Canadian Overseas Petroleum well Positioned for 2019, set for Nigerian Drilling

By Shola Akingboye

Canadian Overseas Petroleum Limited (“COPL” or the “Company”) (XOP: CSE) & (COPL: LSE), an international oil and gas exploration and development company focused on sub-Sahara Africa, announces its results for the year ending December 31, 2018 and an update for the first quarter, 2019.

Highlights for the year ended 2018 are as follows:

• Secured a term sheet of up to US$50 million into the Company’s subsidiary ShoreCan from The Mauritius Commercial Bank Limited and Trafigura.
• Completed financing in London that raised gross proceeds of £3.0 million.
• Submitted the work programme for the drilling of no less than three appraisal wells in the NOA #1 area of key Nigeria off shore oil asset, OPL 226.
• COPL and its ShoreCan joint venture partner continue discussions with potential contractors and suppliers regarding the appraisal wells and several other wells.
• A large international offshore service provider approached COPL to bid for the appraisal wells. Discussions are ongoing.
• During the fourth quarter, the NNPC granted conditional approval of a 24-month extension for the Phase-1 PSC subject to certain conditions including the submission of a Performance Bond of US$7 million.
• On track to bring four appraisal wells onto production at a forecast initial production rate of 6-10,000 bpd per well, by the end of 2020.
• Netherland Sewell and Associates, Inc. (“NSAI”) has evaluated COPL’s Contingent Resources and Prospective Resources on OPL 226 and produced a report as of December 31, 2018. The report, dated March 15, 2019 was prepared under Canadian National Instrument NI 51-101. The findings highlight the inherent value in the asset and underpin the Company’s ultimate potential. A summary of the report can be found in the Company’s Annual Information Form (“AIF”) dated March 28, 2019.  The complete report can be viewed under the Company’s name at www.sedar.comor on the Company’s website www.canoverseas.com.

Q1 Update

• The Company’s Nigerian Affiliate has accepted a term sheet from a recognized Nigerian Bank for the provision of a US$7 million Performance Bond which will meet the principal condition of the 24-month extension of Phase 1 of the OPL 226 PSC which runs until October 2020. Security for the Performance Bond will be provided by COPL’s affiliate ShoreCan. The Company expects the Performance Bond to be in place to the satisfaction of the regulatory authorities in the coming weeks, at which point activities on OPL 226 can be commenced in earnest.
• In March the Company’s Nigerian Affiliate signed a non-binding letter of intent with an offshore drilling contractor for a new build high spec jack-up drilling rig. The rig is currently undergoing testing and final inspections before its acceptance by the contractor. Successful completion of these tests is one of the Affiliates’ conditions in moving forward in the contracting process.

Arthur Millholland, President & CEO, commented:

“We are now well placed in the development of our strategically important Nigerian asset as we look to commence drilling of the appraisal wells later this year. This is a key step to enable COPL to become a successful mid-tier oil and gas company. Over the last year we have been focused on securing the required contracts and regulatory approvals for OPL 226, raising the necessary funds for the expanded and accelerated program of the asset, while at the same time sourcing contractors and suppliers to perform the drilling, logistics and supplies needed to enable production. We look to the future with confidence given the imminent commencement of operations and the recent evaluation of our Nigerian asset’s resources.”