Canadian Overseas Petroleum’s death spiral continued on Thursday after the stricken oil and gas explorer issued shares to satisfy the conversion of bond payments.
COPL shares fell 8% on the news and are down 99% over the past year.
Canadian Overseas Petroleum issued 305,598,679 common shares. This issuance is a result of the share settlement option being exercised by a Bondholder for the settlement of $1.1 million in Conversion Payment amounts, along with related accrued interest, as per the terms of previously converted 2027 Bonds and 2028 Bonds.
The issue represents around 22% of the shares outstanding following the issuance.
Today’s news follows the cataclysmic deterioration of COPL’s finances. Investors had been hoping for a joint venture agreement to develop US assets, but COPL’s dire situation hit home after discussions were terminated.
The company recently announced its US affiliate has defaulted on its obligations and entered a Forbearance Agreement with senior creditors. COPL agreed to highly dilutive terms and ravaged shareholder value.
The CEO resigned shortly after Christmas.
The company has backed itself into a corner, and shareholders will likely be left with very little.
