Canadian Overseas Petroleum Limited (LSE:COPL, CSE:XOP) (COPL) has disclosed that it concluded the first quarter of 2023 with a robust cash position of $10.7 million, a significant increase from the $4.0 million declared at the end of 2022.
Announcing its financial results for the quarter ending March 31, 2023, the global oil and gas exploration, production, and development corporation, with operations based in Wyoming, reported a decline in crude oil sales and petroleum revenue during this timeframe. Average crude oil sales, before royalties, decreased to 974 barrels per day (bbls/d), a drop from the 1,177 bbls/d recorded in the previous quarter.
COPL attributed this decline primarily to operational disruptions triggered by harsh winter weather, leading to field closures and limited access for crude oil offloading. Net petroleum sales, after deducting royalties, totaled $5.2 million, a decrease from the $6.7 million reported in Q4 of 2022. This reduction was attributed to both diminished oil production and a drop in the realized sales price.
Nevertheless, the company posted a net realized hedging gain of $0.5 million on butane swap contracts, contrasting the net loss of $2.2 million on crude oil and butane swap contracts in the previous quarter.
In a successful move, COPL managed to eliminate its crude oil hedge swap contracts for Q1 and Q2 of 2023 through a costless hedge restructuring. The company also reported a gain of $0.5 million on butane hedge contracts. These protective measures were established for the necessary liquid purchases related to the miscible flood injection program.
Despite facing obstacles, COPL remains committed to augmenting oil production, decreasing costs, and strengthening its financial health. The company is proactively addressing infrastructure limitations to boost oil production and gas recovery.
In the quarter, the company raised $11.8 million in net proceeds from the sale of convertible bonds, funds which it plans to utilize for supporting its U.S. operations and ensuring financial agility during the gas gathering system upgrades.
COPL managed its capital resources and liquidity by reducing its capital expenditures to $1.6 million in the first quarter, a decrease from the $2.3 million spent in the previous quarter.
COPL’s Wyoming operations underscore environmental accountability, minimizing gas flaring and methane emissions. Moreover, the company harnesses electricity from a neighbouring wind farm to operate its production facilities.
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