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					                      Circle Oil                 (COP)                                                                               BUY
                                                                                                                    Update from March 11 2009

                                                                                                                                      10 July 2009

     Current Price:            £0.31                Market Cap (M):                     £106.2
     12 month target:          £0.72                EV (M):                             £87.7                             Oil & Gas
     Quality assets delivering value




 GBp
40
                                                 Summary
                                                 We have raised our target price on Circle Oil from £0.62 to £0.72, a 130%
                                                 upside to current share price.
30

                                                 Circle Oil is an oil and gas exploration and production company with assets
                                                 in Egypt, Morocco, Tunisia, Oman and Namibia. An exceptional exploration
20                                               success rate of 9 discoveries out of 11 wells drilled in Morocco and Egypt in
                                                 the past few months has confirmed the reserves and production outlook of
                                                 the company and has helped the stock to close some of the valuation gap
                                                 towards our previous £0.62 target price.
10
Mar-09      Apr-09    May-09   Jun-09   Jul-09   We have now revised our valuation model to reflect the de-risking of the
                                                 exploration plays in Egypt and Morocco as well as our revised assessment of
Key Metrics
                                                 the potential of acreages in Tunisia. The resulting estimate of the Net Asset
Shares Outstanding (M):                348.2
                                                 Value of the company is close to £0.80 per share, while a public market
Current Price (GBP):                   £0.31
                                                 valuation using a US$ per barrel metric results in a value of £0.65. The revised
52-week Change:                   £0.11-0.36
                                                 risked recoverable resources estimate stands at 72.4MMboe, or 245MMboe
Net Risked Recoverable
                                                 un-risked.
Resources (MMboe):                      72.4

                                                 We have therefore raised our target price from £0.62 to £0.72 and reiterate
                                                 our Buy recommendation, based on the remaining valuation upside as well
                                                 as the quality of the company’s assets and management.

                                                 Share price catalysts in the next 12 months include first and foremost the
                                                 continuing appraisal and development drilling in Egypt but also the start of
                                                 the second drilling campaign in Morocco planned before end 2009, the
                                                 firming-up of the prospects inventory in the Mahdia licence early 2010 and
Contact                                          finally the drilling of an onshore well in Tunisia mid 2010.
Lionel Therond
+44 (0)20 7936 5244
Lionel.Therond@fdcap.com



                                                 Disclaimer
                                                 This is a marketing communication. It has not been prepared in accordance with legal requirements
                                                 designed to promote the independence of investment research and is not subject to any prohibition on
                                                 dealing ahead of the dissemination of investment research. Non-US research analysts who have
                                                 prepared this report are not registered/qualified as research analysts with FINRA, may not be
                                                 associated persons of the member organisation and may not be subject to NASD/NYSE restrictions on
                                                 communications with a subject company, public appearances and trading securities held by a research
                                                 analyst account.
 Circle Oil



Background
Circle Oil was incorporated in September 2003 and listed on AIM in October 2004. Over the last four years the
company has amassed a geographically diverse portfolio of assets, expanding from Oman to North Africa and
Namibia. Most recently, the company has entered into a different phase of development with the acquisition of
acreage in Tunisia, Morocco and Egypt and the completion of a farm-out in Namibia on attractive terms. The
company has also secured a significant shareholder in Libya Oil Holdings. The purpose of this note is to provide a
revised valuation of the company and an update on the assets. The Investment Case and Recommendation are
presented below while operational and valuation details follow thereafter.

Investment Case
Since FDC initiation at a target price of 62p the stock has rallied from 18.5p to 32p, closing some of the valuation
gap. However, a string of new discoveries in both Morocco and Egypt has confirmed the reserves and production
outlook of the company that were forecast at the time, de-risking some of the upside. Following those discoveries
and our assessment of the remaining potential of the portfolio in Morocco and Egypt, we have updated our
production forecasts and resources estimates. Production is projected to ramp up from 1,600boed to a peak of
6,600boed net to Circle Oil in 2013 (Exhibit 2) while current risked recoverable resources, including the assets in
Tunisia, stand at 72.4MMboe (Exhibit 3) or 245MMboe un-risked.

The exploration track record of the current management and technical teams bodes well to uncover the remaining
exploration potential of the existing licences. It also provides great confidence in their ability to acquire new
attractive acreage in the future. In particular, Circle Oil is focussed on increasing their exploration acreage in low
cost, fiscally attractive and politically stable areas. The company is also actively looking to acquire P1 reserves and
we understand it is currently involved in a number of negotiations.

We have revised our valuation model and our estimate of the Net Asset Value (NAV) of the company is 79.9p per
share (Exhibit 4). It is based on a DCF valuation of the Moroccan and Egyptian assets, while the estimated values of
the Tunisian licences are based on private market transactions for similar assets. Due to the early stage of
exploration in Oman and Namibia, no value has been included for these licences. We have calibrated this NAV with
a Public Market valuation, using an EV/2P reserves metric and our estimate of risked net recoverable resources. The
average EV/2P value for the whole of the AIM Oil&Gas Index is US$4.5/b, while it is US$6.9 for a subset of
companies comparable to Circle Oil. The resulting valuation range is 49.5-80.7p with an average of 65.1p.

Recommendation
We are raising our price target for the Circle Oil stock from 62p to 72p per share to reflect the de-risking of some of
the exploration plays in Egypt and Morocco as well as our revised assessment of the potential of acreages in
Tunisia.

We reiterate our Buy recommendation given the valuation upside as well as the quality of the assets and of the
exploration team. Share price catalysts in the next 12 months include first and foremost the continuing appraisal
and development drilling in Egypt, the start of the second drilling campaign in Morocco planned before end 2009,
the firming-up of the prospects inventory in the Mahdia licence early 2010 and finally the drilling of an onshore well
in Tunisia mid 2010.




 10 July 2009                                                                                                         Page 2
 Circle Oil



Timeline
We have summarised the work programme that the company intends to carry out this year and next in Exhibit 1
below, together with the expected potentially material news flow items. It illustrates the catalysts that might have
an impact on share price development over the next 12-18 months. We have identified (i) the continuing appraisal
and development drilling in the NW Gemsa permit in Egypt(1), (ii) the start of the second drilling campaign in
Morocco, (iii) the completion of interpretation of the 2D seismic in Mahdia and the resulting firming-up of the
prospects inventory, and (iv) the drilling of one onshore well in Tunisia, in either Ras Marmour or Grombalia.

Exhibit 1: Planned work programme

   Madhia 2D acquisition                        Start of 3D seismic        Start of land seismic       Mahdia seismic                Oman Block 49          Oman Block 49
   completed                                    Oman Block 49              in Tunisia                  interpretation completed      processing             interpretation




                          2009                                                                             2010

                          Q1                    Q2                 Q3                Q4                    Q1             Q2                Q3                Q4




   Start of Al Amir                              Start of Geyad                     Start of Phase II Moroccan drilling                     Start drilling of onshore well
   production                                    production                         (6 wells, up to end Q3 2010)                            in Tunisia

(1) not represented graphically                                                                                                Source: Circle Oil, FDC



Production
The anticipated production profile, based on the Moroccan and Egyptian assets, is shown in Exhibit 2. It
incorporates the recent discoveries in both regions, labelled “Core” production, as well as our assessment of the
remaining exploration and appraisal potential in both regions, labelled “Upside” production. These production
projections are net to Circle and un-risked although we have used appropriate levels of risks to value the
corresponding assets. In our Net Asset Value, we have also included other parts of the portfolio, namely the
Tunisian assets; however, the production associated with these additional assets is not reflected in the production
profile below.

Exhibit 2: Anticipated production profile

            10.0
    mboed




             5.0




             0.0
                   2009                                   2014                               2019

                                 Morocco core     Morocco upside   Egypt core   Egypt gas   Egypt upside
                                                                                                                               Source: Circle Oil, FDC

Please note also that a small amount of gas is produced from existing discoveries in the NW Gemsa licence in
Egypt; currently this gas is being flared and therefore has no value.



 10 July 2009                                                                                                                                                                Page 3
 Circle Oil



Resources
Risked net recoverable resources, including existing discoveries, amount to 72.4MMboe. As for Production, in the
paragraph above, we have distinguished between “Core” and “Upside” for assets in Morocco and Egypt; we have
used a 100% probability of success (PoS) for Core resources and 67% for Upside resources. For licences in Tunisia
we have used a 20% PoS for Mahdia, 20% for Ras Marmour and 15% for Grombalia. We have not attributed any
reserves to either Namibia or Oman due to the early stage of exploration and low prospects definition in those
blocks, pending future 2D and 3D (Oman Block 49) seismic interpretation.

Exhibit 3: Risked Recoverable Resources




                                                                         37.1                             72.4
     Risked Resources (mmboe)




                                                                5.5
                                                       14.3



                                             11.2


                                     4.3



                                   Morocco   Egypt   Morocco   Egypt    Tunisia   Namibia    Oman         Total
                                    Core     Core     Upside   Upside
                                                                                                                     Source: Circle Oil, FDC


Valuation
The revised risked valuation of Circle Oil is 79.9p per share (Exhibit 4). It is based on a DCF valuation of assets in
Morocco and Egypt, while we valued the assets in Tunisia using private transactions for similar acreages. The
exploration permits in Namibia and Oman are not included in our NAV as there are no attributed resources.

Exhibit 4: Net Asset Value


                                                                        30.0p


                                                                                                          79.9p
                                                                                               -9p
   Net Asset Value (p per share)




                                                               10.1p


                                                      14.6p




                                             21.0p




                                    13.2p




                                   Morocco   Egypt   Morocco   Egypt    Tunisia   Namibia   Corporate   Net A sset
                                    Core     Core     Upside   Upside              Oman       Costs       V alue
                                                                                                                     Source: FDC




 10 July 2009                                                                                                                                  Page 4
 Circle Oil



We have calibrated the risked-valuation above with an estimate of Public Market valuation based on an EV/2P
reserves metric. The value of EV/2P for the whole AIM Oil and Gas Index is US$4.5/b, while it is US$6.9/b for a
subset of companies comparable to Circle Oil (Exhibit 5). Applying those values to the risked net recoverable
resources above, results in a Private Market value range of 49.5-80.7p with an average of 65.1p.

Exhibit 5: EV/2P for comparable companies
                                                                                                 EV        2P reserves    EV / 2P
  Company                                                   Country             Exchange       (US$m)       (MMboe)      reserves
  Centurion Energy (acquired Jan 2007)      Egypt, Morocco, Nigeria                TSX          1015            97             10.5
  Gulfsands                                 Syria, USA                             AIM           337            34             10.0
  Emerald Energy                            Syria, Columbia                        LSE           448            57              7.9
  Melrose Resources                         Egypt, Bulgaria, USA                   LSE           485            67              7.3
  Tanganyika Oil (acquired Dec 2008)        Syria                                  TSX          1217           328              3.7
  Winstar                                   Tunisia, Canada, Hungary, Romania      TSX            42            18              2.3
  Circle Oil                                Egypt, Morocco, Tunisia               AIM            88           72 **             1.2


              *
  Median                                                                                         466            62              7.9
  Mean *                                                                                         591           100              6.9

  * excluding Circle Oil                                                                   Source: Bloomberg, FDC
  ** net risked recoverable resources


We have therefore set our price target at 72p per share, which is the average between the risked NAV and our
assessment of Private Market valuation. This is a 16% increase from the previous FDC price target of 62p; it is a
reflection of the de-risking of the exploration plays in Morocco and Egypt after the excellent exploration drilling
success recently and also of our assessment of remaining exploration potential across the portfolio, mainly in
Tunisia at this stage.

More details on individual assets are provided in the following, together with their contribution to the overall
valuation.

Appendix 1 thereafter provides a valuation summary for the assets in Morocco, Egypt and Tunisia, whereas the
recent news flow is listed in Appendix 2.




 10 July 2009                                                                                                                         Page 5
 Circle Oil



Morocco
Circle Oil operates the Sebou and Oulad N’Zala permits in the Rharb basin (Exhibit 6), with interests of 75% and
60% respectively and ONYM, the Moroccan National Oil Company, as partner.

Five of the six wells drilled so far in the Sebou licence, as part of a six well drilling programme, have discovered gas
whilst the sixth well DRJ-6 encountered good gas indications and will be tested at a later stage. Those are shallow
wells typically between 500-1500m depth and planned on a very high quality 3D seismic dataset. The discoveries
each tested between 3.3-12.5MMscfd from various pay zones.

A second phase of drilling is currently planned to start before the end of 2009 and will last for about a year. Those
six wells will test a number of prospects similar to the recent discoveries, i.e. well defined seismic anomalies, and
have therefore a high chance of success, in our view.

The company will lay a 12km 6” pipeline, at a cost of US$3.0m, to transport the gas to neighbouring industrial
customers, feeding a growing market for natural gas. The customers list is likely to grow significantly as additional
gas capacity is brought on-stream that can efficiently fulfil current energy requirements at a lower price than current
supply. Current gas price is US$7/mscf.

Exhibit 6: Sebou and Oulad N’zala permits location map




                                                                                  Source: Circle Oil



In the valuation, we have distinguished between “Core” and “Upside”. Core is the value of existing discoveries
while Upside is the additional value that might be provided by forthcoming drilling success. The company believes
that it needs a success ratio of 1/3 from the forthcoming drilling campaign for the Upside production level used in
the valuation model to be reached. We are confident that, given the recent track record and the good prospect
definition, a higher probability can be assigned and therefore we have used 2/3, which is lower than recent success
ratio of 5/6.

Net core production in 2010 is expected to reach some 2.6MMscfd and peak three years later in excess of
10MMscfd or 1,320boed, with a plateau at that level until 2015 before declining. The Upside production continues




 10 July 2009                                                                                                          Page 6
 Circle Oil



that peak plateau, through new drilling, until all the existing discoveries and the identified prospects have been
produced. The resulting valuation is summarised in Table 1.

Table 1: Morocco Valuation
                             Estimated Resources    Circle Oil    PoS   Net risked resources      Value to Circle Oil
                                        (mmboe)         share                       (mmboe)                    (US$)
Core                                          5.7        75%     100%                    4.3                      73.3
Upside                                      28.5         75%     67%                   14.3                       81.1
Total                                       34.2         75%     70%                    18.6                     154.5
                                                                                       Source: Circle Oil, FDC



Egypt
Circle Oil owns a 40% interest in the NW Gemsa concession (264km2), operated by Vegas (50%) and with Premier
(10%) as partner (Exhibit 7). The current exploration phase terminates in July 2010, with a 6-month extension period
allowed, and all commitments have already been met.

Two new discoveries have been made, Al Amir SE and Geyad, while the existing Al Amir heavy oil discovery has
been successfully appraised. The Shehab-1 well, despite encountering water-bearing Kareem sands at target
depth, logged potentially significant hydrocarbon-bearing Belayim sands above in the sequence. It was decided to
drill the latter further updip at a different location and at a time yet to be defined.

Exhibit 7: NW Gemsa concession location map




                                                                                       Source: Circle Oil

Further appraisal activity in 2009-2010 includes the drilling of up to five wells on Al Amir SE, a minimum of two wells
on Geyad and a minimum of one well on Shehab.




 10 July 2009                                                                                                            Page 7
 Circle Oil



Al Amir SE was put on production in Feb 2009 from two wells producing a combined 2,200 bpd and transported
through an existing pipeline to Gazwarina, 7km to the East, whereas Geyad is planned to start in summer 2009.
Later in the year Al Amir heavy oil should also come on-stream and will be trucked to a specialist oil terminal. The
company expects to achieve peak production of 8,000b/d in Al Amir SE and 3,000b/d at Geyad in the next three to
four years depending on the success of the forthcoming appraisal campaign. We believe that given recent track
record a probability of success of 67% is achievable; however in case of failure the downside is for peak production
to be limited to 4,000b/d and 2,000b/d for Al Amir SE and Geyad respectively. The heavy oil production at Al Amir
is assumed flat at 600b/d.

Current realisation prices are US$-2.95/b less than Brent for the light Al Amir SE and Geyad crude, while the Al Amir
heavy crude attracts approximately a US$-10/b discount. Production costs are conservatively assumed at US$6/b,
which is higher than currently incurred.

Table 2: NW Gemsa Valuation
Discovery                    Estimated Resources   Circle Oil    PoS   Net risked resources                Value (US$)
                                        (mmbbl)        share                       (mmbbl)
Al Amir SE                                  33.9        40%     84%                    11.4                     119.1
Geyad                                       13.5        40%     89%                     4.8                       49.9
Al Amir                                      1.3        40%     100%                    0.5                        4.3
Total                                       48.7        40%     86%                    16.7                     173.4
                                                                                      Source: Circle Oil, FDC



Tunisia
Circle Oil has an operating interest of 70% in the offshore Mahdia licence in the Gulf of Hammamet, with partner
Tethys at 30%. It also has non-operating interests in the Grombalia (36%) and Ras Marmour (23%) onshore blocks
operated by Exxoil and with ETAP as partner (Exhibit 8).

Exhibit 8: Tunisia permits location map




                                                                                      Source: Circle Oil




 10 July 2009                                                                                                            Page 8
 Circle Oil



Previous onshore exploration drilling was disappointing. Zita-1 was drilled in 2007 in the Ras Marmour permit and
encountered good oil shows while Serdouk-1, drilled in 2008 in the Grombalia permit was plugged and abandoned
as a dry well with no oil shows to report and tight formations at target depth.

The company is planning to shoot more 2D seismic in Ras Marmour, in particular over the Zita location, before
selecting a new location or re-entering Zita-1. Similarly more studies are necessary before finalising the next drilling
location in Grombalia.

The offshore Mahdia permit covers an area of 3,780 km2 and is bounded by the Nabeul Permit to the north and the
territorial boundary with the island of Lampedusa to the east. Historically the geology and potential of this and the
surrounding offshore area was successfully explored by Shell and Total and previous exploration has resulted in
discoveries and commercial oilfields including fields such as Tazerka, Birsa, Oudna, Halk El Menzel and Isis. The
interpretation of the latest 2D seismic survey will soon be completed. Several prospects had been mapped from
the existing dataset and they will be firmed-up in the light of the new data. Prospects range from 10-60MMbbls in
water depths of 85-200 m with a total of some 183MMbbls.

We have used estimates of the recent farm-in by Shell into Northern Petroleum permits in the Canal of Sicily, just
across the Italian border to guide our valuation of the Mahdia Block, resulting in a value of US$115.3m for Circle Oil,
or US$4.5/b.

Table 3: Tunisia Valuation
Licence                      Estimated Resources   Circle Oil   PoS   Net risked resources     Value to Circle Oil
                                        (MMbbl)        share                      (MMbbl)                   (US$)
Ras Marmour                                 79.7        23%     20%                    3.7                      16.5
Grombalia                                  144.3        36%     15%                    7.8                      35.1
Mahdia                                     183.0        70%     20%                   25.6                     115.3
Total                                      406.9        49%     19%                   37.1                     166.9
                                                                                     Source: Circle Oil, FDC



Namibia
Once the farm-out agreement for a 70% operator interest with PetroHolland is concluded, Circle Oil will have a
remaining 20% interest in the 70,000km2 Ovambo licence, with the State of Namibia (10%) as partner. The company
will be carried free through to production in addition to receiving a US$15m lump-sum.

We have not assigned any reserves to the exploration permit in Namibia due to the relatively early stage of
definition of the prospects, and therefore we have not included any value for the licence in our assessment of NAV.


Oman
Circle Oil operates Blocks 49 and 52 with shareholding interest of 100% and 90% respectively. Block 52 is in the
process of being farmed out whereas 3D seismic will be acquired in Q4 2009 in Block 49. The company will then
review its options regarding a potential farm-out.

We have not assigned any reserves to the exploration permits in Oman due to the relatively early stage of
definition of the prospects and therefore we have not included any value for the two blocks in our assessment of
NAV.




 10 July 2009                                                                                                          Page 9
 Circle Oil



Appendix 1: Asset valuation summary

Current share price (p)    31.0                                                                     Public market valuation
NAV per share (p)          79.9
= upside/downside         158%                                                                      NAV per share (p)            49.5     80.7

                                                                                                    Resources                    72.4     72.4
Market Cap                 444.7                                                                    US$/b                         4.5      6.9
EV                         494.7                                                                    EV (m$)                     325.6    499.2
Net debt                     0.0                                                                    Market Cap (m$)             275.6    449.2
Corporate costs            (50.0)
Other                        0.0



Year                         2009       2010        2011           %
Oil price ($/b)              55.0       55.0        75.0        2.0%
Gas price ($/mcf)             7.0        7.0         7.0



                                                        FDC estimates                                              FDC estimates
                          risked    per share   un-risked   per share   Discount   PoS   NAV         risked                     Oil      Gas
                           (m$)        (p)        (m$)         (p)      rate (%)    %     $/b        mmboe       mmboe        (mmbo)    (Bcf)

EV                         494.7         88.8    1,288.3        231.4              38    6.8             72.4       243.4       217.8    148.3

Assets

Morocco                    154.5         27.7      194.4         34.9               73    7.6           18.54       25.57        0.00   148.28
- core                      73.3         13.2       73.3         13.2     10       100   17.1            4.29        4.29        0.00    24.87
- upside                    81.1         14.6      121.1         21.7     10        67    5.7           14.26       21.28        0.00   123.41

Egypt                      173.4        31.1       201.2         36.1               86   10.3           16.73       19.45       19.45
Al Amir SE                 119.1        21.4       140.6         25.2               84   10.4           11.43       13.54       13.54
- core                      75.6         13.6       75.6         13.6     12       100   10.6            7.14        7.14        7.14
- upside                    43.5          7.8       65.0         11.7     12        67   10.1            4.29        6.41        6.41
Geyad                       49.9         9.0        56.3         10.1               89   10.3            4.84        5.44        5.44
- core                      37.0          6.6       37.0          6.6     12       100   10.2            3.62        3.62        3.62
- upside                    12.9          2.3       19.3          3.5     12        67   10.6            1.22        1.83        1.83
Al Amir                      4.3          0.8        4.3          0.8     12       100    9.3            0.46        0.46        0.46

Tunisia                    166.9         30.0      892.7        160.3              19    4.5            37.08      198.38      198.38
Ras Marmour                 16.5          3.0       82.5         14.8     12       20    4.5             3.67       18.33       18.33
Grombalia                   35.1          6.3      233.8         42.0     12       15    4.5             7.79       51.95       51.95
Mahdia                     115.3         20.7      576.5        103.5     12       20    4.5            25.62      128.10      128.10




                                                                                                Source: FDC




 10 July 2009                                                                                                                                   Page 10
 Circle Oil



Appendix 2: Recent News Flow
June 19th 2009 - Circle announced that the KSR-9 exploration well had been successfully drilled, logged and
tested in the Sebou Permit, Morocco. The company confirmed a discovery in the Mid & Lower Gaddari and Upper
Guebbas sequences with the well testing gas at sustained rates from two tested zones. The Mid Gaddari primary
target tested at a sustained rate of 8.05MMscfd using a 30/64” choke. The perforated interval of 1212.8-1215.5m
had a calculated net gas pay of 2.7m. The Lower Gaddari and Top Guebbas were perforated from 1239.2-1239.8m
and 1253.6-1254.7m and tested gas at a sustained rate of 4.66MMscfd using a 24/64” choke with a calculated net
pay of 1.7 metres. The Lower Guebbas between 1319.0-1319.5m had a calculated net gas pay of 0.5m.

June 3rd 2009 - Circle reported a new gas discovery in the Sebou permit, Morocco. The CGD-10 exploration well
tested gas at a sustained rate of 3.9MMscfd from the primary Guebbas Sequence target on a 24/64 inch choke,
with net pay of 3.3m. Circle has a 75% share and ONHYM, the Moroccan State oil company, has a 25% share.

May 19th 2009 - Circle announced that the Geyad-1X exploration well in Egypt yielded two oil and gas bearing
reservoirs in the Kareem sandstones. The well sustained an average combined flow rate from the two pay zones of
2,809bopd and 3.04MMscfd on a 64/64” choke. The lower zone flowed 1,174bopd and 1.324MMscfd while the
upper zone was not tested separately. The oil was of excellent quality at 40oAPI. Total pay thickness was
approximately 29ft with a lower zone of 19ft and an upper zone of 10ft.

February 16th 2009 - Circle announced that the KSR-8 well in the Sebou permit in the Rharb Basin in Morocco had
been completed. Two zones were tested, the first in the Upper Hoot formation at a depth of 1755.5-1758m and the
second, a twin sand, in the Main Hoot formation at depths of 1847.5-1849 m and 1853-1863 m, with net pay of 2.5m
and 11.5m respectively. The lower of the two zones in the Main Hoot formation flowed gas at a sustained rate of
12.48MMscfd through a 28/64" choke and produced no liquids. The zone in the Upper Hoot formation flowed at an
average rate of 6.76MMscf/d through a 24/64" choke and also produced no liquids.

January 15th 2009 - Circle confirmed a discovery in the Kareem Formation sandstones at its Al Amir SE-2X
appraisal well in Egypt. The well tested 41oAPI and sustained flow rates of 5,785bopd and 7.8MMscfd from the
lower of the two identified pay zones. The total net thickness of the two pay zones identified was approximately 42
feet and the upper pay zone was 22 feet thick.

December 1st 2008 - Circle announced an operational update on its Moroccan and Tunisian permits. In Morocco
the exploration well in the Sebou Permit, CGD-9, was drilled, logged and successfully tested confirming a sustained
gas rate during testing of 8.86MMscfd.

November 10th 2008 - Circle announced results from the exploration well ONZ6 in the Ouled N'Zala
Permit, Morocco. The Company confirmed a discovery in the Upper Ouled Formation with the well testing gas at a
sustained rate of 3.32MMscfd. The well was completed as a potential producer.

October 3rd 2008 - Circle announced a discovery at the NW Gemsa Concession in with AL Amir SE-1 ST well
testing 41oAPI oil and gas at sustained rates of 3388bopd and 4.25MMscfd.

September 9th 2008 - Circle announced the signature of a farm-out agreement on its Ovambo Basin licence
in Northern Namibia with Petroholland Ltd, a Dubai holding company. The licence covers an area of over 70,000
km2 immediately to the south of the Angola Namibia border. Under the terms of the agreement Petroholland
acquired a 70% undivided interest in the licence with Circle retaining a 20% interest and NAMCOR, the Namibian
State oil company holding 10%. In consideration for the 70% interest in the licence, Petroholland agreed to pay
Circle US$15m in cash and cover all of the costs attributable to Circle's 20% share of exploration and development
expenditure through to production.

June 19th 2008 - Circle announced the signing of a farm-in agreement to the Mahdia Permit offshore Tunisia with
Tethys Oil and Mining Ltd. The Mahdia permit covers an area of 3780km2 and is bounded by the Nabeul Permit to
the north and the territorial boundary with the island of Lampedusa (Italy) to the east. Following the farm-in, Circle
will hold a 70% working interest in the permit and will become operator once the acquisition of 500km of additional
2D seismic is complete, prior to the commencement of any drilling. The permit commitments require
the acquisition of 500km of 2D seismic in the first two years of the licence which commenced July 2007 and the
drilling of one commitment well in the subsequent three years to 2012.



 10 July 2009                                                                                                       Page 11
 Circle Oil



Research Disclosures
Lionel Therond
Lionel has worked at Fox-Davies since April 2009. Prior to this, he had 13 years experience as an investor at JPMorgan Asset
Management and had previously spent 10 years in the Oil&Gas industry at Shell. Lionel graduated in Geology and Geophysics
(MSc) before gaining an MBA at Insead; he is also a CFA charterholder.
T: +44(0)20 79365244
Lionel.Therond@fdcap.com




Investment analyst certification

All research is issued under the regulatory oversight of Fox-Davies Capital Limited. Each Investment Analyst of Fox-Davies
Capital Limited whose name appears as the Author of this Investment Research hereby certifies that the recommendations and
opinions expressed in the Investment Research accurately reflect the Investment Analyst’s personal, independent and objective
views about any and all of the Designated Investments or Relevant Issuers discussed herein that are within such Investment
Analyst’s coverage universe.

Fox-Davies Capital Limited provides professional independent research services and all Analysts are free to determine which
assignments they accept, and they are free to decline to publish any research notes if their views change.




 10 July 2009                                                                                                                  Page 12
 Circle Oil




Research Disclaimers

Research disclosure as of 10 July 2009

                    Company Name                                                           Disclosure
                    Circle Oil (COP)                                                       2, 7, 8



Investment Research Disclosure Legend:

1. In the past 12 months, Fox-Davies Capital Limited or its affiliates have had corporate finance mandates or managed or co-
     managed a public offering of the Relevant Issuer’s securities or received compensation for Corporate Finance services from
     the Relevant Issuer.
2.   Fox-Davies Capital Limited expects to receive or intends to seek compensation for Corporate Finance services from this
     company in the next six months.
3.   The Investment Analyst or a member of the Investment Analyst’s household has a long position in the shares or derivatives of
     the Relevant Issuer.
4.   The Investment Analyst or a member of the Investment Analyst’s household has a short position in the shares or derivatives
     of the Relevant Issuer.
5.   As of the month end immediately proceeding the date of publication of this report, or the prior month end if publication is
     within 10 days following a month end, Fox-Davies Capital Limited and / or its affiliates beneficially owed 1% or more of any
     class of common equity securities of the Relevant Issuer.
6.   A senior executive or director of Fox-Davies Capital Limited or a member of his or her household is an officer, director or
     advisor, board member of the Relevant Issuer and / or one of his subsidiaries.
7.   Fox-Davies Capital Limited makes a market in the securities of the Relevant Issuer.
8.   Fox-Davies Capital Limited acts as corporate broker for the Relevant Issuer.

The Investment Analyst who is responsible for the preparation of this Investment Research is employed by Fox-Davies Capital
Limited, a securities broker-dealer.

The Investment Analyst who is responsible for the preparation of this Investment Research has received (or will receive)
compensation linked to the general profits of Fox-Davies Capital Limited.

Research recommendations

Fox-Davies Capital uses a five-tier recommendation system for stocks under coverage:

Buy                Recommendation implies that expected total return of at least 15% is expected over 12 months between
                   current and analysts’ target price.
Trading Buy        Recommendation implies that the analysts’ expected total return over the short term compared against the
                   target price is positive.
Hold               Recommendation implies that expected total return of between 15% and zero is expected over 12 months
                   between current and analysts’ target price.
Trading Sell       Recommendation implies that the analysts’ expected total return over the short term compared against the
                   target price is negative.
Sell               Recommendation implies that expected total return expected over 12 months between current and analysts’
                   target price is negative.

Fox-Davies Capital Limited (FDC) has been advising and raising funds for the natural resource sector since February 2001. The firm
specialises in assisting international resource companies gain access to the UK, European and North American capital markets and has a
substantial background in emerging markets particularly in Africa, Asia, Russia and the CIS, raising over US$250mn in 2007.

FDC enjoys a successful track record in advising and undertaking fundraising transactions for its clients from private equity to IPO and
secondary offerings and works with over 350 specialised institutional resource and emerging markets funds worldwide.




 10 July 2009                                                                                                                         Page 13
 Circle Oil



FDC provides professional advice based on effective analysis and research to assist its corporate clients in presenting their proposals to
the investment community. Our strength lies in the oil & gas and mining sectors where as a company we have advised clients on AIM
and ASX.

FDC is authorised and regulated by the Financial Services Authority (FSA) and is a member firm of the London Stock Exchange (LSE).



Fox-Davies Capital Coverage

Fox-Davies corporate client & coverage universe as of 10 July 2009:


 Company                                    Ticker        Recommendation            Date            Target Price          Last Price
 Oil & Gas
 Afren                                  AFR LN Equity           HOLD              18.02.09             £0.30                £0.54
 Ascent Resources                       AST LN Equity            BUY              06.03.09             £0.15                £0.04
 Aurelian Oil and Gas                   AUL LN Equity            BUY              10.11.08             £0.75                £0.14
 BPC Ltd                                BPC LN Equity            BUY              18.05.09             £0.13                £0.02
 Cadogan Petroleum                     CAD LN Equity            HOLD              27.02.09             £0.05                £0.12
 Circle Oil                            COP LN Equity             BUY              10.07.09             £0.72                £0.31
 Dragon Oil                            DGO LN Equity             BUY              18.02.09             £2.90                £3.15
 Gulfsands                              GPX LN Equity            BUY              10.01.09             £3.10                £1.75
 JKX                                    JKX LN Equity            BUY              18.02.09             £4.20                £1.94
 Po Valley                              PVE AU Equity            BUY              02.03.09            A$2.70               A$1.315
 Range Resources                        RRL LN Equity           SELL              18.02.09             £0.06                £0.02
 Regal Petroleum                        RPT LN Equity            BUY              27.02.09             £2.70                £0.59
 San Leon Energy                        SLE LN Equity            BUY              07.07.09             £0.60                £0.20
 Sibir Energy                           SBE LN Equity           HOLD              18.02.09             £2.50                 NA
 Tower Resources                        TRP LN Equity           HOLD              17.06.09             £0.03                £0.02
 Zhaikmunai                             ZKM LI Equity            BUY              09.12.08             $13.10               $4.25




 10 July 2009                                                                                                                           Page 14
 Circle Oil



Disclaimer - Important Information


This document was produced by Fox Davies Capital, a trading name of Fox Davies Capital Limited (“FDC”), Whitefriars House, 6 Carmelite
Street, London EC4Y OBS. FDC is authorised and regulated by the Financial Services Authority (“the FSA”).

This document is not independent and should not be relied on as an impartial or objective assessment of its subject matter. Given the
foregoing this document is deemed to be a marketing communication and as such has not been prepared in accordance with legal
requirements designed to promote the independence of investment research and FDC is not subject to any prohibition on dealing
ahead of the dissemination of this document as it would be if it were independent investment research.

The research analyst is primarily responsible for the content of the research document. He/she certifies that all views expressed accords with
his/her personal views about the issuer or securities covered in the research document. The contents are based upon sources of information
believed to be reliable but no warranty or representation, expressed or implied, is given as to their accuracy or completeness. Any opinion
reflects our judgment at the date of publication and neither FDC, nor any of its affiliated or associated companies, nor any of their directors or
employees accepts any responsibility in respect of the information or recommendations contained herein which, moreover, are subject to
change without notice.

This is not an offer, nor a solicitation, to buy or sell any investment referred to in this document. The material is general information intended for
recipients who understand the risks associated with investment. It does not take account of whether an investment, course of action, or
associated risks are suitable for the recipient. FDC or its affiliated or associated companies and their directors or employees may, as principal or
as agent, make purchases, sales and offers to purchase or sell in the open market or otherwise and may have positions in or options on any such
investment(s). FDC may provide services (including corporate finance advice) where the flow of information is restricted by a Chinese Wall.
Accordingly, information may be available to FDC that is not reflected in this document.

This report has been approved in the UK by FDC solely for the purposes of section 21 of the Financial Services and Markets Act 2000. In the UK,
this report is directed at and is for distribution only to persons who (i) fall within Article 19(5) (persons who have professional experience in
matters relating to investments) or Article 49(2) (a) to (d) (high net worth companies, unincorporated associations, etc) of the Financial Services
and Markets Act 2000 (Financial Promotions) Order 2005 (as amended) or (ii) are intermediate customers or market counterparties of FDC (all
such persons together being referred to as “relevant persons”). This report must not be acted on or relied up on by persons in the UK who are
not relevant persons.

FDC Capital Limited may distribute research in reliance on Rule 15a-6(a)(2) of the Securities and Exchange Act 1934 to persons that are major US
Institutional investors, however, transactions in any securities must be effected through a US registered broker-dealer. Any failure to comply with
this restriction may constitute a violation of the relevant country’s laws for which FDC does not accept responsibility. By accepting this document
you agree that you have read the above disclaimer and to be bound by the foregoing limitations / restrictions.

Please note that unless otherwise stated, the share price used in this publication is taken at the close of business for the previous business day.




 10 July 2009                                                                                                                                         Page 15
                                                                                                  Circle Oil




Sales                                        Research                             Market Making
Oliver Stansfield +44 (0)20 7936 5222        Peter Rose +44 (0)20 7936 5246       Russell Jackson +44 (0)20 7936 5214
oliver.stansfield@fdcap.com                  peter.rose@fdcap.com                 russell.jackson@fdcap.com

Corporate Broking                            Lionel Therond +44 (0)20 7936 5244   Chris Hart +44 (0)20 7936 5227
                                             lionel.therond@fdcap.com             christopher.hart@fdcap.com
John Gilbert +44 (0)20 7936 5225
John.gilbert@fdcap.com                       Ian Lucas +44 (0)20 7936 5245        STX 77766
                                             ian.lucas@fdcap.com
David Poraj-Wilczynski +44 (0)20 7936 5226
David.poraj-wilczynski@fdcap.com                                                  Dealing
                                                                                  Steve Cowan +44 (0)20 7936 5247
                                                                                  Steve.cowan@fdcap.com

                                                                                  Ken Taylor +44 (0)20 7936 5235
                                                                                  Ken.taylor@fdcap.com

                                                                                  STX 77767




                                                                                              Fox-Davies Capital
                                                                                                Whitefriars house
                                                                                               6 Carmelite Street
                                                                                               London EC4Y 0BS

                                                                                           T +44 (0) 20 7936 5200
                                                                                           F +44 (0) 20 7936 5201

                                                                                                 www.fdcap.com

				
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