Canadian Overseas Petroleum Significantly Increases Reserves and Values

Source: www.gulfoilandgas.com 9/12/2022, Location: North America

Canadian Overseas Petroleum Limited (“COPL”) (CSE) & (LSE), an international oil and gas exploration, production and development company with operations focused in Wyoming, USA, is pleased to announce a material increase to its Proved (“1P Reserves”) and Proved plus Probable Oil and Gas Reserves (“2P Reserves”) and 1P and 2P Discounted Net Revenue Before Tax (“NPV”) resulting from the acquisition of the assets of Cuda Energy LLC (“Cuda”).

The Company has received a Reserve Report (the “Report”) prepared by Ryder Scott Company LP dated September 2, 2022 and effective as at July 31, 2022 to reflect the addition of the assets of Cuda acquired on July 26, 2022. The Report is compliant to Canadian regulatory requirements pursuant to National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”).

Material increases to COPL’s 2P Reserves and NPV from those as at December 31, 2022 were due to the addition of the complimentary Cuda assets and the increase in crude oil prices as at July 31, 2022, which were as follows:
- Net Working Interest (“WI”) 1P Reserves after royalties increased 47.2%;
- Net WI 2P Reserves after royalties increased 38.5%;
- Discounted 1P NPV increased 93.2%;
- Discounted 2P NPV increased 90.8%;
- Net 1P Reserves Unit Value increased 31.2%, and
- Net 2P Reserves Unit Value increased 37.8%.

Net WI Total (1P) Proved Reserves (boe)
As at December 31, 2021: 11,730,222
As at July: 31, 202217,272,220
Net WI Total (2P) Proved plus Probable Reserves (boe)
As at December 31, 202122,636,519
As at July 31, 2022: 31,348,608
Total 1P NPV at 10% (US$M)
As at December 31, 2021: $131,893
As at July 31, 2022: $254,833
Total 2P NPV at 10% (US$M)
As at December 31, 2021:$257,860
As at July 31, 2022: $492,073
Net 1P Reserves Unit Value at 10% (US$/boe)
As at December 31, 2021: $11.24
As at July 31, 2022: $14.75
Net 2P Reserves Unit Value at 10% (US$/boe)
As at December 31, 2021: $11.39
As at July 31, 2022: $15.70

1. “Gross Reserves” are the Corporation’s working interest (operating or non-operating) share before deduction of royalties and without including any royalty interests of the Corporation.
2. “Net Reserves” are the Corporation’s working interest (operating or non-operating) share after deduction of royalty obligations, plus the Corporation’s royalty interests in reserves.
3. “Proved” reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. There is a 90% probability that the actual remaining quantities recovered will exceed the estimated proved reserves.
4. “Probable” reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

Arthur Millholland, President & CEO, commented:
"The updated reserves of the Company and the significant increase in COPL’s 2P NPV 10% to $492 million illustrate the benefit of the timing of our acquisition of the Cuda assets in a high oil price environment. We purchased these assets for $19.15 million with the incremental reserves acquired at a cost of $2.20 per barrel. This is a remarkable metric to the comparative valuation of the 2P Reserves of $15.70 per barrel as at July 31, 2022. We will continue to release updates to the market as we work through our plan as presented earlier this year.”


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