28th Jan 2005 07:00
Embargoed: 0700hrs 28 January 2005. Circle Oil Plc Circle Oil and China Shine H F sign major farm-in agreementCircle Oil Plc, through its wholly owned subsidiary First African OilCorporation, and China Shine H F are pleased to announce that the companieshave signed an agreement whereby China Shine will earn a 72% interest in CircleOil's Namibian licence. Circle Oil Plc currently holds a 90% interest in thislicence and NAMCOR, the National Petroleum Corporation of Namibia (Pty) Ltdholds the remaining 10%.To complete the earn-in China Shine must drill no less than three wells todepths of between 5,000 meters and 7,000 meters to test prospects delineatedduring previous exploration programmes and acquire no less than 3,000 linekilometres of 2D seismic data.The agreement is subject to a number of conditions precedent includingtechnical due diligence by China Shine and approval by the Namibian and ChineseGovernments.China Shine is estimating a budget of over US$1 billion for the Namibianproject and expects that the minimum earn-in commitment outlined above willcost approximately US$50 million. The additional funds will be spent onexploration, development and infrastructure upon successfully completing theinitial farm-in requirements.This agreement forms the cornerstone of a long term strategic alliance betweenCircle Oil Plc and China Shine with regard to oil and gas exploration anddevelopment in Namibia and other substantial areas currently under evaluationby Circle Oil Plc. The parties to this agreement acknowledge and recognise theassistance of Capital United Group in these negotiations.Commenting on the agreement:Mr John McKeon , Director of Business Development and Marketing, Circle OilPlc, said that "this agreement takes Circle Oil Plc into the next phase of itsdevelopment with a strategic financial and technical partner. It forms thebasis of a strong long term alliance with China Shine in the exploration ofCircle Oil's extensive 146,000sq.km. concession in Namibia. Furthermore, welook forward to working together to complete the drilling programme and assistthem in their long term plans for extensive oil and gas development."Mr David Hough, Chief Executive, Circle Oil Plc, added "Circle Oil is delightedwith this agreement, cementing a relationship with a major partner withfinancial and technical ability. The Company is confident that the project willdeliver long term growth and substantial shareholder value."Notes to editors:Circle Oil Plc is a public company listed on the AIM of the London StockExchange. The trading symbol is COP.L. The principal business is Oil and Gasexploration, development and production. Further information is available onits website: www.circleoil.comChina Shine HF is a Chinese government owned company that is involved in Oiland Gas exploration, production ,development and supply of oil field equipmentand is focussed on assisting China in its long term strategic economic goals.First African Oil Corporation is a wholly owned subsidiary of Circle Oil. Itwas set up in 2002 by Mr. Jack Keyes, Circle Oil's Chief Operating Officer. TheNamibian licence was awarded to it in 2003 and it was acquired by Circle inMarch 2004.Capital United is a resource advisory group with Asian focus and is primarilyinvolved in the supply of equipment for the Oil and Gas Industry.For further information please contact;David Hough, Chief Executive Officer, Circle Oil plcat: +353-87-240 2200 or +353-61-354831.John McKeon, Business Development Officer, Circle Oil plcat: +44-7767 262628.Jack Keyes, Chief Operating Officer, Circle Oil plcat: +1 281 920 0055.Ben Simons, Hansard Communications plcat: +44-207-245-1100.ENDRelated Shares:
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