Profit at Circle Oil declines 36% despite rising revenues

Revenue at Limerick-based Circle Oil increased by 13 per cent to $47.8 million in the first half of the year, but profit fell, primarily due to rising administrative costs.

Circle said revenues were up on the back of an 11 per cent increase in the volume of oil sold in Egypt with a similar increase in sales of gas in Morocco.

Profit at the oil and gas exploration company, which operates in North Africa and the Middle East, declined by 36 per cent, from $14.7 million in the first half of 2013, to $9.4 million in the six months to the end of June.

Net financing costs increased by almost $1 million due mainly to expenditure associated with putting in place the senior debt facility of up to US$100 million.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) amounted to $22.6 million, while operating profit was $12.3 million.

Circle said recently completed operations offshore Tunisia and forthcoming operations in both Oman and onshore Tunisia have the potential to further enhance the company’s asset base.

The explorer's chief executive Chris Green said oil production in Egypt continues on a solid footing and Moroccan gas production now contributes increasingly to Circle's revenues.

“An exciting period is ahead with the second half of the year including new drilling in both Morocco and onshore Oman,” he added.

The company said it is now drilling its second well, of twelve, in Morocco.