. The appraisal drilling continues and future successful wells will be connected to the existing infrastructure and brought into production as quickly as possible. It is also planned to drill water injection wells to provide pressure support and increase productivity for both the Al Amir SE and Geyad fields. Studies have now been completed to allow the associated gas to be put into production, which is expected to occur in the next six months.
Tunisia
The 2009 seismic acquisition completed over the offshore Mahdia Permit and the smaller 2D programme over the onshore Ras Marmour Permit, together with reinterpretation of seismic in the Grombalia Permit has resulted in firming up prospects for drilling. The latter, in the Grombalia Permit will be further refined for drilling, presently scheduled for early next year.
Oman
We have completed the field work on the 3D seismic survey on Block 49 and are now commencing the processing of the field data. When this is processed and interpreted we hope to identify a drilling target and set an early date to commence this drilling. We also issued a tender for a 5,000 km 2D marine seismic survey in Block 52 for execution later in the year.
FINANCIAL
Revenue from oil and gas sales in the first half of the year was US$21.25 million which represented a six fold increase over the same period in 2009 due mainly to increased production in the NW Gemsa permit in Egypt as a result of which the Company recorded a first operating profit of US$4.60 million (H1 2009: Loss US$1.29 million).
Finance costs at US$2.78 million were down by US$11.94 million on H1 2009 due to a significant reduction in the loss on the fair value of the conversion option relating to the convertible loan.
Net cash generated by operations amounted to US$12.93 million (H1 2009: Cash outflow US$4.3 million) and was mainly comprised of US$4.60 million from operating profit, US$3.87 million from depreciation and US$3.52 million from working capital changes.
At 30 June 2010 Group total assets amounted to US$147.65 million (H1 2009: US$103.78 million) while net assets amounted to US$84.49 million (H1 2009: US$51.47 million). The Company remains well funded with cash balances of US$10.89 million at 30 June 2010 which excludes US$65 million (gross) raised in August following a placing of its shares. Current cash position is US$66 million.
OUTLOOK
We plan to increase production in Egypt and, particularly so, in Morocco when the new pipeline is commissioned early next year. The most exciting development to look forward to however, is the drilling of Block 49 in Oman which, if successful, could be transformational.
We also hope to complete before the year-end a follow up 2D seismic study on the offshore Block 52 in Oman. We are also planning small targeted 2D seismic programmes on our onshore blocks in Tunisia to give us a better geological understanding in both permits.
As mentioned in the 2009 Annual Report in June, the Company is examining the possibility of adding value rapidly by investing in and acquiring development opportunities in the Middle-East and North Africa. A number of projects are presently under detailed technical and commercial review.
Thomas Anderson
Chairman
13 September 2010
Glossary
41o API Oil Gravity of 41 degrees on the American Petroleum Institute scale
bopd Barrels of oil per day
boepd Barrels of oil equivalent per day
EBITDA Earnings before interest, tax, depreciation and amortisation
MENA Middle-East/North Africa
MMscfd Million cubic feet per day
P1 development projects A discovered field with proven reserves awaiting development
P2 development projects A discovered field with proven plus probable reserves awaiting development
Sq km Square kilometres
2D Two dimensional
3D Three dimensional
Circle Oil PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2010 - UNAUDITED
|
|
Notes |
6 months to 30 June 2010 |
|
6 months to 30 June 2009 |
|
Year ended 31 December 2009 |
|
|
|
US$000 |
|
US$000 |
|
US$000 |
|
|
|
|
|
|
|
|
|
Sales revenue |
4 |
21,250 |
|
3,512 |
|
15,093 |
|
|
|
|
|
|
|
|
|
Cost of sales |
|
(14,414) |
|
(3,512) |
|
(7,721) |
|
|
|
|
|
|
|
|
|
Gross profit |
|
6,836 |
|
- |
|
7,372 |
|
|
|
|
|
|
|
|
|
Administrative expenses |
|
(1,265) |
|
(1,313) |
|
(2,315) |
|
|
|
|
|
|
|
|
|
Share option expense |
2 |
(559) |
|
(987) |
|
(1,496) |
|
|
|
|
|
|
|
|
|
Exploration costs written-off |
|
(101) |
|
- |
|
(4,932) |
|
|
|
|
|
|
|
|
|
Foreign exchange (loss)/gain |
|
(312) |
|
1,007 |
|
1,027 |
|
|
|
|
|
|
|
|
|
Operating profit/(loss) - continuing activities |
|
4,599 |
|
(1,293) |
|
(344) |
|
|
|
|
|
|
|
|
|
Finance revenue |
|
277 |
|
89 |
|
134 |
|
|
|
|
|
|
|
|
|
Finance costs |
7 |
(2,784) |
|
(14,720) |
|
(13,265) |
|
|
|
|
|
|
|
|
|
Profit/(loss) before taxation |
|
2,092 |
|
(15,924) |
|
(13,475) |
|
|
|
|
|
|
|
|
|
Taxation |
|
- |
|
- |
|
(34) |
|
|
|
|
|
|
|
|
|
Profit /(loss) for the financial period |
|
2,092 |
|
(15,924) |
|
(13,509) |
|
|
|
|
|
|
|
|
|
Basic and diluted earnings/(loss) per share |
3 |
0.50c |
|
(4.57c) |
|
(3.66c) |
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2010 - UNAUDITED
|
|
|
6 months to 30 June 2010 |
|
6 months to 30 June 2009 |
|
Year ended 31 December 2009 |
|
|
|
US$000 |
|
US$000
|
|
US$000
|
|
Profit/(loss) for the financial period |
|
2,092 |
|
(15,924) |
|
(13,509) |
|
|
|
|
|
|
|
|
|
Total income and expense recognised in other comprehensive income |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period - entirely attributable to equity holders |
|
2,092 |
|
(15,924) |
|
(13,509) |
Circle Oil PLC
CONDENSED CONSOLIDATED statement of financial position
AT 30 JUNE 2010 - UNAUDITED
|
|
Notes |
30 June 2010 |
|
30 June 2009 |
|
31 December 2009 |
|
|
|
US$000 |
|
US$000
|
|
US$000
|
|
Assets |
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
Exploration and evaluation assets |
5 |
33,445 |
|
91,147 |
|
20,965 |
|
Production and development assets |
6 |
80,497 |
|
- |
|
74,767 |
|
Property, plant and equipment |
|
133 |
|
249 |
|
210 |
|
|
|
114,075 |
|
91,396 |
|
95,942 |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Inventories |
|
129 |
|
- |
|
91 |
|
Trade and other receivables |
|
22,543 |
|
3,602 |
|
13,789 |
|
Cash and cash equivalents |
|
10,898 |
|
8,779 |
|
22,334 |
|
|
|
33,570 |
|
12,381 |
|
36,214 |
|
|
|
|
|
|
|
|
|
Total assets |
|
147,645 |
|
103,777 |
|
132,156 |
|
|
|
|
|
|
|
|
|
Equity and liabilities |
|
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
|
|
|
Called up share capital |
|
5,778 |
|
4,799 |
|
5,730 |
|
Share premium |
|
104,092 |
|
78,393 |
|
103,336 |
|
Other reserves |
2 |
6,644 |
|
4,826 |
|
5,999 |
|
Retained losses |
|
(32,026) |
|
(36,545) |
|
(34,118) |
|
|
|
|
|
|
|
|
|
Total equity |
|
84,488 |
|
51,473 |
|
80,947 |
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
Convertible loan - debt portion |
|
22,886 |
|
20,344 |
|
21,562 |
|
Derivative financial instruments |
|
14,923 |
|
17,146 |
|
14,403 |
|
Decommissioning provision |
|
446 |
|
- |
|
446 |
|
|
|
|
|
|
|
|
|
|
|
38,255 |
|
37,490 |
|
36,411 |
|
Current liabilities |
|
|
|
|
|
|
|
Trade and other payables |
|
24,902 |
|
14,814 |
|
14,798 |
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
24,902 |
|
14,814 |
|
14,798 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
63,157 |
|
52,304 |
|
51,209 |
|
|
|
|
|
|
|
|
|
Total equity and liabilities |
|
147,645 |
|
103,777 |
|
132,156 |
Circle Oil PLC
CONDENSED CONSOLIDATED cash flow statement
FOR THE SIX MONTHS ENDED 30 JUNE 2010 - UNAUDITED
|
|
Notes |
6 months to 30 June 2010 |
|
6 months to 30 June 2009 |
|
Year ended 31 December 2009 |
|
|
|
US$000 |
|
US$000
|
|
US$000
|
Net cash generated/(used) by operations |
8 |
12,929 |
|
(4,336) |
|
(737) |
Taxes paid |
|
- |
|
- |
|
(21) |
|
|
|
|
|
|
|
|
|
Net cash inflow/(outflow) from operating activities |
|
12,929 |
|
(4,336) |
|
(758) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
Payments to acquire exploration and evaluation assets |
|
(12,905) |
|
(20,058) |
|
(12,372) |
|
Payments to acquire production and development assets |
|
(11,090) |
|
- |
|
(23,088) |
|
Payments to acquire property, plant and equipment |
|
(11) |
|
(23) |
|
(51) |
|
Interest received |
|
42 |
|
426 |
|
480 |
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
(23,964) |
|
(19,655) |
|
(35,031) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
Issue of ordinary share capital |
|
1,331 |
|
- |
|
28,177 |
|
Financing costs |
|
(527) |
|
- |
|
(1,958) |
|
Interest paid |
|
(893) |
|
(907) |
|
(1,800) |
|
|
|
|
|
|
|
|
|
Net cash (outflow)/inflow from financing activities |
|
(89) |
|
(907) |
|
24,419 |
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents |
|
(11,124) |
|
(24,898) |
|
(11,370) |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
22,334 |
|
32,670 |
|
32,670 |
|
|
|
|
|
|
|
|
|
Effect of foreign exchange rate changes |
|
(312) |
|
1,007 |
|
1,034 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
10,898 |
|
8,779 |
|
22,334 |
|
|
|
|
|
|
|
|
Circle Oil PLC
consolidated STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2010 - UNAUDITED
|
|
|
Share capital US$000 |
|
Share premium US$000 |
|
Share based payments reserve US$000 |
|
Translation reserve US$000 |
|
Accumulated losses US$000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2009 |
|
4,799 |
|
78,393 |
|
3,186 |
|
(3) |
|
(20,621) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of share capital |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based payment |
|
- |
|
- |
|
1,643 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for period |
|
- |
|
- |
|
- |
|
- |
|
(15,924) |
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30 June 2009 |
|
4,799 |
|
78,393 |
|
4,829 |
|
(3) |
|
(36,545) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of share capital |
|
931 |
|
24,943 |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based payment |
|
- |
|
- |
|
1,185 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve transfer |
|
- |
|
- |
|
(12) |
|
- |
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit for period |
|
- |
|
- |
|
- |
|
- |
|
2,415 |
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2009 |
|
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) |
|
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
1. Basis of preparation
The condensed 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.
At the date of these interim financial statements the following Standards and Interpretation were in issue but not yet effective:
IFRS 9 Financial Instruments (effective for accounting periods beginning on or after 1 January 2013)
IAS 24 (revised Nov. 2009) Related Party Disclosures (effective for accounting periods beginning on or after 1 January 2011)
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (effective for accounting periods beginning on or after 1 July 2010)
The Directors anticipate that all of the above Standards and Interpretation will be adopted in the Group's financial statements in future periods and that they will have no material impact on the financial statements of the Group in the period of initial application.
2. Share option expense
The fair value of employee share options is recognised as an employee expense in the income statement (share option expense) and a corresponding reserve set up in the statement of financial position (other reserves). The associated expense is amortised over the vesting period of the share options. For the six months to 30 June 2010 a charge of US$559,000 arose (H1 2009: US$987,000).
3. Basic and diluted earnings/(loss) per share
The calculation of basic earnings/(loss) per share attributable to the ordinary equity holders is based on the following data:
|
|
30 June 2010 |
|
30 June 2009 |
|
31 December 2009 |
|
|
US$000 |
|
US$000 |
|
US$000 |
|
Profit/(loss) for period attributable to equity holders of the parent |
2,092 |
|
(15,924) |
|
(13,509) |
|
|
|
|
|
|
|
|
|
'000 |
|
'000 |
|
'000 |
|
Weighted average number of ordinary shares for the purposes of basic earnings per share |
415,771 |
|
348,184 |
|
368,825 |
As all of the Group's potential ordinary shares were anti-dilutive for the period ended 30 June 2010 the diluted earnings/(loss) per share is not applicable.
4. Segmental reporting
|
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 |
|
|
|
|
|
|
|
|
|
|
Administrative expenses |
(769) |
|
(221) |
|
(275) |
|
(1,265) |
|
|
|
|
|
|
|
|
|
|
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 |
122,119 |
|
14,284 |
|
11,242 |
|
147,645 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
(20,486) |
|
(3,892) |
|
(38,779) |
|
(63,157) |
|
|
|
|
|
|
|
|
|
Sales revenue in Africa of US$21.25 million (H1 2009: US$3.51 million) consists of US$20.11 million in oil sales in Egypt and US$1.14 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 2009 |
Africa |
|
Middle-East |
|
Corporate |
|
Total |
|
|
US$000 |
|
US$000 |
|
US$000 |
|
US$000 |
|
|
|
|
|
|
|
|
|
|
Sales revenue |
3,512 |
|
- |
|
- |
|
3,512 |
|
|
|
|
|
|
|
|
|
|
Cost of sales |
(3,512) |
|
- |
|
- |
|
(3,512) |
|
|
|
|
|
|
|
|
|
|
Segment result |
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
Administrative expenses |
(889) |
|
(275) |
|
(149) |
|
(1,313) |
|
|
|
|
|
|
|
|
|
|
Share option expense |
- |
|
- |
|
(987) |
|
(987) |
|
|
|
|
|
|
|
|
|
|
Other gains |
39 |
|
- |
|
968 |
|
1,007 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
(850) |
|
(275) |
|
(168) |
|
(1,293) |
|
|
|
|
|
|
|
|
|
|
Finance costs |
- |
|
- |
|
(14,720) |
|
(14,720) |
|
|
|
|
|
|
|
|
|
|
Finance revenue |
- |
|
- |
|
89 |
|
89 |
|
|
|
|
|
|
|
|
|
|
Loss before tax |
(850) |
|
(275) |
|
(14,799) |
|
(15,924) |
|
|
|
|
|
|
|
|
|
|
Taxation |
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
Loss after taxation |
(850) |
|
(275) |
|
(14,799) |
|
(15,924) |
|
|
|
|
|
|
|
|
|
|
Total assets |
85,714 |
|
9,205 |
|
8,858 |
|
103,777 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
(13,395) |
|
(722) |
|
(38,187) |
|
(52,304) |
|
Twelve months to 31 December 2009 |
Africa |
|
Middle-East |
|
Corporate |
|
Total |
|
|
US$000 |
|
US$000 |
|
US$000 |
|
US$000 |
|
|
|
|
|
|
|
|
|
|
Sales revenue |
15,093 |
|
- |
|
- |
|
15,093 |
|
|
|
|
|
|
|
|
|
|
Cost of sales |
(7,721) |
|
- |
|
- |
|
(7,721) |
|
|
|
|
|
|
|
|
|
|
Segment result |
7,372 |
|
- |
|
- |
|
7,372 |
|
|
|
|
|
|
|
|
|
|
Administrative expenses |
(1,604) |
|
(457) |
|
(254) |
|
(2,315) |
|
|
|
|
|
|
|
|
|
|
Share option expense |
- |
|
- |
|
(1,496) |
|
(1,496) |
|
|
|
|
|
|
|
|
|
|
Exploration costs written-off |
(4,932) |
|
- |
|
- |
|
(4,932) |
|
|
|
|
|
|
|
|
|
|
Other gains |
4 |
|
- |
|
1,023 |
|
1,027 |
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) |
840 |
|
(457) |
|
(727) |
|
(344) |
|
|
|
|
|
|
|
|
|
|
Finance costs |
- |
|
- |
|
(13,265) |
|
(13,265) |
|
|
|
|
|
|
|
|
|
|
Finance revenue |
- |
|
- |
|
134 |
|
134 |
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before tax |
840 |
|
(457) |
|
(13,858) |
|
(13,475) |
|
|
|
|
|
|
|
|
|
|
Taxation |
- |
|
- |
|
(34) |
|
(34) |
|
|
|
|
|
|
|
|
|
|
Profit/(loss) after tax |
840 |
|
(457) |
|
(13,892) |
|
(13,509) |
|
|
|
|
|
|
|
|
|
|
Total assets |
100,036 |
|
9,789 |
|
22,331 |
|
132,156 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
(13,763) |
|
(722) |
|
(36,724) |
|
(51,209) |
5. 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 2010
|
|
Opening balance US$000 |
|
Additions US$000 |
|
Provision for impairment US$000 |
|
Depreciation US$000 |
|
Transfer to production & development assets US$000 |
|
Closing balance 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 |
|
Six months to 30 June 2009
|
|
Opening balance US$000 |
|
Additions US$000 |
|
Provision for impairment US$000 |
|
Depreciation US$000 |
|
Transfer to production & development assets US$000 |
|
Closing balance US$000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa |
|
57,537 |
|
27,844 |
|
- |
|
(3,512) |
|
- |
|
81,869 |
|
Middle-East |
|
8,181 |
|
988 |
|
- |
|
- |
|
- |
|
9,169 |
|
Other |
|
109 |
|
- |
|
- |
|
- |
|
- |
|
109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30 June 2009 |
|
65,827 |
|
28,832 |
|
- |
|
(3,512) |
|
- |
|
91,147 |
|
Twelve months to 31 December 2009
|
|
Opening balance US$000 |
|
Additions US$000 |
|
Provision for impairment US$000 |
|
Depreciation US$000 |
|
Transfer to production & development assets US$000 |
|
Closing balance US$000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa |
|
57,537 |
|
2,031 |
|
(4,620) |
|
- |
|
(43,724) |
|
11,224 |
|
Middle-East |
|
8,181 |
|
1,560 |
|
- |
|
- |
|
- |
|
9,741 |
|
Other |
|
109 |
|
203 |
|
(312) |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 December 2009 |
|
65,827 |
|
3,794 |
|
(4,932) |
|
- |
|
(43,724) |
|
20,965 |
Oil and gas interests at 30 June 2010 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 2010. Exploration and evaluation assets have been assessed for impairment having regard to the likelihood of further expenditures and ongoing appraisal for each geographical area.
6. Production and development assets
The movement on production and development assets which relate to oil and gas interests during the period was:
|
Cost |
|
Africa US$000 |
|
Total US$000 |
|
|
|
|
|
|
|
At 1 January 2009 |
|
- |
|
- |
|
|
|
|
|
|
|
Additions |
|
- |
|
- |
|
|
|
|
|
|
|
At 30 June 2009 |
|
- |
|
- |
|
|
|
|
|
|
|
Transfer from exploration and evaluation assets |
|
43,724 |
|
43,724 |
|
Additions |
|
34,565 |
|
34,565 |
|
|
|
|
|
|
|
At 31 December 2009 |
|
78,289 |
|
78,289 |
|
|
|
|
|
|
|
Additions |
|
9,512 |
|
9,512 |
|
|
|
|
|
|
|
At 30 June 2010 |
|
87,801 |
|
87,801 |
|
Accumulated depreciation |
|
Africa US$000 |
|
Total US$000 |
|
|
|
|
|
|
|
At 1 January 2009 |
|
- |
|
- |
|
|
|
|
|
|
|
Charge for financial period |
|
- |
|
- |
|
|
|
|
|
|
|
At 30 June 2009 |
|
- |
|
- |
|
|
|
|
|
|
|
Charge for financial period |
|
3,522 |
|
3,522 |
|
|
|
|
|
|
|
At 31 December 2009 |
|
3,522 |
|
3,522 |
|
|
|
|
|
|
|
Charge for financial period |
|
3,782 |
|
3,782 |
|
|
|
|
|
|
|
At 30 June 2010 |
|
7,304 |
|
7,304 |
|
Net book value
|
|
Africa US$000 |
|
Total US$000 |
|
|
|
|
|
|
|
At 30 June 2009 |
|
- |
|
- |
|
|
|
|
|
|
|
At 31 December 2009 |
|
74,767 |
|
74,767 |
|
|
|
|
|
|
|
At 30 June 2010 |
|
80,497 |
|
80,497 |
7. Finance costs
|
|
|
6 months to 30 June 2010 |
|
6 months to 30 June 2009 |
|
Year ended 31 December 2009 |
|
|
|
US$000 |
|
US$000 |
|
US$000 |
|
Interest payable: |
|
|
|
|
|
|
|
Convertible loan |
|
2,217 |
|
1,990 |
|
4,100 |
|
Capitalised to exploration and evaluation assets |
|
(10) |
|
(337) |
|
(144) |
|
Capitalised to production and development assets |
|
(178) |
|
- |
|
(1,016) |
|
Loss on fair value of conversion option |
|
755 |
|
12,223 |
|
10,225 |
|
Loss on fair value of additional option |
|
- |
|
844 |
|
100 |
|
|
|
|
|
|
|
|
|
|
|
2,784 |
|
14,720 |
|
13,265 |
Interest payable relating to the convertible loan includes interest paid of US$893,000 (H1 2009: US$907,000) and an effective interest expense (non-cash) of US$1.30 million (H1 2009: US$1.06 million) plus amortisation of transaction costs of US$28,000 (H1 2009: US$28,000).
The loss recorded on the conversion option relating to the convertible loan (non-cash) of US$755,000
(H1 2009: US$12.22 million) arose mainly as a result of the increase in the Company share price from £0.30 at 31 December 2009 to £0.33 at 30 June 2010.
8. Reconciliation of operating loss to net cash used by operations
|
|
|
6 months to 30 June 2010 |
|
6 months to 30 June 2009 |
|
Year ended 31 December 2009 |
|
|
|
US$000 |
|
US$000
|
|
US$000
|
|
Operating profit/(loss) |
|
4,599 |
|
(1,293) |
|
(344) |
|
Increase/(decrease) in trade and other payables |
|
12,721 |
|
(84) |
|
2,069 |
|
Increase in trade and other receivables |
|
(9,195) |
|
(3,023) |
|
(11,438) |
|
Increase in inventory |
|
(38) |
|
- |
|
(91) |
|
Write-off of exploration costs |
|
101 |
|
- |
|
4,932 |
|
Foreign exchange loss/(gain) |
|
312 |
|
(1,007) |
|
(1,034) |
|
Depreciation |
|
3,870 |
|
84 |
|
3,673 |
|
Share option expense |
|
559 |
|
987 |
|
1,496 |
|
|
|
|
|
|
|
|
|
Net cash generated/(used) by operations |
|
12,929 |
|
(4,336) |
|
(737) |
9. Post balance sheet event
On 3 August 2010, the Company announced the successful placing of 141,666,667 new ordinary shares at 30p per share to a number of institutional investors for gross proceeds of £42.50 million (US$65.0 million).
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) Rob Collins Chris Sim Neil Elliot
Fox-Davies Capital (+44 20 7936 5230) Daniel Fox-Davies
Philip Davies
David Porter
Citigate Dewe Rogerson (+44 20 7638 9571) Martin Jackson George Cazenove
Murray Consultants (+353 1 498 0320) Joe Murray Joe Heron
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, is the qualified person, as defined in the London Stock Exchange's Guidance Note for Mining and Oil and Gas companies, who has reviewed and approved the technical information contained in this announcement. Professor Green has, in certain instances, relied on primary information supplied by the operator in carrying out his review.
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 producing, low-risk near-term production and acreage with significant upside exploration potential. The Company listed on AIM in October 2004.
Internationally, the Company has continued to expand its portfolio over the past 2 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 offshore Block 52, the Company also has an ongoing exploration program in Block 49 onshore.
The Company's strategy is to locate and secure additional licenses in prospective hydrocarbon provinces and through targeted investment programmes, monetise the value in those assets for the benefit of shareholders. Circle may use its own expertise to appraise reserves and bring assets into production, generating sustained cash flow for further investment. In addition it may seek farm-outs to selected partners who would then invest in the exploration and continue through to the development of the assets for production.
Further information on Circle is available on its website at www.circleoil.net.
Related Shares:
Circle Oil Plc