TIDMCOPL
RNS Number : 5260T
Canadian Overseas Petroleum Ltd
15 November 2023
COPL Announces Q3-2023
Operational and Financial Results
London, United Kingdom; Calgary, Canada: November 15, 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 operations
focused in Converse and Natrona counties, Wyoming, USA, announces
the publication of its Financial Statements and Management
Discussion and Analysis for the three and nine months ended
September 30, 2023 and provides an operations update.
Third Quarter 2023 Operational Highlights:
-- The Company's working interest average crude oil sales before
royalties averaged 1,029 bbls/d (1,193 bbls/d gross lease) as
compared to 1,103 bbls/d (1,267 bbls/d gross lease) in the second
quarter of 2023. Production was impacted primarily due to downtime
at high productivity wells. Field work was undertaken to repair and
dome access roads, with numerous required inspections and repair
programs to all low-pressure heater-treater-separator units to
prepare the upgraded gas gathering system for the resumption of
enriched natural gas liquid ("NGL") injection.
-- The Company completed upgrades to its gas gathering system in
the third quarter of 2023 to debottleneck restrictions at certain
well locations and to recover produced gas back to the gas
injection plant for recycle.
-- With the system commissioned, the Company concluded its
permitted gas flaring program since receiving approval in October
2022 .
Current Trading Update:
-- The Company commenced increased enriched NGL injection to the
Shannon miscible flood in mid-October and early responses to oil
production are being monitored closely.
-- October 2023 average gross lease oil production was 1,110 bbls/d
-- November 2023 average gross lease oil production to November 13, 2023 was 1,136 bbls/d
-- The Company plans to provide forward production guidance for 2024 prior to the end of 2023.
-- The Company is focused on delivering its strategic objectives
for the further development of its Wyoming Assets.
Third Quarter 2023 Financial Highlights:
-- Petroleum sales, net of royalties was $5.8 million as
compared to $5.6 million in the second quarter of 2023. The
increase is due mainly to the rise in the realized sales price of
oil of $78.34/bbl as compared to $71.75/bbl in the second quarter
of 2023, partially offset by a reduction in oil production.
-- The Company incurred a net realized hedging loss of $2.2
million on crude oil and butane hedge contracts ($NIL in the first
half of 2023 due to a hedge restructuring executed in December
2022). In October 2023, the Company terminated its commodity swap
contracts and the outstanding obligations in respect of these
contracts were replaced with a loan ("Swap Loan"), with an initial
principal amount of $11.9 million and a maturity of March 2025. The
Company also negotiated a capitalization of interest for both the
senior credit facility and the new Swap Loan from October 2023 to
January 2024.
-- The operating netback was $20.83/bbl before the net realized
loss on hedge contracts as compared to $20.93/bbl in the second
quarter of 2023. The increase in the realized sales price of oil of
$6.59/bbl was offset by an increase in royalties and production
taxes of $1.38/bbl and an increase in operating expenses of
$5.31/bbl in the third quarter of 2023. Operating costs were
impacted by certain one-off costs related to landowner payments,
repairs and maintenance following severe and abnormal weather
conditions in the first half of 2023 and increased workovers at
specific well sites in the Barron Flats Shannon Unit ("BFSU") to
prepare for increased NGL injection.
-- The Company initiated G&A reductions in the quarter as
costs were $1.7 million as compared to $1.9 million in the second
quarter of 2023. Further G&A reductions to remove more than
$2.5 million of annualized costs will be completed prior to the
2023 year-end.
-- A cash position of $2.2 million as of September 30, 2023
compared to $4.0 million as of December 31, 2022.
The Financial Statements and the Management's Discussion and
Analysis as at and for the quarter ending September 30, 2023, can
be viewed under the Company's profile at www.sedarplus.ca or at the
Company's website at www.canoverseas.com . The Company encourages
interested parties to read the Management's Discussion and Analysis
along with the Financial Statements and accompanying notes.
John Cowan, CEO and Director commented:
"The third quarter represents a period of important transition
in all aspects of COPL. In the third quarter, G&A was reduced
as an ongoing process in accordance the Company's previously
announced commitments, with significant and required field
infrastructure upgrades completed. Oil production remained
stabilized, and importantly, the permitted gas flaring program has
ceased."
"Since the third quarter in 2023, COPL was able to use working
capital to increase NGL injection at the BFSU at double the rate
compared to recent periods. This miscible flooded field requires
injection of NGLs to enhance oil production and field recovery
factors as capital restraints in earlier periods restricted the
rates of NGL injection. A technical review of the oil response to
increase NGL injection will be monitored closely this quarter, and
it will form the basis for future production guidance and 2024
plans."
"The negotiations regarding a possible joint venture announced
by the Company in July 2023 are ongoing and the parties are working
to agree all outstanding matters."
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. Tom Richardson, Chairman
Mr. John Cowan, 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
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
Canadian Securities Exchange and under the symbol "COPL" on the
London Stock Exchange.
All $ figures are United States Dollars unless otherwise
noted.
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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