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Canadian Overseas Petroleum Ltd Announces Q1 2022 Financial Results and Operations Update

CALGARY, AB / ACCESSWIRE / May 17, 2022 / Canadian Overseas Petroleum Limited and its affiliates ("COPL" or the "Company") (CSE:XOP) & (LSE:COPL), an international oil and gas exploration, production and development company with production and …

CALGARY, AB / ACCESSWIRE / May 17, 2022 / Canadian Overseas Petroleum Limited and its affiliates ("COPL" or the "Company") (CSE:XOP) & (LSE:COPL), an international oil and gas exploration, production and development company with production and development operations focused in Converse and Natrona Counties, Wyoming, USA, is pleased to announce financial results for the first quarter ending March 31, 2022.

First Quarter 2022 Financial Highlights:

COPL's net crude oil sales before royalties remained consistent at an average of 1,114 bbl./d as compared to 1,094 bbl./d in the fourth quarter of 2021 ("Q421"). Due to Cuda Energy LLC's ("Cuda") operating arrears liability, as a joint interest partner in the Wyoming assets, the Company has held Cuda's average production of approximately 477 bbl./d in the first quarter of 2022 ("Q122") and 506 bbl./d in Q421 to offset the ongoing arrears. Thus, in aggregate, the Company's total net average oil production in Q122 was 1,591 bbl./d as compared to 1,600 bbl./d in Q421.

Petroleum sales, net of royalties increased to $7.1 million from $5.8 million in Q421. Cuda's petroleum sales, net of royalties was $2.7 million in Q122 and $2.3 million in Q421 for an aggregate amount to the Company's account of $9.8 million for Q122 an increase from $8.1 million in Q421.

The Company's realized hedging loss was $0.9 million as compared to a realized hedging gain of $0.2 million in Q421. This is comprised of a realized loss of $3.5 million on crude oil hedge (swap) sales contracts, as compared to a loss of $1.4 million in Q421; offset by a realized gain of $2.6 million on butane hedge (swap) purchase contracts, as compared to a gain of $1.6 million in Q421.

COPL's operating netback was $48.53/bbl., before the net realized gain or loss on crude oil and butane hedge contracts as compared to $41.21/bbl. in Q421.

In an effort to manage its capital resources and liquidity, the Company reduced capital expenditures to $3.0 million as compared to $10.7 million in Q421.

On March 31, 2022, the COPL received a waiver from its lender with respect to covenant defaults as at December 31, 2021, subject to certain conditions and fees. Due to the waiver, the Company is no longer in technical default on the credit facility and the as a result COPL's indebtedness has been re-classified as a non-current liability as at March 31, 2022.

Operations Update

In Q122 the Company completed a rigorous reservoir simulation for the Barron Flats Shannon Unit, which commenced in October 2021. This current simulation closely mirrors the working surface pressures and restricted well production observed in the field since late August 2021. As well, this simulation suggests the placement of an efficient miscible bank has been successfully positioned in the reservoir from the increased enriched gas injection program implemented in April 2021. As a result, the Company has currently eliminated the butane component of the enriched gas injection scheme and is now injecting pure methane at overall reduced volumes into the reservoir. In the fourth quarter of 2022, butane enriched gas will be injected into certain injection wells as the Company expands the miscible flood with additional production and injection wells. Other injection wells will continue to receive a pure methane injection stream. The reduction of butane from the injection stream will have a significant operating cash benefit going forward, as it eliminates then reduces a significant cost component of the miscible injection program.

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Canadian Overseas Petroleum Ltd Announces Q1 2022 Financial Results and Operations Update CALGARY, AB / ACCESSWIRE / May 17, 2022 / Canadian Overseas Petroleum Limited and its affiliates ("COPL" or the "Company") (CSE:XOP) & (LSE:COPL), an international oil and gas exploration, production and development company with production and …

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