Circle Oil, the London-based independent with modest North Africa oil and gas production, last month blamed its tight cash flow and financial pressure on the ongoing “uncertainty and irregularity of US dollar receipts" from state-owned Egyptian General Petroleum Corporation (EGPC).
On March 15, however, it had some positive news. Negotiations with the World Bank’s International Finance Corporation (IFC) on suspending a redetermination by December 2015 of its Reserve Based Lending had been postponed, said Circle, “until 15 April 2016, with any repayments required under the RBL facility, which is currently drawn to $57.5 million, being postponed until that date.”
IFC had further, said Circle, indicated its willingness to consider further waivers as may be required while the company’s strategic review, led by the UK bank Investec, continues. Options for that include sale of one or more assets, a merger, raising fresh capital, or an outright sale of Circle.
Total debt had reached $77.5mn, with a further $14.1mn of trade creditors, and Circle said that it “remains reliant on extracting US dollars from its Moroccan operations to satisfy creditors and fund operations.” But it was shielded from falling commodity prices in Morocco due to its fixed price contracts there, with the average price realised in 2015 at over $8.50 per Mft3. Gas sales from its Sebou permit onshore Morocco in 2015 averaged 5.85mn ft3 gross, 75% net to Circle, using less than half the available pipeline capacity.
Circle had previously said that in the first half 2015, its average realised Moroccan gas price was $8.66 per Mft3 and its operating costs only $0.65 per Mft3.
In Egypt, Circle said on March 15 that 11 wells in the Al Amir SE field (AASE) and 3 wells in the Geyad field were on production, with a combined average gross production rate of 8,871 boe/d in 2015. Two more wells, AASE-23 and -24 were brought onstream last month.
Mark Smedley
SOURCE
