Irish independent Circle Oil is considering a debt restructuring amongst options to try and improve its balance sheet and ensure adequate cash flow to fund its operations.
The company said it also considering an equity raise – any deal will be implemented by the end of quarter one of 2016.
Despite Circle’s low cost operations, trading remains very challenging due to a further weakening of global oil prices, varying production levels in NW Gemsa and the impact of macro events on payments from EGPC.
Circle said discussions are ongoing regarding the borrowing base of the RBL facility under which $57.5 million is currently drawn. Following the redetermination the company said it expects the borrowing base to be reduced and as a result there will be a moderate shortfall, although both parties are actively engaged in constructive dialogue to find a solution.