Circle Oil plc announced Monday that it is considering a number of options, including debt restructuring, to ensure that the company has sufficient cash flows to fund operations.
The news follows Circle’s interim results, released in September, which noted that the energy firm had reached an agreement in principle with International Finance Corporation to extend its Reserve Based Lending facility by one year to June 2019. Since that date, discussions have continued with a view to finalizing the relevant documentation with IFC. However, to date, although progress is being made, the process has not progressed as quickly as envisaged, according to a Circle Oil statement. Despite its “low cost operations”, Circle stated that its trading remains “very challenging” due to a further weakening of global oil prices, varying production levels in NW Gemsa and the impact of macro events on payments from EGPC.
Following the completion of a drilling campaign in Morocco, Circle’s subsurface team is currently in the process of reviewing well data from the campaign. The final two wells in the program have now been tied back to Circle’s existing production infrastructure and commenced production Dec. 9. The company intends to recommence drilling in Morocco in the fourth quarter of next year. In Egypt, Circle’s workover campaign, aimed at managing the NW Gemsa field as it matures, is nearing completion and in Tunisia, the farm-out process for the company’s Mahdia permit is ongoing.
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