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Canadian Overseas Petroleum Limited

Canadian Overseas Petroleum keen to start drilling at OPL 226

Snapshot

COPL is keen to start appraisal drilling at OPL 226 subject to finance.

Rig ship

Quick facts: Canadian Overseas Petroleum Limited

Price: 0.0625 GBX

Market: LSE
Market Cap: £2.18 m
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  • Canadian Overseas Petroleum (LON:COPL) owns stake in offshore Nigeria field OPL 226

  • Wants to drill a four-well programme that will cost US$120mln

  • Talks underway with potential partners

  • Third-quarter statement highlighted need for finance to  tide it over until the major deal is signed

What it owns

COPL’s 50% owned affiliate ShoreCan owns 80% of the share capital of Essar Nigeria.

Essar Nigeria’s sole asset is a 100% interest and operatorship of OPL 226 that is located about 50 kilometres offshore in the central area of the Niger Delta.

OPL 226 has an area of 1530 sq km and is situated in water depths ranging from 40m to 80m. 

Historically, five wells have been drilled, with the first oil discovery on the Block made in 2001 in the fifth well (Noa-1) after earlier drilling encountered predominantly gas-bearing sands. 

ShoreCan has completed additional seismic processing to the most recent 568 km2 3D seismic survey acquired by Essar Nigeria in 2012. 

How It's doing

Third-quarter numbers showed a quarterly loss of US$1mln with cash equivalents of US$484,000 at the end of September.

In May, the company said it had conditionally agreed a package worth up US$50mln that would help it exploit the oil potential of the OPL 226 offshore Nigeria.

COPL and its local partner want to bring three to four wells into production by the end of next year at rates of 6-10,000 barrels of crude per day.

“Together with our joint venture partner we continue to be focused on concluding the placement of the OPL 226 performance bond by our Nigerian affiliate and progressing the operational plan for the commencement of operations.

"As previously indicated, once the Performance Bond is in place, we can commence operations in earnest," said CEO Millholland in an update on its progress towards its near-term goal.

Elsewhere, COPL is looking to agree terms for a production sharing contract governing onshore Block PT5-B on the Mozambique coastal plain.

What the boss says: Arthur Millholland, chief executive 

“The attractiveness of working offshore Nigeria is that its home to some of the best reservoirs in the world, so the economics are very good."

Inflexion points

  • Short-term finance arranged
  • Receipt of performance bond from Nigerian bank
  • Appraisal work starts at OPL 226
  • Finance partner is found and terms agreed

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Watch

Canadian Overseas Petroleum now poised for production in the Niger Delta

Arthur Millholland, chief executive of Canadian Overseas Petroleum Limited (LON:COPL) tells Proactive London how his team's sheer hard work and patience over the last two years in Nigeria has now brought his company to a point where substantial progress is imminent. Millholland, whose...

on 2/4/19

2 min read