Circle's reconnaissance license in Namibia, originally acquired in March 2004, has been converted into an exploration license. This new exploration license covers an area of 140,000 square kilometers, the remainder of the original license having been relinquished because it encompassed the Etosha National Game Reserve. The terms of the new license include a commitment to acquire seismic and to drill a well over a 4 year period after which the license can be extended. The Company is about to open a local office in Namibia and will begin work on the ground later this quarter.
Discussions with China Shine in regard to the farmout agreement signed on 22 January 2005 continue, although the period of exclusivity granted to China Shine ended in September 2005. Circle has begun discussions with other industry partners who have expressed interest in this large exploration area. Negotiations have commenced with seismic contractors to conduct 2D seismic surveys over a number of targets in the area. The Environmental Impact Study contract has been awarded to a local contractor and this contract will commence within the next month.
During 2005, Circle signed Exploration and Production Sharing Agreements ("EPSA") covering two significant licenses in Oman. The onshore Block 49 license and offshore Block 52 license cover a combined 115,000 square kilometers, make Circle one of Oman's largest license holders by area. An Environmental Impact Study of Block 49 will begin shortly while an extensive seismic survey of Block 52 is being prepared. The licenses are managed out of the Circle's Houston office, however, the Company has recruited a country manager and is opening an office in Muscat. Circle will commence the aerogravity/aeromagnetic survey on Block 49 within 2 months and bids have been received for the offshore seismic studies on Block 52 from a number of contractors.
In late November 2005, Circle was granted a prospecting permit over Block A in the south-western Caribbean covering 30,000 square kilometers in the Panamanian waters 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 hydrocarbon sources which enhances the prospectivity of the block. The Company is currently gathering all existing data available on the area and a number of seismic lines are being reprocessed and reinterpreted using the latest technology.
Circle has entered into discussions with another oil company with a view to an agreement whereby the Company, in return for a reduced equity stake in the block, will recover its historic costs and future costs will be shared pro-rata for the proposed exploration program.
Circle is currently focusing on exploration and development opportunities available in the Middle East and is assessing a number of potential acquisitions in the region.
Having raised £10 million in August 2005 the net cash position at the year end was approximately US$17.2 million which the Company considers to be sufficient to 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 as its Chief Financial Officer with immediate effect. Mr. McMorrow has been involved in all financial aspects of publicly quoted companies in Ireland, UK and North America. He brings a significant level of knowledge and experience to Circle in the areas of fund raising, project financing and financial and stock exchange reporting. Prior to joining Circle he was Chief Financial Officer of Ivernia Inc, a Toronto based international base-metals mining and exploration company.
David Hough, Chief Executive of Circle, said:
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