- The acquisition of the US assets of Cuda Energy by an affiliate of Canadian Overseas Petroleum Limited (XOP), COPL America, will close today
- Once the acquisition is completed, COPL America will become the majority owner of its Wyoming assets with increased operated interests of 85-100 per cent
- It increases COPL’s 2P reserves by 47 per cent from 25.8 million to 38.2 million barrels
- The cash consideration for the acquisition is US$19.15 million
- COPL is an international oil and gas exploration, development and production company
- Canadian Overseas Petroleum Limited opened trading at C$0.265
Canadian Overseas Petroleum Limited (XOP) has acquired the United States assets of Cuda Energy by its affiliate, COPL America.
Once the acquisition is complete, COPL America will become the majority owner of its Wyoming assets with increased operated interests of 85-100 per cent across three oil-producing units.
From the third quarter of 2022, this will add unhedged production and exposure to the current high oil price environment and significantly increase COPL America’s operating cash flow.
It increases COPL’s 2P reserves by 47 per cent from 25.8 million to 38.2 million barrels.
The acquisition provides significant leverage to COPL, increasing the company’s NPV10 (47 per cent working interest adjusted) by US$122 million from US$258 million (COPL December 31, 2021 NI-51-101 Reserves) to US$380 million.
Cuda assets will now be consolidated into COPL America’s asset-backed borrowing base for its current senior loan and for the company to secure a Reserves Based Lending (RBL) facility with a commercial bank.
The cash consideration for the acquisition is US$19.15 million, in addition assumed liabilities at closing which are estimated to be approximately US$1.6 million consisting primarily of Cuda’s outstanding Joint Interest Billing obligations.
The Cuda acquisition has a highly attractive valuation of c. 81 per cent of the working interest adjusted Atomic Oil and Gas LLC acquisition announced last year
“In my near forty years within the oil industry I have seldom come across assets with such prolific oil and gas potential,” said Arthur Millholland, President & CEO.
“We now have full ownership which we have secured when the assets are at an early stage in development with everything to play for, and with the financing arrangements we also now have in place we look to the future with confidence,” he added.
COPL is an international oil and gas exploration, development and production company actively pursuing opportunities in the United States with operations in Converse County, Wyoming, and in sub-Saharan Africa through its ShoreCan joint venture company in Nigeria and independently in other countries.
Canadian Overseas Petroleum Limited opened trading at C$0.265
