Wednesday 28 September 2016

Circle Oil "considering all options" after launching strategic review

Published 15/03/2016 | 09:50

Circle Oil is focused on exploration in the Middle East, and has offices in the UK, Tunisia, Morocco, Egypt and Oman. Photo: Getty Images/iStockphoto
Circle Oil is focused on exploration in the Middle East, and has offices in the UK, Tunisia, Morocco, Egypt and Oman. Photo: Getty Images/iStockphoto

Cork-based oil gas and exploration company Circle Oil is considering all options, including the sale of the business, as part of a strategic review to maximise value for shareholders.

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In an update released to shareholders this morning the firm announced it had initiated a formal strategic review of both Circle's business and assets.

The company is looking to ensure it has significant cash flow to continue future operations.

Circle also announced that it has reached an agreement with its main lending institution, International Finance Corporation (IFC), to suspend the redetermination of its reserve based lending until April 15.

Circle chief executive Mitch Flegg said the waiver reached between the company and its lender came as a welcome development.

"Circle has excellent assets across our regions of operation and our aim, mindful of the sustained low oil price environment and the company’s stressed financial position is to maximise the value from these assets for the benefit of all stakeholders”

The firm's board has appointed Investec to act as a financial advisor to the company for its review.

Circle has also said that IFC has indicated its willingness to consider further waivers as the review process continues.

In February Circle announced that its cash flows and financial position remains under significant pressure due to the uncertainty and irregularity of receipts from the Egypt General Petroleum Corporation.

Under the review Circle will consider various options to ensure the funding of future operations including the sale of one or more of the company's assets, a merger or the sale of the entire issued share capital.

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