Circle Oil plc announces the signing of an unsecured Convertible Loan agreement in the sum of US$30 million with Kuwait-based, KGL Petroleum Company. The loan also has an attached option whereby the loan provider can subscribe for an additional 15 million shares in Circle Oil at a price of £0.50 per share exercisable during the first 3 years of the loan.
The signing of this agreement forms part of Circle’s three year funding strategy to cover its work programme including the development costs of commercial discoveries. The Company is committed to drilling a minimum of 9 wells on its Moroccan and Tunisian Licences up to the middle of 2009 together with all ancillary seismic and technical studies.
The Convertible Loan is for a period of 5 years, is convertible into ordinary shares of the Company at an exercise price of £0.25 per share and carries a 6% coupon. The contract was signed on 08 June 2007 by Circle Oil plc and a wholly owned Luxembourg registered subsidiary of KGL Petroleum.
Circle is currently finalizing the participation of a number of additional institutional investors and banks in this financing, further announcements on which will be made in due course.
David Hough, CEO Circle Oil, commenting on this signing said:
“I am delighted that KGL Petroleum has joined with us in pursuit of our aggressive exploration and development programme planned for the coming period. We are also jointly examining working together on a number of other projects which will combine the experience, capabilities and network of both Circle and the KGL Group.”
Mohammed Sultan, Managing Director of KGL Petroleum, said:
“After examining a number of possible partners in this sector we are delighted to have concluded this agreement with Circle Oil. We look forward to the future as Circle Oil develops into a successful exploration and production company complementing our other activities in KGL Petroleum.”
KGL Petroleum
KGL Petroleum operates within the energy sector with a primary focus on oil and gas operations and petroleum related products. The core of KGL Petroleum’s strategy is to get direct access to oil & gas resources through investments in the upstream, midstream and downstream sectors which will create the foundation for other complementary businesses within KGL. KGL Petroleum is one of the fastest growing company’s in the Middle East region and is aiming to be a leader in the energy sector both locally and globally, and to be benchmarked with the best worldwide oil and gas companies.