Circle Oil

completed

Circle Oil Plc is incorporated in Ireland and listed on AIM. Circle Oil and its subsidiaries (“Circle Oil” or “the Company”) is a Middle East and Africa focused oil and gas exploration and production company with a portfolio of assets combining low-risk development, production, and exploration upside potential. References in this summary to “operated assets” are references to assets in respect of which Circle Oil has an ownership interest and has been appointed as operator; reference to non-operated assets are references to assets in which Circle Oil has an ownership interest but does not have the role of operatorOperated assets. In Morocco, Circle Oil has several exploration areas including Lalla Mimouna Nord and Sud permits, the Sebou and Oulad N’zala Permit. In the Sebou concession, Circle Oil has a 75% share and ONHYM has a 25% share. In the Oulad N’zala concession, Circle has a 60% share and ONHYM has a 40% share. Both concessions include the right of conversion to a production license of up to 25 years, plus extension in the event of commercial discoveries. The Lalla Mimouna permits are situated in the Rharb Basin and were awarded to Circle in January 2010. The Permits cover an area of over 2,211 sq kilometres and are a continuation of the same geology and similar exploration play to the adjacent Sebou Permit. Circle Oil also has exploration assets in Oman covering two blocks, Block 49 onshore in the south of Oman and Block 52 offshore well to the south of Masirah Island and extending offshore to the south past the town of Salalah. In both cases this acreage is at the seismic exploration stage and the Company is presently completing or interpreting seismic survey information. IFC’s financing will not include funding for these assets.Non-operated assets. Circle Oil has non-operating interests in several oil and gas blocks spread across Egypt and Tunisia. In Egypt, Circle Oil holds a 40% interest in the NW Gemsa concession, located in Egypt’s Eastern Desert. The NW Gemsa concession lies approximately 300 km southeast of Cairo, onshore in the prolific hydrocarbon province of the Gulf of Suez. The North West Gemsa concession, in addition to being an exploration permit, contains two producing development leases; the Al Amir and Geyad development leases. Circle Oil farmed into the NW Gemsa concession in 2008, acquiring a 40% interest in the license, with the operator, Vegas Oil and Gas currently holding 50% and Sea Dragon Energy holding 10%. Following the discovery of the Al Amir SE and Geyad oil fields in the Kareem sandstones, activity has been concentrated on appraisal, development and production. Six successful wells were drilled in 2011 and a further four wells are planned to be drilled from year end 2012 into 2013 with a further set of drilling planned for 2014. The Company has non-operated stakes in several early exploration assets in Tunisia, including a 36% share in the Grombalia permit in the Cap Bon region, a 23 % share in Ras Mamour permit, located close to the Ezzaouia and Robbana fields, and 70% in the offshore Mahdia permit. Exxoil Tunisie is the operator of these assets and Circle Oil’s operating partner in the Tunisian land permits.Development plans. The Company is embarking on an expansion program in order to (i) further develop its producing non-operated Egyptian assets; (ii) drill new exploration wells to increase reserves and tie into its existing pipeline in Morocco; (iii) accelerate exploration for oil and gas in Tunisia and Oman; and (iv) seek out and acquire new assets to further increase and expand the company.IFC is considering debt financing for Circle Oil to primarily fund the ongoing exploration, development and production of its operated assets in Morocco and non-operated assets in Egypt, along with part of the proceeds potentially funding company’s share of exploration and development funding of non-operated assets in Tunisia.