REG - Canadian O'Seas Petr - COPL Prospectus Filing & Trading Update

Canadian Overseas PetroleumAnnouncement

01/02/2023 14:30

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230201:nRSA6250Oa&default-theme=true

RNS Number : 6250O  Canadian Overseas Petroleum Ltd  01 February 2023

COPL Prospectus Filing & Trading Update

London, United Kingdom; Calgary, Canada: February 1, 2023 - 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, has filed a prospectus dated 31 January 2023 with the
Financial Conduct Authority and provides a trading update.

2022 Trading Update

The average annual gross lease oil production for 2022 was 1,550 bbls/d (1,085
bbls/d net before royalties).  The total gross miscible flood injection
volumes in 2022 at the BFSU were 1,434 Mmcf of natural gas and 6.9 million
gallons of liquified petroleum gas (LPG) for a total net cost to the Company
of about $6.8 million.  The Company's financial results for calendar year
2022 are significantly impacted by an $8.0 million net loss on the oil and
butane hedge contracts, $8.1 million of debt service and financing costs and a
$2.9 million repayment of its senior credit facility.  The Company's
operations have been challenged by production interruptions, caused by
paraffin and infrastructure bottlenecks, as well as by inflationary pressure
on services and equipment and delays in obtaining services due to industry
demand and adverse weather in the Powder River Basin, Wyoming and surrounding
region.

Production at the Barron Flats Shannon Unit ("BFSU") is expected to remain
constrained until such time as the Company secures funding to debottleneck the
gas gathering system to recover produced gas for re-injection.  An upgraded
gas gathering system is planned to be installed in phases through 2023 subject
to available funding which, as detailed below, the Company is working to
secure.

The Company's fourth quarter gross lease oil production was 1,360 bbls/d
(1,169 bbls/d net before royalties) which included weather related shut ins
that impacted the Company in December 2022.

Working Capital Position

The Company's Wyoming operations and operating cash flow have recently (during
late December 2022 and January 2023) been impacted by weather-related downtime
and long-lead times or unavailability of services required for paraffin
remediation and production management at BFSU.  Severe winter storms impacted
the Company's oil sales during January 2023 as oil haulers were unable to
safely navigate roads.  On 28 January 2023 the BFSU gas plant and field
operations were shut-in for safety purposes due to severe winter weather and
BFSU production and gas injection has been offline since that date.  BFSU
production facilities are presently being re-started from 30 January 2023 as
weather and access roads are cleared.  Limited quantities of oil have been
trucked from Cole Creek Unit during this time.  As a result of these
interruptions in production and sales the Company's affiliate COPL America may
not meet its financial covenants pursuant to its Senior Credit Facility in
February 2023 and March 2023 unless new financing is secured.

 

The Company does not currently have sufficient working capital for its present
requirements and the Company believes that additional financing will be
required by March 2023. With no assurance that further financing (by way of
equity and/or debt) will be obtained, there is material uncertainty that casts
significant doubt the Company's ability to continue as a going concern.  Full
details of the Company's working capital shortfall and the steps the Company
is taking to address its working capital shortfall are available in the
Prospectus dated 31 January 2023 which is publicly available at the National
Storage Mechanism via https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://us-west-2.protection.sophos.com/?d=fca.org.uk&u=aHR0cHM6Ly9kYXRhLmZjYS5vcmcudWsvIy9uc20vbmF0aW9uYWxzdG9yYWdlbWVjaGFuaXNt&i=NjE3MTkwZjFlOWZkN2MxMDRiMmJjZDlk&t=bFFyNVIvMjJTUzIrOHpwTm9wc0w4Y041d09TU1Y1akpJZWkvcEJGQUxjYz0=&h=a37268bb727b42898765c5d372e3c2c3&s=AVNPUEhUT0NFTkNSWVBUSVal3zBS2hd2QNscNS8FeTyyxgf2yksK2M0HVUtP5gPCGWu9GP6AcGEKmi-RWUt_wRI)
, www.sedar.com (http://www.sedar.com) and
www.canoverseas.com/shareholder-information/
(http://www.canoverseas.com/shareholder-information/) .

 

Financing Initiatives

The Company is working closely with its professional advisers to negotiate and
secure a new senior debt facility, which the Company is targeting to draw down
prior to 31 March 2023.  The Company has engaged with numerous US and
International banks and institutional debt investors and expects to secure a
term sheet based on its 2022 year-end reserve report for the Wyoming Assets,
which is expected to be available in late February 2023 and, will be published
in late March 2023 at the time COPL files its 31 December 2022 annual audited
financial statements.  The Company is also actively negotiating and intends
to issue additional 2025 Bonds and warrants pursuant to a second tranche of
the Winter Bond Financing (announced 3 January 2023), which is expected to
close in February 2023 to support its near-term capital requirements for the
Company and its affiliate, COPL America.

In addition to securing financing from debt and equity capital markets, the
Company confirms that it is actively negotiating terms for a joint venture for
the long-term development of its Wyoming assets.  The Company plans to
announce the detailed terms as soon as they are agreed.

Director Retirement

Mr. Nigel Little has resigned effective 22 January 2023 for health
reasons.   The Company thanks Mr. Little for his contributions and service
over the past year and wishes Mr. Little a full recovery.

 

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

 

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.

 

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 information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTEADAFESPDEFA