Canadian Overseas Petroleum Ltd Business and Financial Performance Update

RNS Number : 0141E

Canadian Overseas Petroleum Ltd

22 February 2024

 

COPL Provides Business and Financial Performance Update

London, United Kingdom; Calgary, Canada: 22 February, 2024 -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, provides a business and financial performance update.

 

On December 29, 2023, the Company announced (i) that it had entered into a Forbearance Agreement with its Senior Credit Facility Lender, pursuant to which the Senior Credit Facility Lender agreed not to enforce certain rights and remedies that it might otherwise have until February 29, 2024 as a result of the default(s) under the Senior Credit Facility (ii) an equity placing, and (iii) the appointment of a Chief Restructuring Officer, all of which were intended to give the Company time to consider strategic financing or sale alternatives.

 

On January 10, 2024, the Company announced, in response to shareholder queries, that, among other things, the Company had concluded that the value of COPL's assets were unlikely to be sufficient to cover the claims of the secured and unsecured creditors which then stood in excess of US$130 million and that the Company was in a precarious financial situation relating to its liquidity position.  

 

On January 16^th the Company closed a US$2.5m equity placing that was designed to give the Company an opportunity to remain listed whilst it obtained an independent technical review of the assets, including possible near term and medium term cash flows from various different development strategies, approach investment banks with a view to obtaining indications as to the value of COPL's assets and seek further funding. The preliminary results of the third party technical review have not changed the Company's conclusions about the value of the Company's assets.

 

During this period, given its liquidity constraints, the Company has not been acquiring any Propane or Butane for injection. The average daily production has been for 2024 has been approximately 1,000 boe/d.  Based off the most current cash-flow projections, the Company forecasts that its cash reserves will be fully depleted in the first week of March 2024 and that the Company will require additional funding to be able to continue operations beyond such date. The Company has sought, and so far been unable to obtain, such additional funding.

 

The Senior Credit Facility Lender has indicated that it will not extend the forbearance period beyond February 29, 2024.  The Company continues to consider strategic alternatives in light of the foregoing, including some form of formal insolvency protection that may or may not leave value in the Company's common shares.

 

 

 

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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.

 

For further information, please contact:

 

Mr. Tom Richardson, Chairman

Canadian Overseas Petroleum Limited 

Tel: + 1 [phone]

 

Charles Goodwin

Yellow Jersey PR Limited

Tel: [phone]

Email: [e-mail]

 

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 initiation of proceedings under the Companies' Creditors Arrangement Act or similar legislation, 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 Limited 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 the Company (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 by any of its 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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