LONDON (ShareCast) - Middle East and Africa-focused oil and gas production company Circle Oil (Other OTC: CIOMF - news) has agreed a 12.5m dollar secured working capital facility with Ahli United Bank Egypt.
Circle, which currently has cash balances of $20.50m, said the facility would be used to fund ongoing expenditures in respect of its 40% interest in the North West Gemsa Concession in Egypt enabling it to use its available cash balances for alternative projects.
The facility has a term of two years and is secured primarily on certain of Circle's receivables from the Egyptian General Petroleum Company to which it sells its production from the North West Gemsa concession.
The facility attracts interest at a rate of LIBOR plus 4.25%. Under the terms of the facility, Circle has the right to drawdown up to the principal sum to fund on-going expenditures in North West Gemsa, and at its option, may pre-pay any outstanding amount with accrued interest, subject to minimum repayment amounts of $1m.
Commenting on the facility, Professor Chris Green, Chief Executive Officer of Circle Oil, said:"This facility provides additional working capital for our Egyptian assets and is recognition of the quality of our producing assets in that country. 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".
Circle Oil's share price was up 0.80% to 15.75p at 08:35 on Thursday morning.