REG - Canadian O'Seas Petr - First Quarter 2023 Financial Results

Canadian Overseas PetroleumAnnouncement

16/05/2023 07:00

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RNS Number : 5470Z  Canadian Overseas Petroleum Ltd  16 May 2023

COPL Announces First Quarter 2023 Financial Results

 

London, United Kingdom; Calgary, Canada: May 16, 2023 - Canadian Overseas
Petroleum Limited and its affiliates ("COPL" or the "Company") (XOP: CSE)
& (COPL: LSE), an international oil and gas exploration, production and
development company with production and development operations focused in
Converse and Natrona counties, Wyoming, USA, announces the publication of its
Financial Statements and Management Discussion and Analysis for the three
months ended March 31, 2023.

First Quarter 2023 Financial Highlights:

·    The Company's average crude oil sales before royalties averaged 974
bbls/d as compared to 1,177 bbls/d in the fourth quarter of 2022. The decrease
in oil production is due primarily to operational interruptions at certain
high impact wells, including unusually severe winter weather conditions, which
caused multiple field wide shut-ins due to road closures to the fields and
blockages within the fields restricting access for crude oil offtake.

·    Petroleum sales, net of royalties were $5.2 million as compared to
$6.7 million in the fourth quarter of 2022. The decrease is due mainly to the
reduction in oil production and a reduction in the realized sales price of oil
of $74.94/bbl as compared to $79.84/bbl in the fourth quarter of 2022.

·    The Company incurred a net realized hedging gain of $0.5 million on
butane swap contracts as compared to net loss of $2.2 million on crude oil and
butane swap contracts in the fourth quarter of 2022. Specifically, the Company
eliminated its crude oil hedge swap contracts in for the first and second
quarters of 2023 after executing a costless hedge restructuring in December
2022 as compared to a realized loss on crude swaps of $2.7 million in the
fourth quarter of 2022. The Company had a realized gain of $0.5 million on
butane hedge contracts as compared to a gain of $0.5 million in the fourth
quarter of 2022. The butane hedges were put in place to protect the liquid
purchases required for the miscible flood injection program.

·    The operating netback was $17.19/bbl, before the net realized gain on
crude oil and butane commodities contracts as compared to $23.38/bbl, in the
fourth quarter of 2022. The decrease is due mainly to the reduction in WTI
from $82.65/bbl in the fourth quarter of 2022 as compared to $76.13/bbl in the
first quarter of 2023 and increased operating costs due mainly to a series of
severe winter storms from late December 2022 to the last week in March 2023.
This caused field wide shut-ins multiple times due to road closures to the
fields and blockages within the fields. These issues caused a substantial
increase in operating costs due to heavy equipment required for snow removal
and hot oiling required to break emulsions in the produced crude from storage
tanks in order to meet requirements and specifications for sales.

·    On March 24, 2023, the Company issued a total of $11.8 million net
proceeds of convertible bonds to further its corporate strategy of its US
operations. The Company's affiliate COPL America also agreed to waivers of
certain debt covenants from the convertible bond closing date, to 30 September
2023 providing COPL with financial flexibility during the installation of the
gas gathering system upgrades at its BFSU miscible flood to resolve
infrastructure bottlenecks that have constrained oil production and gas
recovery. COPL is working to increase oil production and lower its operating,
financing and G&A costs whilst COPL America prepares for senior debt
refinancing.

·    In an effort to manage its capital resources and liquidity, the
Company reduced capital expenditures in the period to $1.6 million as compared
to $2.3 million in the fourth quarter of 2022.

·    A cash position of $10.7 million as at March 31, 2023 as compared to
$4.0 million as at December 31, 2022.

 

The Financial Statements and the Management's Discussion and Analysis as at
and for the quarter ending March 31, 2023, can be viewed under the Company's
profile at www.sedar.com (http://www.sedar.com) or at the Company's website at
www.canoverseas.com (http://www.canoverseas.com) . The Company encourages
interested parties to read the Management's Discussion and Analysis along with
the Financial Statements and accompanying notes.

 

About the Company:

COPL is an international oil and gas exploration, development and production
company actively pursuing opportunities in the United States with operations
in Wyoming.

The Company operates the Cole Creek Unit 100% WI, Barron Flats Shannon
(Miscible) Unit 85% WI and holds Barron Flats Federal (Deep) 85% WI in
addition to non-unitized lands 100% WI.

The Company's Wyoming operations are one of the most environmentally
responsible with minimal gas flaring and methane emissions combined with
electricity sourced from a neighbouring wind farm to power production
facilities.

For further information, please contact:

Mr. Arthur Millholland, President & CEO

Mr. Ryan Gaffney, CFO

Canadian Overseas Petroleum Limited

Tel: + 1 (403) 262 5441

 

Cathy Hume

CHF Investor Relations

Tel: +1 (416) 868 1079 ext. 251

Email: cathy@chfir.com (mailto:cathy@chfir.com)

 

Charles Goodwin

Yellow Jersey PR Limited

Tel: +44 (0) 77 4778 8221

Email: copl@yellowjerseypr.com (mailto:copl@yellowjerseypr.com)

 

Peter Krens

Equity Capital Markets, Tennyson Securities

Tel: +44 (0) 20 7186 9033

 

Alex Wood & Keith Dowsing

Joint Broker

Alternative Resource Capital

AW: +44 (0) 7559 910872

KD: +44 (0) 7559 910873

 

Andrew Chubb / Neil Passmore

Advisors/Joint Brokers

Hannam & Partners

+44 (0) 20 7907 8500

 

The Common Shares are listed under the symbol "XOP" on the CSE and under the
symbol "COPL" on the London Stock Exchange.

This news release contains forward-looking statements. The use of any of the
words "initial, "scheduled", "can", "will", "prior to", "estimate",
"anticipate", "believe", "should", "forecast", "future", "continue", "may",
"expect", and similar expressions are intended to identify forward-looking
statements. The forward-looking statements contained herein are based on
certain key expectations and assumptions made by the Company, including, but
not limited to, the ability to raise the necessary funding for operations,
delays or changes in plans with respect to exploration or development projects
or capital expenditures. Although the Company believes that the expectations
and assumptions on which the forward-looking statements are based are
reasonable, undue reliance should not be placed on the forward-looking
statements since the Company can give no assurance that they will prove to be
correct since forward-looking statements address future events and conditions,
by their very nature they involve inherent risks and uncertainties most of
which are beyond the control of Canadian Overseas Petroleum Ltd. For example,
the uncertainty of reserve estimates, the uncertainty of estimates and
projections relating to production, cost overruns, health and safety issues,
political and environmental risks, commodity price and exchange rate
fluctuations, changes in legislation affecting the oil and gas industry could
cause actual results to vary materially from those expressed or implied by the
forward-looking information.  Forward-looking statements contained in this
news release are made as of the date hereof and Canadian Overseas Petroleum
undertakes no obligation to update publicly or revise any forward-looking
statements or information, whether as a result of new information, future
events or otherwise, unless so required by applicable securities laws.

 

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