<article><p class="lead">Shares in London-listed independent Circle Oil have been suspended from trading on the AIM market, as a restructuring process looks likely to result in shareholders being wiped out. The company will need to renegotiate existing funding arrangements or obtain additional funding in July in order to meet continuing cash requirements.</p><p>Circle, which has production assets in Egypt and Morocco, implemented <a href="https://direct.argusmedia.com/newsandanalysis/article/1205000">a review of its business</a> in March because its financial position had been pressured by <a href="https://direct.argusmedia.com/newsandanalysis/article/1239570">unreliable payments</a> from Egypt's state-owned EGPC. Options on the table include the sale of one or more of its assets, a merger or sale of the company or a capital raising.</p><p>Circle said today that payment frequency and amounts received from EGPC have declined significantly this year. "Taking into account the company's outstanding debt position… and based on the current status of the proposals received to date, the directors believe it is likely there will be no value attributed to Circle equity holders," the company said.</p><p>Circle has a 40pc stake in the Al-Amir and Geyad permits in Egypt. Output there averaged around 9,000 b/d of oil equivalent (boe/d) in 2015, of which around 3,500 boe/d was net to Circle. The parlous nature of payments for Egyptian production has forced Circle to increasingly rely on money generated by its Moroccan operations. Production in Morocco averaged 4.39mn ft³/d (45mn m³/yr) net to Circle in 2015.</p><p>The company's revenues fell to $38.9mn in 2015 from $84.6mn in 2014 as the average oil price, Circle's share of liftings in Egypt and the Moroccan dirham's exchange rate against the US dollar all fell. The company's loss more than doubled, to $120.3mn from $53.9mn in 2014.</p></article>
