REG - Canadian O'Seas Petr - Resource Report Confirms Wyoming Oil Discovery

Canadian Overseas PetroleumAnnouncement

05/08/2022 07:00

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RNS Number : 0151V  Canadian Overseas Petroleum Ltd  05 August 2022

 

 

Independent Resource Report Confirms Wyoming Oil Discovery

London, United Kingdom; Calgary, Canada: August 05, 2022 - 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, has received a Resource Report
(the "Report") prepared by independent energy consultancy Ryder Scott dated
July 29, 2022 confirming its deep oil discovery (the "Discovery") on its
affiliate COPL America Inc's lands in Converse and Natrona counties, Wyoming.

 

The Report was commissioned by COPL to supplement its internal assessment of
crude oil resources in its Discovery disclosed to the market in January 2022.

 

The Report is compliant to Canadian regulatory requirements pursuant to
National Instrument 51-101 - Standards of Disclosure for Oil and Gas
Activities ("NI 51-101") which stress conservatism to the evaluation. The
geologic interpretations, reservoir determinations and risk assessments are
Ryder Scott's, and as such independent of the Company.

 

Highlights

 

·    Confirms the Wyoming deep discovery has total Original Oil in Place
of 993.5 million barrels

·    It is independent verification of the oil Discovery announced in
January 2022

·    These are conservative estimates complying with Canadian standards

·    The Report:

o Supports the Company's conclusion that the Frontier 2 and Dakota discoveries
are large stratigraphic oil accumulations encompassing the reserves at the
Company's operated 100% WI Cole Creek field;

o Outlines 118 horizontal well locations to exploit the identified Frontier 2
and Dakota Reserves and Resources

·    COPL plans to drill one horizontal Frontier 1 well and two horizontal
Frontier 2 wells as part of its 2022-23 drilling campaign commencing in Q4
2022 with two of the horizontals offsetting the 14-30V discovery well drilled
in Q3 2021.

 

Arthur Millholland, President & CEO, commented: "This independent Report
validates what we announced at the start of the year and highlights the
significant potential of our fantastic Wyoming asset. Compiled to Canadian
regulatory standards, the Report gives a conservative view, and we expect to
see further exploration upside in due course once our drilling program gets
under way in the coming months. Following on from the recent financing and
completion of the Cuda Energy acquisition, this Report is another step forward
as we transform into an oil producer of scale."

 

Investor Meet Company Webinar

 

The Company will be hosting an investor webinar via the Investor Meet Company
platform on Monday August 8, 2022 at 4pm (UK) to discuss the Resource Report
and other recent updates. The meeting is open to all existing and potential
shareholders.

 

Investors can sign up to Investor Meet Company for free and "add to
meet" Canadian Overseas Petroleum Limited via:
https://www.investormeetcompany.com/canadian-overseas-petroleum-limited/register-investor
(https://www.investormeetcompany.com/canadian-overseas-petroleum-limited/register-investor)
. Investors who already follow COPL will be automatically invited.

 

Summary of Report

 

The Report only evaluates COPL's working interest leasehold at the Cole Creek
Unit, the non-unit working interest leasehold immediately to the north and
east of Cole Creek and includes the western portion of the Barron Flats
Federal Deep Unit.  (The Report does not evaluate the full extent of the
Frontier 1 and Frontier 2 as mapped by the Company outside of these lands.)
Prospective Resources in the Report were determined probabilistically with the
associated risk factors determined by Ryder Scott. Contingent Resources in the
Report were determined deterministically based on the parameters used in the
evaluation of the Company's Oil and Gas Reserves at Cole Creek.

 

COPL discovered oil in five reservoir sands in the Upper Cretaceous Frontier 1
(3 reservoir sands), Frontier 2 and Lower Cretaceous Dakota Formations in the
BFU Fed 14-30VF well, which was drilled and completed in the third quarter of
2021. The Report classifies crude oil resources in the Frontier 1 Formation as
Prospective Resources. Crude oil resources in the Frontier 2 and Dakota
Formations are classified as Contingent Resources ("1C", "2C" and "3C"), which
are complementary to Proven Producing and Undeveloped ("1P"), Probable
Producing and Undeveloped ("2P") booked by the Company at its Cole Creek Unit
as the Frontier 2 and Dakota are considered to be single oil accumulations
respectively.

 

Summary of the Total Original Oil in Place ("OOIP") at the asset

 

·    Frontier 1: 704,728,000 Bbls.

·    Frontier 2: 217,365,000 Bbls.

·    Dakota: 71,379,000 Bbls.

·    Total OOIP: 993,472,000 Bbls.

 

Frontier 1 Formation

 

The Report has classified the oil resources in the Frontier 1 Formation and
its three reservoir sands as Prospective Resources. The Report assumes the
areal extent of the Frontier 1 reservoir development to mirror the underlaying
Frontier 2 Formation, thus covering 20,500 acres of operated Company lands.
The Company plans to further evaluate the three Frontier 1 sands through
coring and open hole testing in the first horizontal well in the Barron Flats
Federal Deep Unit targeting the Frontier 2 Formation during Q4 2022. Following
the completion of this well, the Company will drill and complete a horizontal
well in the Frontier 1 in the Barron Flats Federal Deep Unit.  In addition,
the Company has identified suitable well bores at its Cole Creek Unit to
re-complete in the Frontier 1 for production in Q4 2022. As such, the current
resource estimates as outlined are likely to be revised and/or reclassified
after this evaluation program.

 

Prospective Resources in the Report for the Frontier 1 were determined
probabilistically with the associated risk factors determined by Ryder Scott.

 

·    OOIP: 704,728, 000 Bbls. (Probabilistic, High Estimate)

 

Frontier 2 Formation

 

The Report supports the Company's conclusion that the Frontier 2 Discovery is
a large stratigraphic oil accumulation encompassing the Frontier 2 reserves at
the Company's operated 100% WI Cole Creek field. Proven and Probable ("1P and
2P") Developed and Undeveloped Reserves are currently carried by the Company
at Cole Creek over a combined 7,200 acres. The Report adds Frontier 2 oil
resources classified as Contingent Resources (1C, 2C and 3C) on Company
operated lands over an additional 14,160 acres extending to the east to within
the operated Barron Flats Federal Deep Unit. The total area evaluated in the
Report encompasses 21,360 acres of Company operated lands having P1 and P2
Reserves, and 1C, 2C, 3C Contingent Resources.

 

The Report has identified 89 horizontal well locations on the Company's
operated leasehold to exploit the identified Frontier 2 Reserves and
Resources. Twenty-Eight of the horizontal well locations to exploit the 1P and
2P Reserves are located in the operated 100% WI Cole Creek Unit, with the
balance of 61 horizontal well locations located on the 1C, 2C and 3C
Contingent Resources classified lands within the operated 85% WI Barron Flats
Federal Deep Unit and operated 100% WI interest non-unit lands in the area
between the Cole Creek Unit and Barron Flats Federal Deep Unit.

 

The Company plans to drill two Frontier 2 horizontal wells in its 2022-23
drilling campaign commencing in Q4 2022. The first Frontier 2 horizontal well
will be located in the Barron Flats Federal Deep Unit offsetting its 2021 BFU
Fed 14-30VF discovery well in an area classified as 3C Contingent Resources.
The second Frontier 2 horizontal well will be drilled on an existing permitted
location in the Cole Creek Unit targeting Proven 1P and Probable 2P
undeveloped Reserves.

 

Contingent Resources for the Frontier 2 in the Report were determined
deterministically, based on the parameters used in the evaluation of the
Company's Reserves at Cole Creek as stated in the Report.

 

·    Original Oil in Place ("OOIP")

o OOIP: 217,365,000 Bbls. (Deterministic)

§ Note: This includes the OOIP in the area of the Cole Creek Unit Proved (1P)
and Probable (2P) Reserves

·    Horizontal Well Locations:

o Cole Creek Unit: 28 horizontal well locations

o Barron Flats Federal (Deep) Unit and non-Unit lands: 61 horizontal well
locations

·    Total net risked Contingent Resources 1C, 2C and 3C Recoverable

o 23,747,000 Bbls.

 

Dakota

 

The Report supports the Company's conclusion that the Dakota Discovery is a
stratigraphic oil accumulation encompassing the Dakota reserves at the
Company's operated 66.667% WI Cole Creek field. Proven and Probable ("1P and
2P") Developed and Undeveloped Reserves are currently carried by the Company
at Cole Creek over a combined 7,920 acres. The Report adds Dakota oil
resources classified as Contingent Resources (1C, 2C and 3C) on Company
operated lands over an additional 4,560 acres extending to the east to within
the operated Barron Flats Federal Deep Unit. The total area evaluated in the
Report encompasses 12,480 acres of Company operated lands having 1P and 2P
Reserves, and 1C, 2C, 3C Contingent Resources.

 

The Report has identified 29 horizontal well locations on the Company's
operated leasehold to exploit the identified Dakota Reserves and Resources.
Eighteen of the horizontal well locations to exploit the P1 and P2 Reserves
are located in the operated 100% WI Cole Creek Unit, with the balance of 11
horizontal well locations located on the 1C, 2C and 3C classified lands within
the operated 100% WI Cole Creek Unit and operated 100% WI interest non-unit
lands in the area north and east of the Cole Creek Unit.

 

The Company has deferred the drilling of the Dakota horizontal wells as it
plans to target exploitation and development of the Frontiers 1 and 2
Formations initially.

 

Contingent Resources for the Dakota in the Report were determined
deterministically based on the parameters used in the evaluation of the
Company's Reserves at Cole Creek as stated in the Report.

 

·    Original Oil in Place ("OOIP")

o OOIP:  71,379,000 Bbls. (Deterministic)

§ Note: This includes the OOIP in the area of the Cole Creek Unit Proved (1P)
and Probable (2P) Reserves

 

·    Horizontal Well Locations:

o Cole Creek Unit: 18 horizontal well locations

o Barron Flats Federal (Deep) Unit and non-Unit lands: 11 horizontal well
locations

 

·    Total net risked Contingent Resources 1C, 2C and 3C Recoverable

o 4,079,000 Bbls.

 

Definitions

 

Contingent Resources

 

Those quantities of petroleum estimated, as of a given date, to be potentially
recoverable from known accumulations using established technology or
technology under development, but which are not currently considered to be
commercially recoverable due to one or more contingencies. Contingencies may
include factors such as economic, legal, environmental, political, and
regulatory matters, or a lack of markets. It is also appropriate to classify
as contingent resources the estimated discovered recoverable quantities
associated with a project in the early evaluation stage. Contingent Resources
are further classified in accordance with the level of certainty associated
with the estimates and may be sub-classified based on project maturity and/or
characterized by their economic status.

 

Estimates of resources always involve uncertainty, and the degree of
uncertainty can vary widely between accumulations/projects and over the life
of a project. Consequently, estimates of resources should generally be quoted
as a range according to the level of confidence associated with the estimates.
The range of uncertainty of estimated recoverable volumes may be represented
by either deterministic scenarios or by a probability distribution. Resources
should be provided as low, best, and high

estimates as follows:

 

·    Low Estimate: This is considered to be a conservative estimate of the
quantity that will actually be recovered. It is likely that the actual
remaining quantities recovered will exceed the low estimate. If probabilistic
methods are used, there should be at least a 90 percent probability (P90) that
the quantities actually recovered will equal or exceed the low estimate.

·    Best Estimate: This is considered to be the best estimate of the
quantity that will actually be recovered. It is equally likely that the actual
remaining quantities recovered will be greater than or less than the best
estimate. If probabilistic methods are used, there should be at least a 50
percent probability (P50) that the quantities actually recovered will equal or
exceed the low estimate.

·    High Estimate: This is considered to be an optimistic estimate of the
quantity that will actually be recovered. It is unlikely that the actual
remaining quantities recovered will exceed the high estimate. If probabilistic
methods are used, there should be at least a 10 percent probability (P10) that
the quantities actually recovered will equal or exceed the high estimate.

 

The low, best, and high estimates for contingent resources are abbreviated as
1C, 2C, and 3C, respectively, with the corresponding reserves categories of
proved (1P), proved + probable (2P), and proved + probable + possible (3P).
This approach to describing uncertainty may be applied to reserves, contingent
resources, and prospective resources. There may be significant risk that
sub-commercial and undiscovered accumulations will not achieve commercial
production. However, it is useful to consider and identify the range of
potentially recoverable quantities independent of such risk.

 

Prospective Resources

 

Those quantities of petroleum estimated, as of a given date, to be potentially
recoverable from undiscovered accumulations by application of future
development projects. Prospective resources have both an associated chance of
discovery and a chance of development. Prospective Resources are further
sub-divided in accordance with the level of certainty associated with
recoverable estimates assuming their discovery and development and may be
sub-classified based on project maturity.

 

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 three Units: Cole Creek 100% WI, Barron Flats Shannon
(Miscible) 85% WI and the 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

 

Charles Goodwin

Yellow Jersey PR Limited

Tel: +44 (0) 77 4778 8221

Email: 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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