REG - Canadian O'Seas Petr - 2025 Convertible Bond Additional Financing

Canadian Overseas PetroleumAnnouncement

03/01/2023 07:00

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RNS Number : 4074L  Canadian Overseas Petroleum Ltd  03 January 2023

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, THE REPUBLIC OF
SOUTH AFRICA, NEW ZEALAND OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH
RELEASE, PUBLICATION OR DISTRIBUTION WOULD BREACH ANY APPLICABLE LAW OR
REGULATION.

 

COPL 2025 Convertible Bond Additional Financing

London, United Kingdom; Calgary, Canada: January 03, 2023 London - Canadian
Overseas Petroleum Limited ("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, is pleased to announce (the "Announcement"):

 

·    The Company has signed a "Tap" Purchase Agreement for the issue of
further 2025 convertible bonds pursuant to the Bond Instrument dated July 26,
2022 with an aggregate principal amount of US$4 million (the "Convertible
Tap"). The Convertible is fully anchored by the lead investor for the July
2022 Convertible offering (the "Lead Investor")

·   Alongside Convertible Tap, COPL has received written consent from a
majority of 2025 Bondholders to avoid adjustments to the 2025 Bond Instrument
conversion price minimizing shareholder dilution. The main Bond terms are
identical to the existing 2025 Convertible Bonds (the "Convertibles"). Pricing
terms have improved vs. July 2022 issue (higher issue price: 80% vs 78% on
July Convertibles), higher strike on new warrants of 18p vs 16.75p on July
warrants.

·    Following the Company's hedge restructuring, the offering proceeds
will be used for recompletions at Cole Creek Frontier Sands, capex and
miscible injections at the Barron Flats Shannon flood and for up front
deposits and fees for debt refinancing term sheets for COPL America.

·    The Company anticipates signing a Debt refinancing term sheet in
January 2023 and closing the debt refinancing in the first quarter of 2023.

·    A 'tap feature' to increase the Convertible allows COPL to draw
further development funds, should it require, with the aim of increasing
production or for future drilling plans, subject to mutual agreement with the
Lead Investor, as COPL has done with this Convertible Tap.

·    COPL has the support of its existing Lender and has structured
amendment to its Senior Credit Facility as it continues its debt refinancing
and joint venture discussions for the development of its Wyoming assets.

 

Convertible Terms

Terms not defined in this Announcement have the meaning given to them in the
Convertible Bond Instrument which is available on the Company's profile at
www.sedar.com (http://www.sedar.com) .  The Company encourages readers to
review its Financial Statements and Management Discussion and Analysis for the
Third Quarter of 2022 for a full summary of the Convertible terms which are
summarised are as follows:

 

Amendment to Senior Credit Facility

To facilitate the Convertible Tap and COPL's first quarter objectives
including debt refinancing, COPL has agreed to amendments of certain terms of
its Senior Credit Facility.  The liquidity covenant has been amended to a
30-day average of $2 million and requisite permissions for the funding of COPL
America's first quarter of 2023 work programme and use of the Convertible Tap
proceeds have been received.

 

Waiver of 2025 Bond Instrument Adjustments

COPL has received written consent from a majority of 2025 Bondholders to avoid
adjustments to the 2025 Bond Instrument conversion price which remains at
$0.1583 per share for each $200,000 of 2025 Principal Outstanding.   There
are no changes to the 2024 Bond Instrument or Warrants issued in July 2022 as
a result of this Convertible Tap Financing.

 

Arthur Millholland, President and Chief Executive Officer, commented: "The Tap
provided by our lead institutional investor today illustrates the confidence
they have in our business plan going forward. Long term investors in the
Company are key to our future, as they provide balance and confidence to our
current shareholders, and other stakeholders, by allowing the Company to grow
through the execution of its business plan. One only needs to look at
Occidental Petroleum who have performed brilliantly with the support of a
single long term lead institutional investor."

 

 

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 Converse County Wyoming, and in sub-Saharan Africa through its ShoreCan
joint venture company in Nigeria, and independently in other countries.

 

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

 

 

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

 

Market Abuse Regulation disclosure

The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended ("MAR") encompassing information relating to
the Placing described above, and is disclosed in accordance with the Company's
obligations under Article 17 of MAR. In addition, market soundings (as defined
in MAR) were taken in respect of the Placing with the result that certain
persons became aware of inside information (as defined in MAR), as permitted
by MAR. This inside information is set out in this Announcement. Therefore,
upon publication of this announcement, those persons that received such inside
information in a market sounding are no longer in possession of such inside
information relating to the Company and its securities.

 

Caution regarding forward looking statements

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.

 

This announcement has been issued by and is the sole responsibility of the
Company. No representation or warranty, express or implied, is or will be made
as to, or in relation to, and no responsibility or liability is or will be
accepted by either Hannam & Partners (apart from the responsibilities or
liabilities that may be imposed by the Financial Services and Markets Act
2000, or the regulatory regime established thereunder) or the Company or by
any of their respective affiliates or agents as to, or in relation to, the
accuracy or completeness of this announcement or any other written or oral
information made available to or publicly available to any interested party or
its advisers, and any liability therefore is expressly disclaimed.

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