Circle Oil (COP) returned to profit at the half-year mark after write-downs linked to an unsuccessful drilling programme in Oman and falling crude prices sent earnings into the red in 2014. Circle, which owns oil and gas assets in the Middle East and Africa, posted operating profits of $5.45m (£3.59m) - down from $12.3m in the corresponding period in 2014. That's hardly surprising given the trajectory of crude prices and a fall-away in production from its Egyptian assets.
The Omani programme and separate exploration drilling in Tunisia ate into Circle's cash resources through the period, but management's determination to rein in costs enabled Circle to generate $17.8m in net cashflows. Progress on the cost front is also reflected in a gross margin of 43.4 per cent, up from 34.3 per cent a year earlier. And Circle managed to reduce trade receivables by nearly a half, partly due to a step-up in the payment schedule from the Egyptian General Petroleum Company.
Investec predicts an earnings loss of 0.1¢ for the 2015 full year, against a loss of 9.56¢ last year. The broker expects the company to swing into profit with EPS of 3.1¢ in 2016.
| CIRCLE OIL (COP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 4.6p | MARKET VALUE: | £26m | |
| TOUCH: | 4.5-4.8p | 12-MONTH HIGH: | 24p | LOW: 4.6p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 35¢ | NET DEBT: | 33% | |
| Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014 | 47.8 | 9.4 | 1.7 | nil |
| 2015 | 22.3 | 2.8 | 0.5 | nil |
| % change | -53 | -70 | -71 | - |
| £1 = $1.52 | ||||
