The £28m capitalised Canadian Overseas Petroleum Limited (LON:COPL) group has announced its Second Quarter 2023 Operational and Financial Highlights to end June.
COPL is an international oil and gas exploration, development, and production company actively pursuing opportunities in the United States with operations in Wyoming.
The company operates two production Units: Cole Creek 100% Working Interest, Barron Flats Shannon (Miscible) 85% WI and in addition to 85%-100% WI non-unitised lands between the production Unit boundaries.
The company’s Wyoming operations are one of the most environmentally responsible with minimal gas flaring and methane emissions combined with electricity sourced from a neighbouring wind farm to power production facilities.
The Q2 Update
The Q2 2023 Highlights stated that the upgrading of its gas gathering system, which was the subject of debottleneck restrictions at certain well locations, is now functioning and was commissioned on time and under budget in July 2023.
Q2 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 $5.6m as compared to $5.2m in the first quarter of 2023. The increase is due mainly to the increase in oil production partially offset by a reduction in the realised sales price of oil of $71.75/bbl as compared to $74.94/bbl in the first quarter of 2023.
There was a realised hedging gain of $0.1m on butane hedge contracts as compared to $0.5m in the first quarter of 2023.
The Q2 operating netback was $20.93/bbl, before the net realised gain on butane hedge contracts as compared to $17.19/bbl, in the first quarter of 2023. The Q2 figure was boosted by a reduction in operating expenses of $6.98/bbl.
Additionally, the group started several general and administrative cost reductions in Q2, worth $1.9m as compared to $2.3m in Q1. Further cost reductions are expected to be made in the balance of the current year.
Overall, these various improvements have resulted in a growing cash position, some $5.2m at end June compared to the end December 2022 $4.0m.
But still no more news of the special JV
In late July the company announced that it was preparing the basis of a Joint Venture with an established energy company to develop and exploit its oil reserves and resources at its Cole Creek project in Converse and Natrona Counties Wyoming, but which it does not include the company’s Barron Flats Shannon miscible flood EOR project.
As yet we have no further indication of the unnamed JV suitor.
In the late July announcement about the possible JV the group’s President and CEO Arthur Millholland stated that:
“We have been working on this project for some time. We first identified the potential at Cole Creek before completion of our Atomic acquisition in March 2021. Our acquisition of the complimentary assets of Cuda in July 2022 gave our company full control of the Cole Creek project.
This Letter Of Intent is the first step completed in a process initiated in October of last year after the Cuda acquisition.
The company that has entered into the LOI with us is the best partner we could have of the ones we have considered. We look forward to updating our stakeholders when able as the process proceeds.”
The group’s shares opened 3% better at 4.20p after this morning’s news.