Calgary, Canada, June 4, 2020 – Canadian Overseas Petroleum Limited (“COPL” or the “Company”) (XOP: CSE) & (COPL: LSE), an international oil and gas exploration and development company focused on offshore Africa is pleased to announce that its 50% owned joint venture company, Shoreline Canadian Overseas Petroleum Development Corporation (“ShoreCan”) has reached an agreement in principle with Essar Exploration & Production Limited (Mauritius) (“Essar Mauritius”)
On a way forward to resolve their disputes with each other concerning, among other things, their respective obligations under the Essar Exploration and Production Limited (Nigeria) (“Essar Nigeria”) Shareholders Agreement (the “Shareholders Agreement”).
The agreement in principle between ShoreCan and Essar Mauritius can be summarized as follows:
· An immediate stay in proceedings of the of the claim filed by Essar Mauritius against ShoreCan in the High Court of Justice of England and Wales
· Essar Nigeria, with the full support of its shareholders, will seek an extension of the PSC beyond the current term ending September 30, 2020
· Proposed amendments to the Shareholders Agreement to include:
o ShoreCan to transfer 70% of the shares in Essar Nigeria to Essar Mauritius;
o Essar Mauritius to carry Shorecan for a 10% carried interest (capped at US$5 million net) on all costs relating to the drilling of the first Appraisal Well to be drilled under the terms of the OPL 226 PSC
o ShoreCan will have option to increase its shareholding in Essar Nigeria from 10% to 30% by paying 20% of historic expenditures of Essar Nigeria at cost through the drilling of the first appraisal well
· The settlement is conditional on the parties finalizing definitive documentation and completing the transactions, (including securing extension of the PSC) within 35 days.
Arthur Millholland, President and CEO, commented:
“This is a great outcome for the Company in these uncertain times. We look forward to the future working relationship with Essar to unlock the potential of OPL 226.”
The Common Shares are listed under the symbol “XOP” on the CSE and under the symbol “COPL” on the London Stock Exchange.
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