Circle agrees credit facility

Circle Oil has agreed a $12.5 million secured working capital facility, releasing some of the capital tied up in its Egypt operations.

The oil and gas exploration firm, which is focused on the Middle East and Africa, agreed the facility on a two-year term with Ahli United Bank Egypt. The company said it would be used to fund ongoing expenditures in respect of Circle's 40 per cent interest in the North West Gemsa Concession in Egypt.

Circle currently has cash balances of $20.5 million.

"This facility provides additional working capital for our Egyptian assets and is recognition of the quality of our producing assets in that country," Circle chief executive Professor Chris Green said. "The facility augments already robust current cash balances and will release additional capital for investment across the group's area of operations as we develop senior debt options to accelerate company growth."

Analysts said the announcement was strategically important for the firm, as it recognised the value of the assets in the area and strengthened the firm's liquidity position.