Canadian Overseas Petroleum Limited and its affiliates (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, announces the publication of its Financial Statements and Management Discussion and Analysis for the three and six months ended June 30, 2023.
Second Quarter 2023 Operational and Financial Highlights:
· The Company commenced upgrading its gas gathering system in the second quarter to debottleneck restrictions at certain well locations, to recover produced gas back to the gas plant and to reduce gas flaring. COPL is pleased to announce that the gas gathering system is functioning and was commissioned on time and under budget in July 2023.
· The Company interest crude oil sales before royalties averaged 1,103 bbls/d as compared to 974 bbls/d in the first quarter of 2023.
· Petroleum sales, net of royalties were $5.6 million as compared to $5.2 million in the first quarter of 2023. The increase is due mainly to the increase in oil production partially offset by a reduction in the realized sales price of oil of $71.75/bbl as compared to $74.94/bbl in the first quarter of 2023.
· The Company incurred a realized hedging gain of $0.1 million on butane hedge contracts as compared to $0.5 million in the first quarter of 2023. The Company had no crude oil hedge swap contracts in place in the first half of 2023 due to a hedge restructuring in December 2022. The butane hedges were put in place to protect the liquid purchases required for the miscible flood injection program.
· The operating netback was $20.93/bbl, before the net realized gain on butane hedge contracts as compared to $17.19/bbl, in the first quarter of 2023. The increase is due mainly to the reduction in operating expenses of $6.98/bbl in the second quarter of 2023, partially offset by the decrease in the realized sales price of oil in the current quarter.
· The Company initiated several G&A reductions in the quarter as costs were $1.9 million as compared to $2.3 million in the first quarter of 2023. The Company intends to implement further cost savings in the third and fourth quarters of 2023.
· A cash position of $5.2 million as at June 30, 2023 as compared to $4.0 million as at December 31, 2022.
The Financial Statements and the Management’s Discussion and Analysis as at and for the quarter ending June 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.
Convertible Bonds and Issued Share Capital:
The Company will issue 2,447,980 common shares (“Shares”) on 17 August 2023 pursuant to the conversion of one 2028 Bond ($0.2 million principal). Following this bond conversion, the Company’s outstanding Bonds include:
2027 Bonds principal outstanding: $12.4 million (62 bonds)
2027 Bondholders: 4
2028 Bonds principal outstanding: $13.0 million (65 bonds)
2027 Bondholders: 3
Following this issuance of Shares, the Company has a total of 698,988,888 common shares issued and outstanding. There are no common shares held in treasury and therefore the total number of voting rights in the Company is 698,988,888. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules.
Applications will be made for the Shares to be admitted to the FCA’s Official List and to trading on the London Stock Exchange’s main market for listed securities within the next twelve months, in accordance with Listing Rule 14.3.4.
