COPL Provides Business & Financial Performance Update

Source: www.gulfoilandgas.com 2/22/2024, Location: North America

Canadian Overseas Petroleum Limited ("COPL" or the "Company") (XOP: CSE) & (COPL: LSE), an international oil and gas exploration, production and development company with production and development operations focused in Converse and Natrona Counties, Wyoming, USA, provides a business and financial performance update.

On December 29, 2023, the Company announced (i) that it had entered into a Forbearance Agreement with its Senior Credit Facility Lender, pursuant to which the Senior Credit Facility Lender agreed not to enforce certain rights and remedies that it might otherwise have until February 29, 2024 as a result of the default(s) under the Senior Credit Facility (ii) an equity placing, and (iii) the appointment of a Chief Restructuring Officer, all of which were intended to give the Company time to consider strategic financing or sale alternatives.

On January 10, 2024, the Company announced, in response to shareholder queries, that, among other things, the Company had concluded that the value of COPL's assets were unlikely to be sufficient to cover the claims of the secured and unsecured creditors which then stood in excess of US$130 million and that the Company was in a precarious financial situation relating to its liquidity position.

On January 16th the Company closed a US$2.5m equity placing that was designed to give the Company an opportunity to remain listed whilst it obtained an independent technical review of the assets, including possible near term and medium term cash flows from various different development strategies, approach investment banks with a view to obtaining indications as to the value of COPL's assets and seek further funding. The preliminary results of the third party technical review have not changed the Company's conclusions about the value of the Company's assets.

During this period, given its liquidity constraints, the Company has not been acquiring any Propane or Butane for injection. The average daily production has been for 2024 has been approximately 1,000 boe/d. Based off the most current cash-flow projections, the Company forecasts that its cash reserves will be fully depleted in the first week of March 2024 and that the Company will require additional funding to be able to continue operations beyond such date. The Company has sought, and so far been unable to obtain, such additional funding.

The Senior Credit Facility Lender has indicated that it will not extend the forbearance period beyond February 29, 2024. The Company continues to consider strategic alternatives in light of the foregoing, including some form of formal insolvency protection that may or may not leave value in the Company's common shares.


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