Malcolm Graham-Wood was joined by the CEO of Circle Oil PLC, Mitchell Flegg, on the Tip TV Finance Show to discuss the re-organisation and the development of the Oil firm into a profitable company across all exploration, appraisal and production.
What bought the CEO to the company?
Flegg highlighted the world class set of assets and the balance between exploration, appraisal and production as the key reasons for joining Circle Oil PLC. He continued that having both oil and gas production was also important, with gas in Morocco, oil in Egypt and also exciting exploration going on in Tunisia.
A lot of attention for Morocco
Flegg outlined that although Morocco is not the most important area for their company, there has been a lot of attention placed there for gas. In the past, he commented that the production was left to look after itself while exploration took the forefront, thus more recent focus has been on regaining operational efficiency to become a cost effective producer. He continued that they have a 55km pipeline which enables gas to be sold to industrial users, where they achieve a price over $8 versus the cost price at around $0.65. He concluded that operational excellence is now the goal, with costs down more than 30% already.
Egypt a different mind-set
Flegg continued to Egypt, where he expressed that they are not the main operator, but have a 40% interest in the field which enables a certain amount of influence over the operator. However, he also highlighted that the field is naturally declining and is past its peak production levels, so now the focus is on maintaining production and protecting resources. On the oil market as a whole, Flegg believed that there is political risk across the majority of oil mines, and Egypt isn’t the only country facing this risk. He finished by noting that there are no security threats over ongoing operations, and that there is also lots of good will towards Egypt from the investment community.
Future drilling in Tunisia promising
Flegg made it clear that Tunisia is pure exploration, and that Circle Oil PLC needs to go back and appraise that discovery. Following that, Flegg commented the target is to get industry backing in order to take this Tunisia venture further.
Results and the future for Circle Oil PLC
The interim results for the firm were released around a month ago, and showed a mid-year cash position of $17 million, with assets now profitable and Circle now adding to the cash pile. He finished by outlining that budgets are set, and Circle Oil PLC plans to sell more gas in Morocco, develop the Tunisia prospect further and continue to follow up opportunities within the countries which they are already based.