Canadian Overseas Petroleum shares (COPL) have seen significant volatility over the past year as a result of mixed, and in some circumstances, disappointing updates.

Canadian Overseas Petroleum and its joint venture Shorecan have projects in Converse County, Wyoming and sub-Saharan Africa.

The company’s Wyoming operations are environmentally friendly due to its low gas flaring and methane emissions along with the production facilities being powered by electricity generated by a neighbouring wind farm.

Canadian Overseas Petroleum

Canadian Overseas have flirted with investors throughout the last year by announcing optimistic updates including encouraging production figures and significant oil discoveries. However, a series of set backs and disappointing results has led to the company today having to clarify a storm of what the company calls ‘disinformation posted on social media and internet chat forums’.

Increased Oil Production

Around late November 2021, COPL announced increased oil production at its operated Barron Flats Shannon Unit rebounding the company’s shares.

The company reported a 35% increase in crude oil production from the Shannon Unit as a result of completing the infrastructure to reduce the surface working pressures on the field’s most efficient producing well.

The completion of infrastructure to reduce the surface working pressures on the fields most capable of producing well has increased oil output. This horizontal well, which was previously produced at a restricted rate of 150 barrels per day, has responded very well to the miscible flood scheme and was responsible for the field’s peak oil production in August.

The company also announced delays in the completion of the Barron Flats Federal (Deep) Unit due to problems with isolating the perforated Frontier Sands from the wellbore, which provoked investor sentiment once again.

Significant Oil Discovery

In Wyoming’s Converse and Natrona Counties, the company made a large oil discovery on its leasehold during the start of 2022 resulting in COPL shares gaining traction again with investors hoping the outlook for 2022 follows the trend.

Canadian Overseas estimated that the overall oil reserve would hold 1.5b to 1.9b barrels, with its lease covering 1.3b to 1.6b barrels.

COPL had already applied for licences for four horizontal wells and the company expected to exploit the discovery.

Each well was projected to produce 1,000 to 3,000 barrels of oil per day at first. One discovery well had already started producing at a rate of 100 to 120 barrels per day.

Meanwhile, output at the company’s Barron Flats Shannon field, also in Wyoming, was producing 2,000 barrels per day, exceeding expectations following a gas injection programme that began in April 2021.

$8m Accelerated Bookbuild

At the end of 2021 Canadian Overseas Petroleum announced the need for an accelerated bookbuild amounting to $8m.

By way of a placing and subscription, COPL planned to perform an accelerated bookbuild to raise net proceeds of roughly $7.5m, which would be used towards making a bid for Cuda Energy.

Tennyson Securities placed a total of 30,250,000 Common Shares with institutional investors for 20p per placing share.

The net proceeds of the offering, along with COPL’s other financial resources, were to be used to fund a bid for Cuda Energy or its assets, as well as general working capital.

Director Purchase

Chief Executive Officer Arthur Millholland purchased COPL shares as he said, “This share purchase shows my confidence in the company’s recently announced deep discovery and the performance of our miscible flood at our Barron Flats project in Wyoming.”

Millholland purchased 665,000 shares at an average price of CAD0.58, worth CAD385,700 which was approximately £225,315. At the time, this was welcomed by investor and shares rose on the news.

2021 Results

COPL announced its year-end and Q4 results in which they said it was “a year of major positive change for COPL.”

The company discussed the impact of the acquisition of Atomic Oil & Gas which led COPL to operate 3 assets in the Powder River Basin in Wyoming.

At the start of the financial year, COPL completed the acquisition of Atomic Oil & Gas which has been transformative for the Company. COPL now operates three assets – Barron Flats Unit, Cole Creek and Barron Flats Federal (Deep) Unit in the Powder River Basin in Wyoming with a working interest of 58%, 67% and 56% respectively.

From the start of the acquisition, COPL stated the assets produced “1,100 barrels of light oil” which grew to 1,900 barrels a day after COPL implemented a ‘works programme’. However, facility constraints restricted production which raised alarms for investors.

Although COPL acquired significant acreage in the Wyoming asset, only a portion of it was in production, again instilling concern in investors.

Regarding the oil discovery made in January 2022, the company has permits and will begin initial delineation later in 2022 through horizontal wells from 16 drilling locations.

Southwestern Production, COPL’s operational affiliate, was obtaining a drilling rig for the delineation drilling programme as well as the planned drilling of 8 additional production wells and 1 injection well at the producing Barron Flats Shannon Field.

Crude Sales

In terms of COPL’s financials, the company noted average net crude oil sales before royalties were 1,094 barrels per day in Q4 2021 which was higher than Q3 producing 1,071 barrels. The fourth quarter averages were limited due to facility constraints.

For the full year of 2021, net crude oil sales before royalties averaged 972 barrels per day.

Petroleum sales, net of royalties, were $5.8m in Q4 2021, offset by a $1.4m realised loss on crude oil hedge contracts, compared to $5.2m in Q3, offset by a $0.6 million realised loss on crude oil hedge contracts.

For FY22, petroleum sales were $15.0 million net of royalties, along with a $2.3 million realised loss on crude oil hedge contracts.

In the fourth quarter, COPL realised a gain of $1.6m on butane hedging contracts, compared to a gain of $1.1m in the third quarter of 2021.

In terms of the full year, COPL realised a gain of $2.8 million on butane hedge contracts concerning the miscible flood injection programme.

In the third quarter of 2021, the operational netback was $43.97 per barrel, which included a $2.76 per barrel net realised gain on crude oil and butane commodities contracts, compared to $26.85 per barrel in the third quarter of 2021, which included a $4.31 per barrel realised loss on crude oil and butane commodities contracts.

The operating netback was $33.10 per barrel, including a net realised gain of $1.92 per barrel on crude oil and butane commodity contracts for FY22.

Facility constraints and decreases in net realised gains seemed enough for investors to start moving their money from COPL.

2022 Outlook

Millholland looks forward “to the future with renewed confidence.” However, are investors patient enough to wait with him to see if they finally deliver?

In 2022, COPL is aiming to refinance the COPL America credit facility to reduce the company’s cost of capital. The company is also planning to optimize and increase oil production at the operated Barron Flats Shannon Unit miscible flood, and commence Phase 1 of the delineation of the Barron Flats Deep Oil discovery.

COPL Valuation

Canadian Overseas Petroleum has a market cap of £40m after shares gained 20% to 25p following the company’s move to clarify market speculation.

Canadian Overseas shares peaked at 42p in August 2021. The company has since lost 37.4%, however, YTD COPL shares have gained 53%.

It is evident from today’s release that Canadian Overseas Petroleum is aware of investor discontent which will need to be met with solid updates in the near future to avoid further downside in the stock.

The FTSE 250 fell 1% to 21,104 on Wednesday alongside a 0.5% drop to 1,051 in the AIM as concerns over Russia sanctions and Fed rates triggered a wave of caution from investors.

Moonpig shares sank 8% to 208p despite the company lifting annual revenue expectations to £300m yesterday as pandemic restrictions lowered across the UK.

Baltic Classifieds Group shares fell 5.6% to 172p as the stock faded back from to yesterday’s gains after the bounce back from losses sustained from the start of Russia’s invasion of Ukraine.

Tui shares lost 3.6% to 233p despite the company recruiting 1,500 new employees to focus on digitalisation and destinations due to the company’s expectations of summer 2022 bookings to return close to pre-pandemic levels.

IP Group announced First Light’s achievement of the first-ever fusion with a projectile approach, which gained approval from the UK Atomic Energy Authority.

After the achievement, IP Group said it will be doubling its stake in its portfolio company First Light Fusion. However, the intellectual property commercialisation company shares fell nearly 3% to 90.77p.

Ascential shares rose 3% to 344p and Premier Foods’ shares gained 6.3% to 124p in early morning trade on Wednesday.

Osirium Technologies shares soared 30% to 16.8p, continuing the stock’s rise from yesterday when the company reported “continued growth in contract values.” In Q1 of 2022, the Osirium secured 5 contracts, each having “larger value than any individual contract” the firm obtained in 2021.

Avacta shares flew 19% to 76p despite the drug developer and diagnostics company reporting an increase of nearly £11m in pretax loss and no dividends for 2021. However, Avacta did note an £800,000 increase in revenue to £2.9m.

Sosandar shares increased 19% to 28.5p after the company announced that its annual results are currently projected to exceed market expectations, with a substantial reduction in losses and revenue reaching £29m, which is more than double its result for 2021.

Premium drinks retailer Distil shares increased 17% to 1.4p following strong Q4 results. The company saw a 32% jump in revenue from 2021 and volumes rose by 38%. The firm also more than doubled its investments in brand marketing and new product development.

Eco Atlantic Oil & Gas shares plummeted 16% to 30p due to a discounted equity fundraise to raise £19.5m to fund the drilling of the Gazania-1 well on Block 2B, offshore South Africa.

Chariot, the Africa-focused transitional energy company, announced that it has signed a Memorandum of Understanding with the Port of Rotterdam International, a global energy hub linked to the green hydrogen project in Mauritania. However, Chariot’s shares suffered a fall of 8% to 20p.

BrandShield Systems’ shares gained 2% to 10.8p after the company announced that it had signed a new business agreement with a major pharmaceutical firm.

Price Target Changes

FTSE 250

Close Brother shares dropped 2% to 1,186p after UBS cut the company’s price target from 1,485p to 1,200p.

Berenberg raised Hochschild Mining’s price target from 130p to 160p, however, the shares still dropped 0.2% to 133p.

Centamin shares are down 0.6% to 91.6p despite Berenberg increasing the price target to 114p from 108p.

Tullow Oil shares fell 1% to 57p following Barclays raising the oil and gas price target to 87p from 85p.

Tritax Eurobox shares lost 0.5% to 105p after Barclays cut Tritax Eurobox’s price target from 145p to 135p.

Harbour Energy shares gained 2% to 478p and Capricorn Energy increased 0.5% to 227p as Barclays increased the price targets by 100p and 40p respectively.

AIM

Berenberg raised Pan African Resources’ price target by 1p to 28p, however, the company’s shares lost 4.5% to 22p.

Jubilee Metals’ shares gained 3% to 15p as Berenberg raised Jubilee Metals’ price target to 22p from 21p.

Griffin Mining shares rose 0.8% to 116p following Berenberg’s move to raise the company’s price target to 175p from 170p.

Greatland Gold shares increased by 0.8% to 13p following the price target increased from 24p to 26p by Berenberg.

The FTSE 100 dropped 1% in afternoon trading on Wednesday after the new tax year brought a wave of caution from investors in light of inflation worries from the US Fed.

Despite the market benefiting from subsiding concerns that the Ukraine conflict could be the start of World War Three, investors remained slightly cautious due to uncertainty around the Fed.

Federal Reserve Governor Lael Brainard warned on Tuesday that the central bank must work quickly to reduce its balance sheet and simultaneously increase interest rates to control inflation before it spikes out of control.

“There remain significant headwinds for equities and the latest trouble spot is what the Federal Reserve might do to curb inflation,” said AJ Bell investment director Russ Mould.

“While investors have been expecting the Fed to do something about inflation for some time, it’s the likely pace of action that really worries the market.”

“Tighten monetary policy too quickly and the economy could fall into recession.”

It was a good day for oil companies as Shell gained 0.7% to 21,375 after the price of Brent Crude went up to $108 per barrel, following its plummet to $104 earlier this week.

Tobacco brands performed strongly, with Imperial Brands rising 3.3% to 16,700p and British American Tobacco shares gaining 1.4% to 32,752p after Imperial Brands announced projected tobacco price rises in the latter half of the year bringing in a boost in revenue despite a weakened slate of tobacco sales in Europe.

“Gains in the US, UK and Australia more than offset declines in Germany and Spain,” a spokesperson for Imperial Brands said.

“These share gains were achieved while maintaining strong pricing discipline, and overall tobacco volumes are in line with expectations.”

Diageo shares increased 1% to 40,195p following the company’s launch of priced fixed-rate sterling and euro-denominated bonds on Tuesday, from which the proceeds will reportedly be used “for general corporate purposes”, according to a statement from the drinks producer.

Smurfit Kappa led the FTSE 100 fallers with a 3.8% decline to 32,035p following the packaging group’s exit from Russia on the back of a fresh wave of sanctions. The company confirmed that its Russian business accounts for approximately 1% of its projected sales.

“This exit will be effected in an orderly manner, during which we will continue to pay our employees and fulfil our legal obligations,” said a spokesperson for the firm.

More bad news added to IAG’s worries as the travel company’s share price lost 2.9% to 135.6p following an announcement that flight groups including British Airways and EasyJet had axed over 100 UK flights from their Wednesday schedule due to surging rates of coronavirus among company staff.

ITV shares suffered a 2.2% drop to 80,180p after the company reported a potential £1 billion bid for Channel 4, which is set to be privatised by 2024. The company is projected to face a bidding war between competing parties including Paramount Global, Sky and Discovery.

Palace Capital shares enjoyed a 2.3% rise to 280.5p per share in early morning trading on Wednesday morning after the investment company released an annual trading update projecting a strong performance exceeding market expectations for 2021.

The firm credited asset management success, lease activity and a slate of acquisitions for its promising results over the past year.

Palace Capital reported £28.1 million in cash on its balance sheet for 2021, alongside its disposal strategy ahead of target with gross proceeds of £31.5 million and an improvement to its portfolio income with steady rent collection and a reliable dividend increase.

The Group announced a 38% reduction in net debt to £73.6 million, and added that its EPRA earnings and adjusted PBT are projected to exceed market expectations.

Palace Capital announced a quarterly dividend of 3.2p per ordinary share, which is scheduled for payment on 14 April 2022.

The company confirmed a final dividend at a minimum of 3.7p to be paid in July 2022.

The property investment group said its goal is to take a higher level of risk in 2022, by using its core assets as a foundation from which to grab investment opportunities in the regional office and industrial sectors which would be riskier, yet provide stronger returns to shareholders.

Palace Capital currently aims to realign its portfolio with a distribution of 50% core assets, 40% value add/asset management and 10% invested in development.

“Following an extremely active period of portfolio management, the Company is well positioned with a higher quality portfolio delivering improved income and the opportunity for reinvestment underpinned by a significantly strengthened balance sheet,” Palace Capital CEO Neil Sinclair.

“It means that as we recover from the pandemic, we are well placed to address the future with confidence.”

The multinational tobacco company, Imperial Brands stated they are trading in line with its five-year strategy launched in 2021 on Wednesday.

The news of increased market share and performance in line with the company’s five-year strategy encouraged investors, and the group shares lifted nearly 3% to 1,660p in early morning trade on Wednesday.

Imperial’s top-five combustible markets, which contribute to over 70% of adjusted operating profit, have seen a growth in aggregate market share as a result of maintaining strict pricing discipline, and overall tobacco volume is on track.

The gains obtained from the United States, the United Kingdom, and Australia more than offset losses in Germany and Spain.

Customers in Greece and the Czech Republic have responded favourably to pilots of the Pulze heated tobacco system, as well as an improved consumer marketing offer for its blu vapour product in the United States.

Imperial made solid progress toward its strategic goal of creating a long-term, consumer-focused Next Generation Product (NGP) business, and it will offer an update on our next steps in the interim results which will be announced on 17 May 2022.

Due to the growth in Europe, first-half NGP sales are likely to be somewhat higher than in the previous period.

Imperial Brands is on target to ensure full-year results following the group’s updated guidance released on March 15, with adjusted operating profit growth of about 1% and full-year net sales increase of roughly 0-1% in constant currency.

On a constant currency basis, first-half group net sales are forecast to be almost flat compared to last year, which is in line with the group’s estimates due to a decline in cigarette sales in Europe, which has offset increases in other markets.

On a constant currency basis, H1 2022 group adjusted operating profit is forecast to increase by roughly 2%, owing to lower NGP losses.

Tobacco performance will be heavily weighted in H2, as projected. On a constant currency basis, H1 2022 tobacco operating profit will be roughly unchanged compared to last year, with additional investment in Imperial’s strategy offsetting the advantage of lower US litigation costs compared to last year.

Translation foreign exchange is estimated to be a 2% headwind on first-half earnings per share and a 1% drag on full-year earnings per share at current exchange rates.

The return to pre-COVID spending patterns as Northern Europeans resume overseas travel, as well as price phasing in some sectors, have boosted Europe’s performance. Price increases later in H1 will aid a greater revenue performance in H2 2022.

On a 12-month basis, Imperial Brand’s adjusted operating cash conversion continues robust, and it is on track to meet half-year and full-year forecasts.

The group’s adjusted net debt to EBITDA ratio will improve year on year, with a 12-month leverage forecast to be 2.4x at the H1 2022, down from 2.6x in 2021, reflecting seasonal cash flow changes. However, Imperial anticipates a year-over-year increase in leverage for the entire year.

Imperial is still in talks with a local third party regarding transferring its Russian assets and operations as a going concern in an organised way.

Meanwhile, the group continues to assist our Ukrainian colleagues and their families with transportation and lodging to allow them to flee the most severely affected areas of the crisis, as well as resettlement assistance for those who have already left Ukraine.

Hilton Food Group shares fell 1.1% to 1,208p in early morning trading on Wednesday following the company’s announcement of an International Financial Reporting Standards (IFRS) pre-tax profit drop of 12.3% to £47.4 million against £54 million in 2020 in its preliminary results for 2021.

The company’s revenue rose 21.6% to £3.3 billion compared to £2.7 billion last year.

However, the Hilton Food Group’s IFRS basic earnings per share fell 7.4% to 45p against its 48.6p result in 2020.

The Hilton Food Group reported a sustained growth across all protein categories for the last two years, with meat and seafood hitting 14.3% volume growth, vegan and vegetarian recorded at 26.4% and added value easier meals coming in at 36% .

The protein company expanded into international markets, with over 75% of its business achieved outside the UK.

“This has been a year of delivery and diversification,” said Hilton Food Group CEO Philip Heffer.

“We have delivered another strong financial performance with volumes and revenue both growing, maintaining a trend of continuous volume growth every year since Hilton’s flotation in 2007.”

Hilton Food Group further acquired European vegetarian producer Dalco and entered the North American market with its acquisition of smoked salmon producer Foppen with a £75 million equity raise.

The Group also expanded into UK out-of-home meat food services with its acquisition of Fairfax Meadow.

“We have also made strategic progress in diversifying the business. Last year, we set ourselves the goal of becoming the protein partner of choice,” said Heffer.

“Put simply, we want to offer all the proteins people want to put on their plates, in home and out of home, not just in Europe and Asia, but in North America too.”

“To reach that goal, we have been transforming our business to expand into new protein products and categories, to enter new international markets, to deepen our technology and engineering capabilities, and to expand our sustainability commitments across all protein categories.”

The firm announced a proposed final dividend of 21.5p, amounting to a total dividend of 29.7p, which was an increase over its 26p offering in 2020.

Diageo issued two series of fixed-rate euro-denominated bonds and two series of fixed-rate sterling-denominated bonds on Tuesday.

Under its European Debt Issuance Program, Diageo, a global leader in beverage alcohol, launched and priced €1,650m in fixed-rate euro-denominated bonds and £900m in fixed-rate sterling-denominated bonds on Tuesday.

The euro-denominated bonds will be issued by Diageo Capital B.V., while the sterling-denominated bonds will be issued by Diageo Finance, with Diageo fully guaranteeing the payment of principal and interest in both cases.

The drawdowns will include the issuance of €750m bonds with a coupon of 1.500% per annum due June 2029, €900m bonds with a coupon of 1.875% per annum due June 2034, £300m bonds with a coupon of 2.375% per annum due June 2028, and £600m bonds with a coupon of 2.750% per annum due June 2038.

Each issuance’s proceeds will be utilised for general corporate objectives.

Barclays Bank PLC, BofA Securities Europe SA, Deutsche Bank Aktiengesellschaft, Goldman Sachs Bank Europe SE have been appointed as joint active book-runners for the euro-denominated bonds, while Credit Suisse Bank (Europe) S.A., RBC Europe Limited, and Standard Chartered Bank have been appointed as joint passive book-runners for the euro-denominated bonds.

Barclays Bank PLC, Deutsche Bank AG, London Branch, Goldman Sachs Bank Europe SE, Merrill Lynch International have been named joint active book-runners for the sterling-denominated bonds, while Credit Suisse International, RBC Europe Limited, and Standard Chartered Bank have been named joint passive book-runners.

Diageo shares gained 1.2% to 4,025p after the company announced the launch of its fixed-rate euro and sterling bonds in early morning trade on Wednesday.