Canadian Overseas Petroleum (LSE:COPL) has been readmitted for trading on the London market as of last week. The oil play also provided investors with an operations update.
Canadian Overseas Petroleum, is an oil and gas explorer with specific emphasis on fields in the US (Wyoming) and sub-Saharan Africa (Nigeria).
The increase in crude oil production is being attributed to an enhanced gas injection program which the company introduced in April.
“Oil production will continue to increase as the surface well site production facilities are enhanced to handle the increased oil production rates and associated higher working pressures,” explained Millholland. “In addition, we have initiated operations to exploit the substantial upside identified by our team. We are confident that the assets acquired through the acquisition will continue to add significant value going forward and have increased our production forecasts accordingly.”
The gas injection processes have had an impact at Canadian Overseas Petroleum’s fields in Wyoming. The company is sounding bullish about future oil production – e.g. on the west side of its Barron Flats field. Enhanced surface production facilities have been installed on newly flowing wells in the eastern area of this field to handle increased oil production volumes and higher flowing pressure.
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Last time we covered Canadian Overseas Petroleum, we felt that the acquisition of Atomic Oil & Gas looked like it had the makings of a good deal. It brought COPL 31m barrels of proved and provable oil reserves at a time when the oil price still looked relatively weak. There has been a lot of progress with the oil price since this deal was inked back in December.
Material enhancement to overall value
We felt that the deal would represent a material enhancement to the overall value of COPL, with an expectation of immediate production increases and revenues. It brings COPL new infrastructure, direct access to a pipeline, and no legacy abandonment or reclamation liabilities.
Barron Flats in Wyoming is also considered environmentally responsible, with no gas glaring and minimal methane emissions. Electricity is being sourced from a nearby wind farm.
Resolution of Nigeria dispute
Investors should note that the firm also resolved disputes with its Nigerian affiliate and was awaiting for confirmation from Nigeria’s National Petroleum Corp for an extension of its exploration permits beyond September. The application is thought to be delayed due to travel restrictions imposed by COVID in West Africa. However, some investors are known to be concerned about the delay in getting this extension in the bag.
COPL shares are trending downwards at the moment. At this stage it does not look like too much to be worried about, but there were heavy net sales volumes on the stock when it came back on the market, and it has struggled to keep above 0.45p. At time of writing shares were down to 0.35.