3rd Feb 2006 07:00
Circle Oil PLC03 February 2006 03 February 2006 CIRCLE OIL PLC ("Circle" or the "Company") OPERATING UPDATE Circle Oil plc (AIM: COP), the oil & gas exploration and development group,today issues this Operating Update. The Operating Update is in advance of theCompany's Preliminary Results for the year ended 31 December 2005, which areexpected to be released in May 2006. The information contained herein has notbeen audited and is subject to further review. Namibia Circle's reconnaissance licence in Namibia, originally acquired in March 2004,has been converted into an exploration licence. This new exploration licencecovers an area of 140,000 square kilometres, the remainder of the originallicence having been relinquished because it encompassed the Etosha National GameReserve. The terms of the new licence include a commitment to acquire seismicand to drill a well over a 4 year period after which the licence can beextended. The Company is about to open a local office in Namibia and will beginwork on the ground later this quarter. Discussions with China Shine in regard to the farmout agreement signed on 22January 2005 continue, although the period of exclusivity granted to China Shineended in September 2005. Circle has begun discussions with other industrypartners who have expressed interest in this large exploration area.Negotiations have commenced with seismic contractors to conduct 2D seismicsurveys over a number of targets in the area. The Environmental Impact Studycontract has been awarded to a local contractor and this contract will commencewithin the next month. Oman During 2005, Circle signed Exploration and Production Sharing Agreements ("EPSA") covering two significant licences in Oman. The onshore Block 49 licence andoffshore Block 52 licence cover a combined 115,000 square kilometres, makeCircle one of Oman's largest licence holders by area. An Environmental ImpactStudy of Block 49 will begin shortly while an extensive seismic survey of Block52 is being prepared. The licences are managed out of the Circle's Houstonoffice, however, the Company has recruited a country manager and is opening anoffice in Muscat. Circle will commence the aerogravity/aeromagnetic survey onBlock 49 within 2 months and bids have been received for the offshore seismicstudies on Block 52 from a number of contractors. Panama In late November 2005, Circle was granted a prospecting permit over Block A inthe south-western Caribbean covering 30,000 square kilometres in the Panamanianwaters of the Colombia Basin, one of the major basins in the Caribbean Plate.There is already evidence in the area to suggest the existence of hydrocarbonsources which enhances the prospectivity of the block. The Company is currentlygathering all existing data available on the area and a number of seismic linesare being reprocessed and reinterpreted using the latest technology. Circle has entered into discussions with another oil company with a view to anagreement whereby the Company, in return for a reduced equity stake in theblock, will recover its historic costs and future costs will be shared pro-ratafor the proposed exploration programme. Other areas Circle is currently focussing on exploration and development opportunitiesavailable in the Middle East and is assessing a number of potential acquisitionsin the region. Financial Having raised £10 million in August 2005 the net cash position at the year endwas approximately US$17.2 million which the Company considers to be sufficientto cover its ongoing expenditure requirements and obligations. Appointment of Chief Financial Officer The Board is pleased to announce the appointment of Mr. Brendan McMorrow FCCA asits Chief Financial Officer with immediate effect. Mr. McMorrow has beeninvolved in all financial aspects of publicly quoted companies in Ireland, UKand North America. He brings a significant level of knowledge and experience toCircle in the areas of fund raising, project financing and financial and stockexchange reporting. Prior to joining Circle he was Chief Financial Officer ofIvernia Inc, a Toronto based international base-metals mining and explorationcompany. David Hough, Chief Executive of Circle, said: "I am pleased with Circle's progress during a year in which we have becomeestablished in some highly prospective hydrocarbon regions. The year ahead alsolooks promising, with a number of exciting opportunities emerging, in particularfrom the Middle East." Enquiries Circle Oil plc David Hough, CEO (+353 61 319 366) John McKeon, Business Development Director (+ 44 20 7758 2680) Citigate Dewe Rogerson (+44 20 7638 9571) Media: Martin Jackson / George Cazenove Analysts: Nina Soon Notes to editors Circle Oil plc (COP:LN) is an oil & gas exploration, development and productioncompany with an attractive portfolio of assets in Namibia, Oman and Panama. TheCompany's strategy is to locate and secure licences in new hydrocarbon provinceswith the objective of bringing these licences up to farm-out status throughminimal work programmes. The Company may then negotiate joint ventures orsimilar arrangements with other companies involved in oil and gas developmentand production to facilitate significant work programmes with a view to limitingthe Company's direct financial outlay to the extent practicable whilstmaximizing potential returns. At the same time, Circle intends to activelypursue the acquisition of medium sized hydrocarbon reserves and resources whichthe Company believes, with its technical expertise, could be developed orupgraded within its financial capacity or in partnership with others. Thecompany listed on AIM in October 2004. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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