Canadian Overseas Petroleum has entered into a letter of intent (LOI) with an established energy company to negotiate a joint venture agreement to develop and begin oil production from COPL’s Cole Creek project in Wyoming.
The LOI grants the company exclusivity for a period of time to negotiate the terms and structure of the joint venture, which will require consent from COPL.
Canadian Overseas Petroleum shares were over 14% higher at the time of writing on Monday.
The companies had previously signed a confidentiality agreement in October 2022 related to the potential joint venture, with confidentiality provisions that will terminate concurrently with the exclusivity period. The joint venture will focus on the Cole Creek project and does not include COPL’s Barron Flats Shannon miscible flood EOR project.
Arthur Millholland, President and CEO commented:
“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 LOI 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. Our Company brings considerable experience and understanding of Cole Creek, including operating the early stage enriched gas miscible EOR project at the neighboring Barron Flats Shannon Unit. This EOR experience can be directly applied to Cole Creek as they have many similar reservoir characteristics. We look forward to updating our stakeholders when able as the process proceeds.”