Prospects for Irish explorer Circle Oil dwindle

Irish exploration company Circle Oil said its listing on the London stock exchange will be canceled by the end of the week amid financial strains.

"The company's financial position remains under significant pressure," it said in a statement.

The company in March embarked on a strategic review, with a potential sale offering or merger with a third party among the options. By June, the company suspended its shares on the London exchange after its own strategy review found a debt load exceeded $75 million.

When oil prices were holding above $100 per barrel more than two years ago, the company said it was "very pleased" with its prospects in Morocco in particular. Elsewhere in the region, however, the company said irregular payment schedules from its clients in Egypt made covering its short-term debt obligations difficult at best.

In its latest statement, the company said it could draw down its debt load, however, if the Egyptian General Petroleum Corp. comes forward with payments by the end of January.

Several international oil and gas companies were hobbled by the downturn in crude oil prices, with spending cuts and headcount reductions commonplace during the start of the year. Circle Oil said its strategic review process was ongoing.

Company directors early this year warned it may be likely that equity holders will get no value from whatever emerges from the review process.