Circle Oil Reports on 2008 Financial Results

Circle Oil has announced its financial results for the year ended December 31, 2008.


On the financial front and in order to pay for its aggressive exploration program Circle successfully carried out a private placing last September which raised £33 million (US $58 million). The principal participants in this funding were Libya Oil Holdings, a wholly owned subsidiary of Libya Africa Investment Portfolio, who now hold a 28.72% interest in Circle and Kaupthing Bank HF of Iceland who hold a 15.12% interest in the Company.

The Group recorded a loss of US $10.7 million in 2008 (US $2.7 for 2007). Pre-license costs amounting to US $3.5 million in relation to the Mahdia license were expensed. A foreign exchange loss of US $8.9 million was recorded due to the weakening of sterling versus the US dollar. This position has now been cancelled out with a foreign exchange gain recorded in the early part of 2009. Finance revenue amounted to US $8.5 million which related to a gain of US $7.5 million on derivative financial instruments and interest income of US $1.0 million. Net finance costs for the year amounted to US $2.8 million and comprised actual interest expense of US $1.8 million and effective interest of US $1.9 million (both relating to the convertible loan) less US $0.9 million of interest capitalized to various projects.

Cash and cash equivalents at December 31, 2008 were US $32.7 million. Total assets for the Group at year-end were almost US $100 million.


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